Nigeria: Business confidence moderates in August
September 1, 2016
In August, the Standard Chartered-MNI Business Sentiment indicator (BSI) fell from July’s 57.5 to 55.1. Despite August’s decline, the index rests comfortably above the 50-threshold that separates contraction from expansion in business conditions.
August’s deterioration reflected a decline in 8 of the 15 current conditions indicators, including production, new orders, employment and backlogs of work. Business sentiment suffered as the Nigerian economy slipped into recession into Q2, dragged down by falling oil production caused by militant attacks on oil facilities. Concerning economic prospects in Q3, Standard Chartered analysts noted that, “hopes have risen for a more robust recovery in H2-2016 following liberalisation aimed at improving FX supply in June and better implementation of the federal government budget after May. Other tiers of government should also benefit from the boost to fiscal revenue from a weaker Nigerian naira (NGN). However, our BSI strikes a note of caution.”