Economic Recovery vs Fiscal Strain
Nigeria’s inflation rate, which fell to 20.12% in August, is projected to drop further to 18% by November, according to Financial Derivatives Company CEO, Bismarck Rewane.
Speaking at the Lagos Business School October Breakfast Session, Rewane described Nigeria’s economic recovery as “authentic,” highlighting GDP growth of 4.23% in Q2 2025 — the strongest in four years.
“This recovery is real but delicate. Fiscal indiscipline could still derail it,” he cautioned.
Oil Price Drop and Fiscal Deficit
With crude oil prices now hovering around $63.60 per barrel, down from the budget benchmark of $75, Rewane warned Nigeria’s fiscal deficit could widen to 5% of GDPIDNN 15.10.25.
He said the fall in oil revenue threatens spending capacity, debt service, and exchange rate stability.
“At $60 per barrel, Nigeria risks losing 2% of its fiscal space,” he noted.
📊 Impact Snapshot
- Inflation Outlook: 18% (November projection).
- Fiscal Risk: Deficit may widen to 5% of GDP.
- Cost of Governance: ₦54.99 trillion (2025).
- MPC Outlook: Expected 25bps rate cut to 26.75%.
Governance Cost and Debt Trap
Rewane criticised the country’s rising cost of governance, which has ballooned from ₦27.7 billion in 1998 to ₦54.99 trillion in 2025 — a figure he called “economically reckless.”
He urged immediate expenditure reform and asset concessioning to sustain recovery momentumIDNN 15.10.25.
“If we cut waste, our debt burden could fall by ₦1.5 trillion by 2026,” he projected.
Monetary Outlook and Policy Signal
Rewane predicted that the Central Bank of Nigeria’s Monetary Policy Committee (MPC) may cut the Monetary Policy Rate (MPR) by 25 basis points to 26.75%, describing it as “a cautious move to steady the market.”
He also advised debt relief measures for power firms, improved tax collection, and greater incentives for domestic investors to deepen growth fundamentals.
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