Dear Subscriber,
Throwing grenades into your own trench
The Tariff war and reciprocity has become mutually destructive. The much-anticipated détente with China has curdled into a cold, rigid standoff. China will not blink, and the U.S. is doubling down, hiking tariffs on Chinese goods to a staggering 245%. But it does appear that the US could be the biggest loser! US inflation expectations are rising, consumer confidence has slumped to a four-year low, and recession fears are building.
The return of global uncertainty
The October 1987 stock market crash, the Southeast Asia financial crisis of 1998 and the 2008 economic meltdown taught the world a lesson. It showed that uncertainty reduces investor confidence and could lead to a recession. Therefore, with the emergence of the tariff wars and the reciprocal actions we are back to a world of heightened uncertainty. Luckily, there are guardrails and checks and balances.
Institutional checks and balances are the protection against financial crises.
In spite of the current global uncertainties triggered by the US tariff blitz, there are checks and balances, and separation of powers that could help to guard against executive excesses. The independence of the Federal Reserve System (Fed) coupled with the tenacity of the World Trade Organization (WTO) is easing fears of a global recession.
The Fed has refused to bow to executive pressure to cut rates, warning of inflationary spillovers. The WTO has cautioned that a full decoupling between the U.S. and China could shrink global GDP by as much as 7% in the long term. Even the IMF has begun revising global growth forecasts.
Nigeria’s new data points may be masking fragility
The recently released March inflation figures surprised to the upside, printing at 24.2%, up from 23.2% in February—a sharp reversal of the deflationary trend triggered by the January CPI rebasing. More troubling is that core inflation has remained stubbornly high, showing no signs of moderation since January. The resurgence of headline inflation, coupled with sticky core prices, suggests underlying structural price pressures.
The trade balance more than doubled to $13bn in 2024, up from nearly $5bn in 2023. However, the surplus was driven more by falling imports than by rising exports. Additionally, 89% of the $10bn in investment inflows recorded in 2024 were short-term portfolio investments—traditionally volatile and easily reversed. In March 2025 alone, capital inflows plunged by 65% following a brief pause in CBN tightening. The lesson is simple: cosmetic calm is not the same as structural strength. Nigeria remains acutely vulnerable to both domestic and external shocks.
In this edition of FDC Whispers, The FDC Think Tank and Bismarck Rewane dissect the Nigerian macroeconomy and the danger of a fragile calm. It argues that Nigeria must pivot—urgently—from tactical firefighting to long-term structural reinforcement.
Enjoy!!!
