Nigeria’s aggregate Business Confidence Index (BCI) has dropped, Lagos Chamber of Commerce and Industry (LCCI) has said. The LCCI, in its first quarter 2014 aggregate report said the confidence has shrunk to 11 per cent from 17.6 per cent it posted in the fourth quarter of 2013.
BCI is a leading economic indicator designed to measure the degree of optimism on the state of the economy that business leaders are expressing through their activities of investing and spending. Decreasing business confidence is often a pointer to slowing economic activities because business owners are likely to decrease their investment. The more confident entrepreneurs and managers feel about the business environment, the more likely they are to make new investments, create job and impact the economy.
The report signed by the Director General Mr. Muda Yusuf said the indicators represents a 6.6 per cent drop of the index over Q1-2013 and Q3-2013. He explained that the drop of the BCI score at this time suggests that business leaders are increasingly wary of some lingering uncertainties in the country. This is a signal that investors are likely going to be softer towards expanding their interest in Nigeria over the next few months he said.
Factors such as slower consumer demand, lagged approval of federal budget, political realignments, tight credit conditions, adverse public power supply and the lingering security challenges largely contributed to the depressed confidence level at this time, he added.