Businesses Plan Increased Spending Amid Inflation Concerns

Despite mounting concerns over Nigeria’s high inflation, nearly half of the country’s business operators are preparing to increase their spending in the coming months, according to the latest survey conducted by the Central Bank of Nigeria (CBN).

The May 2025 Inflation Expectations Survey (IES), released by the CBN showed that 46.7 percent of business respondents plan to increase expenditures, in contrast to 32.6 percent of households, who expressed similar intentions.

This development signals rising business confidence in the resilience of the economy, even as inflationary pressures continue to bite across key sectors.  According to the CBN report, businesses cited a range of factors influencing their inflation outlook and spending decisions, including currency volatility, transport costs, and security challenges affecting supply chains.

Despite these concerns, many firms indicated a willingness to take bold steps to weather economic turbulence and secure growth prospects.

More businesses 75.1 expected their expenditure to increase compared to households 67.1 in the current month. Both households and businesses largely anticipate increased expenditure over the next six months. However, the longer horizon, expectations on increase in the expenditure moderated slightly while the proportion or respondents expecting a decrease is rising.

The survey also highlighted that large enterprises and urban-based respondents were more likely to perceive inflation as high, a sentiment that continues to shape spending behaviours. Yet, rather than cut costs, some businesses appear to be adapting by expanding investments to offset rising input costs and prepare for projected shifts in consumer demand.

The headline inflation rate stood at 33.69 per cent in April 2025, according to the National Bureau of Statistics (NBS), driven largely by surging food and transport costs. The CBN has responded with a raft of tightening measures, including adjustments to the Monetary Policy Rate (MPR), and interventions in the forex market aimed at stabilising the naira.