Businesses across Nigeria say high interest rates have become the most severe threat to their operations—more disruptive than insecurity or erratic electricity—according to the Central Bank of Nigeria’s latest Business Expectations Survey (BES) for June 2025.

The survey, conducted from June 16 to 20 by the apex bank’s Statistics Department, covered 1,900 firms across sectors such as Industry, Agriculture, Construction, Wholesale/Retail, and Services. It found that businesses gave high interest rates a constraint index score of 75.6, edging out insecurity (75.2) and insufficient power supply (74.3)—two problems that have historically topped Nigeria’s list of economic bottlenecks.

“Respondents identified High interest rate (75.6), Insecurity (75.2) and Insufficient power supply (74.3) as the top three business constraints in June 2025,” the CBN stated.

The result underscores the growing strain on corporate finances, especially among small and medium-sized enterprises (SMEs), as Nigeria maintains tight monetary policy to curb inflation and stabilize the naira.

How the Interest Rate Became a Bigger Threat than Insecurity

The elevation of interest rates as the top constraint reflects a shift in the risk profile businesses now face. Since early 2024, the CBN has aggressively raised its benchmark Monetary Policy Rate (MPR) to rein in inflation, which peaked near 34% in April before moderating slightly. The MPR currently stands at 27.5%, with commercial lending rates in some cases exceeding 30%, making it exceedingly difficult for firms to access affordable credit.

While insecurity—particularly in the North-West and Middle Belt—remains a serious operational hazard, and poor electricity supply continues to sap productivity, the financial impact of borrowing costs is now perceived as more immediate and pervasive.

Other Headwinds: Taxes, Bank Charges, and the Economic Climate

The survey also lists other top operational burdens. High bank charges scored 73.2, followed by high taxes (68.9) and an unfavorable economic climate (68.7). Unclear economic laws (67.4), poor infrastructure (62.4), and an unfavorable political climate (62.5) were also mentioned, though they ranked slightly lower.

According to the CBN, “This suggests that business constraints are more focused on economic and financial risks than political challenges in the review period.”

Optimism Holding, but Not Everywhere

However, the outlook remains surprisingly upbeat. The Business Confidence Index (BCI) for June stood at 20.7, with projections showing it could rise to 41.3 in the next six months as businesses anticipate improved economic activity.

The optimism varies significantly by region. In the South-East, confidence is lowest at 4.4, with the CBN attributing this to the acute effect of high interest rates and sluggish local activity. In contrast, the North-East registered the highest optimism at 37.1, as some firms see more stable conditions and anticipate relief measures.

The BES also found that businesses expect the naira to appreciate in the coming months, driven by a mix of tighter monetary controls and improved foreign exchange inflows. However, expectations of further increases in borrowing costs persist, raising concerns about access to capital.

Policy Implications: MPC Holds, or Cuts?

The CBN’s Monetary Policy Committee (MPC) is currently meeting, and analysts are split on the next move. While many expect the Bank to hold the MPR at 27.5% for a third consecutive time, others are betting on a modest rate cut to 27.25%, possibly accompanied by tweaks to the asymmetric corridor as a signal of cautious policy calibration.

In summary, the rise of interest rates as Nigeria’s top business constraint signals a pivotal shift in how firms experience economic hardship. While physical threats like insecurity and poor infrastructure remain persistent, the financial toll of borrowing is now taking center stage—putting even more pressure on the CBN to balance monetary tightening with policies that foster growth and productivity.

The June BES paints a picture of cautious optimism wrapped in frustration, as firms navigate a terrain where costs are climbing and opportunities are tightening. Whether this changes after the MPC meeting could define the tone of Nigeria’s business environment for the rest of the year.

Ahmadu Bello University (ABU), Zaria, has secured a €5 million grant from the European Union’s Horizon Europe EDCTP3 programme to develop an AI-powered microscope that could transform the diagnosis of parasitic diseases in rural Africa.

The grant, announced by the university on Monday, will fund the MultiplexAI project—an initiative that aims to bridge the diagnostic gap in underserved and remote communities using artificial intelligence and smartphone-enabled tools.

This milestone places ABU among a growing number of Nigerian institutions embracing AI-driven solutions to tackle endemic development challenges. The MultiplexAI project, one of only four selected from a pool of 240 submissions under the Horizon Europe call titled “Innovative Digital Health Solutions for Sub-Saharan Africa”, marks the first time the institution will host a digital health initiative funded under the Horizon Europe framework.

The microscope, powered by AI and paired with a smartphone and a mobile app, is expected to simplify early detection of parasitic infections such as malaria, African trypanosomiasis (sleeping sickness), leishmaniasis, and filariasis—diseases that disproportionately affect impoverished populations with limited access to conventional diagnostic labs.

Leading the project is Dr. Gloria Dada Chechet, a molecular parasitologist and Reader in the Department of Biochemistry at ABU. She will supervise the work under the Africa Centre of Excellence for Neglected Tropical Diseases and Forensic Biotechnology (ACENTDFB), based at the university. Known for her research on tropical disease diagnostics, Dr. Chechet has received numerous international fellowships and recognition for advancing women in science.

In its statement, ABU hailed the grant as “a new benchmark for digital health innovation on the continent,” noting that it enhances the university’s global visibility and places it at the forefront of AI-driven medical research in Africa.

Broader AI Momentum in Nigeria

The ABU development is part of a broader trend as Nigerian institutions, both academic and public, increasingly adopt AI to drive innovation and address systemic challenges.

Early this month, Nigeria’s Corporate Affairs Commission (CAC) launched the integration of AI-powered assistant into its service delivery. The commission deployed AI to help users navigate business registration processes, retrieve documentation, and get real-time assistance. The move is part of the CAC’s broader digital transformation strategy and was launched to reduce the turnaround time in service delivery and curb human interference.

In academia, the University of Lagos has also begun integrating AI into its research and teaching modules, with several workshops conducted to expand the school’s AI adoption.

Nigerian startups have also shown growing interest in AI. Health-tech firms are exploring AI for genetic research and hospital automation, respectively, while edtech companies are integrating AI to enhance personalized learning for students.

The developments are in line with Nigeria’s National Digital Economy Policy and the Presidential Enabling Business Environment Council (PEBEC) roadmap, which aims to position Nigeria among the top-performing economies in the World Bank’s Doing Business Index. Since the 2017 reform drive, Nigeria has introduced several initiatives to streamline business procedures, but the integration of AI into regulatory operations marks a significant leap forward.

A Strategic Leap for Health Diagnostics

The significance of ABU’s MultiplexAI project lies in its ability to democratize healthcare access by replacing centralized lab infrastructure with mobile, intelligent tools usable in the field. According to the university’s statement, “community health workers in hard-to-reach areas will soon be equipped to detect multiple parasitic infections using only a smartphone and a microscope—dramatically improving early diagnosis and treatment outcomes.”

The development also aligns with Nigeria’s digital economy strategy, which emphasizes AI and emerging technologies as key pillars for public service delivery and innovation. The National Information Technology Development Agency (NITDA) has recently revised its AI policy draft, proposing the creation of an AI Research Fund to support academic and commercial AI innovation across the country.

Oando Plc has announced plans to raise up to N500 billion in new capital as part of a sweeping financial restructuring and strategic growth plan aimed at strengthening its balance sheet and expanding its operations.

The Nigerian energy firm disclosed this in a notice filed with the Nigerian Exchange Limited (NGX) on Monday, July 21, ahead of its 46th Annual General Meeting slated for August 11.

Signed by Ayotola Jagun, the company secretary, the notice revealed that Oando intends to issue up to 10 billion new ordinary shares of 50 kobo each. These will be floated through public offerings, private placements, rights issues, or debt-to-equity conversions — depending on the route the company’s board chooses in line with market conditions and investor sentiment.

According to the document, the capital raise may be conducted in both local and international markets. The company said it would be authorized to “raise additional capital of up to N500 billion or its foreign currency equivalent… at price(s) determined through book building or any other acceptable valuation method.” The process is subject to regulatory approvals.

As part of the broader financing strategy, Oando’s board is also seeking shareholders’ approval to convert up to $300 million of its Reserve-Based Lending (RBL) debt into equity. The company is targeting key stakeholders and lenders as part of this planned conversion, further emphasizing efforts to ease its debt burden and improve liquidity.

In a related move, Oando plans to establish a multi-instrument issuance programme worth up to $1.5 billion, enabling it to issue bonds, certificates, or other financial instruments. The goal is to diversify funding sources and provide flexibility in executing future capital raises.

The company added that it may absorb surplus funds from any oversubscription that results from the issuance, provided it complies with regulatory limits and approvals.

Financial Position and Stock Performance

Oando’s restructuring comes at a pivotal moment for the company. On Monday, its share price traded at N50.00, marking a 0.50 naira or 0.99 percent drop from the previous trading session. Over the past month, the stock has lost 20.89 percent in value, reflecting market caution amid broader volatility.

However, the long-term outlook remains robust — the stock has surged by 184.09 percent over the past year, according to data from Trading Economics.

Forecasts suggest that Oando may face short-term headwinds. Analysts project the share price will ease to N49.94 by the end of the current quarter and dip slightly to N48.31 within a year. Still, analysts believe the restructuring and recent acquisitions could improve the company’s fundamentals going forward.

Recent Acquisition and Segment Focus

The capital raise follows Oando’s landmark acquisition of a 100 percent stake in Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni in August 2024. The deal gives Oando full control of key assets and is expected to significantly boost its production capacity and reserves.

Oando Plc operates as a fully integrated energy solutions provider in Nigeria and across the West African region. Its operations are divided into four major segments: Exploration and Production (E&P), Supply and Trading, Gas and Power, and Corporate & Others. The E&P arm handles upstream operations — including oil exploration and production — through rights acquired in blocks located both onshore and offshore Nigeria.

The company says the capital injection will allow it to optimize existing operations and drive new investments across its supply chain — particularly in upstream assets, midstream infrastructure, and trading capacities.

Oando is positioning itself for more aggressive growth despite uncertainties in global oil markets and domestic economic headwinds by converting part of its debt to equity and establishing a large-scale multi-instrument programme. If successfully executed, the move is expected to place the company among the most financially agile indigenous energy players in sub-Saharan Africa.

The company emphasized that its board will be empowered to “enter into any agreements and/or execute any documents, appoint such professional parties, perform all such other acts and do all such other things” to facilitate the capital raise, subject to regulatory clearance.

Yahoo Japan has ordered its 11,000 employees to begin using generative artificial intelligence tools in their daily tasks, making AI use not just encouraged, but compulsory.

The policy, which covers a wide range of office functions including document creation, search, research, communications, and meeting logistics, is part of a company-wide effort to double worker productivity by 2028.

The Japanese tech giant, which operates the Line messaging app and a number of other web services, says workers spend nearly 30% of their time on routine tasks—time it believes can be significantly cut with AI. For now, Yahoo Japan is relying on its in-house AI tool, SeekAI, already being used to handle expense reimbursement and prompt generation. That tool, and others, will now be deployed more broadly for proofreading, writing, planning, and communications.

This bold move, first reported by PC Watch, reflects a growing trend in the corporate world, where AI is no longer just an enhancement tool but a central expectation of employee workflow. Earlier this year, Shopify CEO Tobi Lütke issued a similar directive to his employees, declaring that AI use was now a “baseline expectation.” Teams were told not to request additional headcount or resources without first demonstrating that AI couldn’t achieve the desired result.

The Productivity Question

Companies betting heavily on generative AI believe it can act as a powerful productivity multiplier. Tasks that previously took hours can be compressed into minutes using large language models. This automation of mundane functions, they argue, frees workers to focus on high-level, strategic, or creative assignments.

But emerging data and workplace experiences tell a more complicated story.

Multiple studies have shown that AI does not always improve productivity—and in some cases, it can do the opposite. A recent report involving professional software engineers found that developers took 19% longer to complete tasks when using AI tools. Other studies from last year found that AI use often resulted in slower work speeds, particularly in knowledge-heavy fields that rely on depth and accuracy.

Call center workers in particular have complained that AI assistants—designed to make support calls smoother and faster—often disrupt workflow by giving incomplete or incorrect suggestions. In those environments, the result was increased frustration and a drop in performance.

Amazon warehouse and tech workers have raised similar concerns, describing AI-driven expectations as “relentless,” creating pressure to maintain continuous output at the expense of creativity and worker well-being.

AI’s Effect on Critical Thinking

One of the core concerns among analysts and educators is that over-reliance on AI in everyday tasks could degrade critical thinking and problem-solving abilities over time. With machines generating summaries, conclusions, and even proposals, some fear employees will be less inclined—or less able—to challenge assumptions, apply deep reasoning, or innovate on their own.

Despite these concerns, business leaders and tech executives continue to advocate for AI adoption. Nvidia CEO Jensen Huang, whose company dominates the AI chip market, has repeatedly defended the use of AI tools in the workplace. Huang argues that rather than replacing thinking, AI helps amplify human capabilities—especially for those with limited expertise or access to tools. In his view, AI will “democratize” productivity, allowing more people to perform skilled tasks and accelerate their learning curve in complex industries.

“AI is not going to take your job,” Huang said. “But someone using AI will.”

The Unspoken Risks

What’s not yet clear in Yahoo Japan’s strategy is what happens if the ambitious productivity goals aren’t met. The company has not disclosed whether there are enforcement mechanisms or performance reviews tied to AI integration. And while the firm has stopped short of cutting staff, the rapid automation of basic functions raises questions about future workforce needs.

However, the message from Yahoo Japan is that the future of work lies with artificial intelligence, and employees are expected to embrace it as the new standard.