Nigeria: Business confidence jumps to a five-month high in July
July 29, 2016
In July, the Standard Chartered-MNI Business Sentiment indicator (BSI) rose from June’s 53.7 to 57.5. As a result, the index is sitting at its highest level since February and resting comfortably above the 50-threshold that separates contraction from expansion in business conditions.
The print reflected that 3 of the 5 components of the index (employment, new orders and production) increased in July. Moreover, 12 of the 15 current conditions indicators improved in the same month. Therefore, businesses seem to be more optimistic in Q3 than in the first half of the year. The positive impact of the Central Bank’s move to allow greater FX flexibility will take time to materialize as business are concerned about the extent of the NGN depreciation. Standard Chartered analysts point out that, “the ‘effect of the NGN exchange rate indicator’, although still weak at just 16.9, improved 42.0% in July to be its highest since February.” Moreover, firms anticipate that inflation will accelerate in the coming months.