Nigeria’s inflation rate, which dropped to 20.12 per cent in August 2025, is projected to decline further to 18 per cent in November, according to the Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane.
Speaking at the October edition of the Lagos Business School (LBS) breakfast session, Rewane attributed the anticipated drop to increased imports aimed at meeting December demand, noting that Nigeria’s economic recovery remains strong.
He described the recovery as “authentic,” citing the nation’s real GDP growth of 4.23 per cent in Q2 2025 — the highest in four years since Q2 2021, when it grew by 5.01 per cent.
Rewane, however, warned that a ceasefire in Gaza could lower global oil prices, potentially worsening Nigeria’s fiscal deficit.
He said, “At $60 per barrel, Nigeria’s fiscal deficit could climb towards 4.5–5 per cent of GDP.”
Nigeria’s 2025 budget was benchmarked at $75 per barrel with a crude oil production target of 2.06 million barrels per day. As of Monday, October 13, crude oil traded at $63.60 per barrel, while the country’s output stood at 1.581 million barrels per day.
Data from the Debt Management Office (DMO) show that Nigeria’s total public debt rose to N152.40 trillion ($99.66 billion) as of June 30, 2025, an increase of N3.01 trillion from the N149.39 trillion ($97.24 billion) recorded in March.
The country spent $932.1 million and N1.7 trillion on external and domestic debt servicing respectively in Q2 2025.
Rewane noted that out of 46 tracked economic activities, 32 expanded, 10 slowed, and four contracted. Industry grew by 7.45 per cent, services by 3.94 per cent, and agriculture by 2.82 per cent.
On monetary policy, he said the Central Bank of Nigeria’s Monetary Policy Committee (MPC) would likely adopt a cautious approach in November, predicting a modest 25 basis point cut in the Monetary Policy Rate (MPR) to 26.75 per cent per annum to sustain disinflation.
He added that the Cash Reserve Ratio (CRR) of 75 per cent on non-TSA funds would tighten liquidity in the money market, but a lower MPR could reduce the federal and state governments’ debt service burden by about N1.5 trillion in 2026.
Rewane also highlighted that with gold prices exceeding $4,000 per ounce for the first time in history, Nigeria’s external reserves in gold could become the country’s second-largest reserve asset.
“The weaker the U.S. dollar, the higher the price of gold,” he said, predicting that Nigeria’s Eurobond issuance in November would be cheaper than current rates.
Looking ahead, he projected sustained growth through October and November, driven by forex stability and steady currency appreciation.
He also noted that increased travel demand, boosted by business and tourism, would support passenger traffic, though tightening U.S. visa rules could dampen demand from emerging markets like Nigeria.
On challenges to growth, Rewane identified the rising cost of governance as a major impediment to capital accumulation and investment, urging fiscal restraint.
“For the recovery to be sustainable, there is an urgent need to reduce the cost of governance,” he said, contrasting the N27.7 billion spent in 1998 with the N54.99 trillion projected for 2025.
He further recommended power sector debt forbearance, incentives for domestic investment, improved tax collection, and the concessioning of airports, seaports, and refineries to sustain growth.
Meanwhile, the World Bank, in its October 2025 Nigeria Development Update titled From Policy to People: Bringing the Reform Gains Home, acknowledged Nigeria’s economic growth but warned that poverty and food insecurity remain widespread.
It urged the government to remove trade barriers on food and intermediate goods, noting that import duties ranging from 5 to 35 per cent remain a key driver of food inflation.
