Nigeria – FX concerns hit business sentiment

LAGOS, Nigeria, Capital Markets in Africa — The Standard Chartered-MNI Business Sentiment Indicator (BSI) for Nigeria fell to 59.2 in February, its lowest level since February 2015. Seasonal factors seem to have been partly at play, as activity slows in January and February following an increase over Christmas. However, concerns about the exchange rate also continue to weigh on sentiment. Nigerian businesses were concerned about current business conditions, as the economy continues to be pressured by weak oil prices and as a restrictive FX regime significantly overvalues the official exchange rate and constrains new inflows. Nigeria’s FX shortage is affecting the prices companies pay for inputs, demand for Nigeria’s non-oil exports, and companies’ financial positions”, Razia Khan, Chief Economist Africa commented.