Borrowing rates in Nigeria are expected to ease gradually over the next six months, buoyed by growing optimism over the stability and strengthening of the naira against the United States dollar, according to the Central Bank of Nigeria’s (CBN) Business Expectations Survey (BES) for December 2025.
The survey, which captures the views of business leaders across key sectors of the economy, reflects increasing confidence in exchange rate stability and an improving outlook for credit conditions in the near to medium term. As expectations for the naira improve, businesses also anticipate a gradual decline in borrowing costs, although lingering structural challenges are expected to continue weighing on overall economic performance.
Data from the survey show a steady rise in confidence about the naira’s performance against the dollar over the review periods. The exchange rate expectation index stood at 26.6 for the current month, rose to 28.8 for the next month, increased to 36.4 over the next three months, and climbed to 39.7 over the next six months, indicating strengthening expectations of currency stability.
Similarly, expectations of borrowing rates point to a gradual easing of credit conditions. The borrowing rate expectation index declined from 15.6 in the current month to 14.7 in the next month, 11.5 over the next three months, and 9.9 over the next six months.
The CBN noted that respondents expect the naira to steadily appreciate against the US dollar across the review periods, while also anticipating a continuous positive outlook for borrowing rates over the same timeframe.
Analysts attribute the improving outlook to tighter monetary management, ongoing foreign exchange reforms, improved dollar liquidity, and increased confidence following recent policy adjustments by the apex bank. However, the survey also highlights persistent weaknesses in the real sector. Average capacity utilisation across sectors stood at 49.8 per cent in December 2025, indicating that many businesses are still operating below optimal levels despite the improving macroeconomic expectations.
According to the CBN, structural constraints, including infrastructure deficits, high taxation, and limited access to affordable credit, continue to limit the extent to which improved sentiment can translate into sustained economic expansion.
Meanwhile, the naira weakened slightly to N1,431 per dollar at the official foreign exchange market on the first trading day of 2026, reflecting cautious sentiment as the FX market reopened after the New Year holiday.
