High interest rate burden tops Nigerian business concerns in June 2025, overtaking insecurity and poor power supply, says new Central Bank of Nigeria report

The high interest rate burden has become the most pressing issue for businesses across Nigeria, surpassing even insecurity and electricity supply.

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This is according to the June 2025 Business Expectations Survey published by the Central Bank of Nigeria (CBN), which polled 1,900 firms across agriculture, services, and industry.

“Respondents identified high interest rate (75.6), insecurity (75.2), and insufficient power supply (74.3) as the top three business constraints in June 2025,” the CBN stated.

The figures indicate mounting financial strain, especially for small and medium enterprises.

The surge in borrowing costs is largely attributed to the CBN’s continued tight monetary policy, which keeps the Monetary Policy Rate at 27.5 per cent.

Despite inflation slowing for the third consecutive month to 22.22 per cent, firms still face steep credit costs and reduced liquidity.

Structural problems like insecurity and poor electricity persist, but the high interest rate burden is compounding the pressure on businesses.

Experts argue that the prolonged hawkish stance of the central bank, though intended to tame inflation, is strangling economic productivity.

“The interest rate at 27.5 per cent remains a depressing burden on businesses,” said Dr Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry. Many firms echo this sentiment, citing limited access to affordable credit.

According to former Zenith Bank economist Marcel Okeke, “The tight monetary policy of the Central Bank of Nigeria is injurious… Many small businesses have been crowded out of the financial system.”

Confidence varies across regions. The North-East showed the highest optimism with a confidence index of 37.1, while the South-East recorded only 4.4, indicating regional disparities in how the high interest rate burden is affecting business outlook.

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Despite the constraints, many firms are cautiously hopeful. The Business Confidence Index is expected to rise to 41.3 over the next six months, driven by potential improvements in operating conditions and a stable naira.