The maiden Nigerian Business Confidence Index (BCI), conducted by the Lagos Chamber of Commerce and Industry, has indicated a negative business expectation for the real sector of the economy in the first quarter of 2013.
LCCI described the BCI survey as a premium model built on the Organisation for Economic Co-operation and Development (OECD) methodology and integrating the peculiar factors that impact domestic business outcomes in Nigeria.
Speaking at the presentation of the BCI survey in Lagos, the President of the Chamber, Goodie Ibru, disclosed that chamber commenced a series of scientifically evidential measurements of the developments in the Nigerian economy to form the baseline for their advocacy focus.
He disclosed that the country was currently lagging behind the 50 per cent score of global threshold between BCI pessimism and optimism. "Aggregate BCI scores show that business confidence in Nigeria is currently at a record low with a weighted 10.5 per cent," he said.
"The 2013 first quarter BCI outcome shows that apart from the hotels, telecoms/IT, oil and gas and the finance sectors, business executives in the extractive, processing and trade sectors posted a staggering negative business expectation," he revealed.
Ibru explained that BCI indicators are designed so that the score fluctuates between zero and 100 per cent and that as investment grows, the indicator would increase with a similar decline if business leaders become more pessimistic.
He said the time has come when the Nigerian government would be aided with results of various surveys to be conducted by interest groups like consultants, the media, research institutes, chambers of commerce and statistics bureaus in the country.
"I am calling on government to give more financial support to the National Bureau of Statistics to strengthen its capacity to provide the needed data and statistics for information users in this country. I also task the statistical agencies on timely release of data as appropriate for decision making and planning," he said.
According to the BCI, when asked whether they will hire new employees in 2013, 85 per cent of business leaders confirmed that they are either considering keeping their current workforce size or slashing it down. This indicates that the official 23.9 per cent unemployment figure in the country is expected to remain sticky in the months to follow.
The BCI also revealed that 98.5 per cent of business executives are planning to expand or open new plant/shop outside Lagos and that the FCT, Port-Harcourt, Ogun, Ibadan and Aba are top locations on their list.
The survey however noted on a sad note that no northern state/city was mentioned among the top 15 alternative investment destinations in 2013.
According to the LCCI Director for Research and Advocacy, Vincent Nwani, the BCI score was found to fluctuate significantly in line with age, size and location of firms in Nigeria. For instance newer companies (1-5years old) and bigger companies (250-over 1,000 employees and over N500million turnover per annum) exhibited a relatively higher optimism.
"The computation of the first BCI for Nigeria will serve as a guide to businesses and investors on the turning points in the economy and a basis for a continuous quarterly BCI survey, analysis and report for the country," he said.
He added that over the medium term, LCCI plans to employ a time series cross sectional analysis on all the control variables (weighted aggregate, sectors, firms' size, age and location) and BCI questions to gauge seasonality and business confidence over different political regimes.
He expressed hope that the LCCI Nigerian BCI initiative would find the interest of sustainable financiers/sponsors as obtained in most jurisdictions across the globe.