Borrowing Costs May Go Down as Naira Improves — CBN Survey

Borrowing money in Nigeria could become cheaper in the coming months as confidence in the naira continues to improve, according to a new survey by the Central Bank of Nigeria (CBN).

The outlook is contained in the CBN’s Business Expectations Survey for December 2025, which gathers opinions from business leaders across major sectors of the economy. 

The survey looks ahead and asks companies what they expect to happen to key economic indicators such as exchange rates, interest rates, and business conditions.

Why borrowing costs may fall

The survey shows that many businesses believe the naira will become more stable and slightly stronger against the US dollar over the next six months. As this confidence grows, companies also expect borrowing costs to slowly come down.

CBN data indicates that expectations for the naira’s performance improve steadily over time. Confidence is lowest in the current month but rises month by month, reaching its strongest level in the six-month outlook. 

This suggests that businesses believe recent policies and reforms could help stabilise the foreign exchange market.

In the same way, expectations around borrowing rates show a gradual decline. Businesses anticipate that loan costs will reduce over the next one, three, and six months. While the change is expected to be slow, the direction is clear, credit conditions are likely to ease rather than tighten.

According to the CBN, respondents generally expect the naira to appreciate over the review period and believe borrowing rates will improve alongside it.

What is driving the optimism

Analysts say the positive outlook is linked to better monetary management by the CBN, reforms in the foreign exchange market, improved access to dollars, and increased confidence following recent policy decisions. 

These factors have helped calm fears around currency volatility, even if challenges remain.

However, the survey also makes it clear that optimism has not yet fully translated into strong business activity.

Challenges still remain

Despite better expectations, many Nigerian businesses are still struggling to operate at full capacity. Average capacity utilisation across sectors was just under 50 percent in December 2025. 

This means many factories, offices, and service providers are producing far below their potential.

The CBN pointed out that long-standing issues such as poor infrastructure, heavy tax burdens, and limited access to truly affordable loans continue to slow economic growth. These problems could delay the impact of lower borrowing costs on real business expansion.

Recent market reality

It is also worth noting that the naira showed slight weakness at the start of 2026, slipping to about ₦1,431 per dollar at the official foreign exchange market when trading resumed after the New Year holiday. 

This suggests that while expectations are improving, market sentiment remains cautious.

Overall, the CBN survey paints a hopeful but careful picture. Borrowing costs are expected to ease gradually as confidence in the naira improves, but structural challenges mean the road to full economic recovery may take time.