Survey: Nigeria’s Diversification Efforts Likely to Take Time
Confidence levels remain high among majority of executives interviewed in the 2018 edition of the “Business Barometer: Nigeria CEO Survey,” carried out by Oxford Business Group (OBG). According to the survey, accessing credit continues to present problems for many entrepreneurs and risks hampering the country’s efforts to diversify its economy away from a reliance on oil.
As part of its survey on the economy, the global research and consultancy firm stated that it asked 124 executives from across Nigeria’s industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment.
“When asked, 85 per cent of respondents said they had positive or very positive expectations of local business conditions for the coming 12 months, up marginally from 84 per cent in OBG’s first survey on Nigeria, which was carried out in 2017,” it stated. However, the survey showed that 90 per cent of business leaders interviewed – the same proportion as in 2017’s survey –described the ease of access to credit in the country as difficult or very difficult, indicating that borrowing remains a major hurdle for many, especially small and medium-sized enterprises, which account for around 60 per cent of the economy.
Executives were more divided about what they felt to be the biggest challenge to doing business in Nigeria, with equal numbers (31 per cent) citing access to capital and corruption as the main obstacles to smooth-running entrepreneurial activity.
The OBG’s survey also highlighted the dominant role that oil continues to play in the economy, despite Nigeria’s diversification plans.
It pointed out that more than four-fifths (82 per cent) of interviewees said they regarded a rise in oil prices as the top external event that could impact the national economy in the short to medium term, perhaps indicating that the recession of 2016, caused by the oil price shock, remains fresh in the minds of many.
However, most business leaders were upbeat about Nigeria’s immediate growth prospects. Some 69 per cent of respondents said they expected the economy to expand by between one and three per cent over the next 12 months, broadly in line with OBG’s forecasts and those of the IMF, which has predicted growth of two per cent.