Dear Subscriber,
The 2025 FDC economic periscope
The future is what matters!
Treacherously risky and pregnant with lucrative deals is a good way to describe the economic outlook for 2025, which makes Frank Knight’s theory of “unknown unknowns”, a credible basis to enter the new global dispensation.
As Frank Knight says, “Risk is about “known unknowns,” if we roll a pair of dice, we do not know what numbers will come up. Uncertainty reflects “unknown unknowns” — the things we cannot measure because there is no data”.
It is not the roll of the dice but a roll of the eyes that will determine your economic destiny in the year ahead. Based on simple yet complex quadratic equations and simulations, we’ve looked into our crystal ball to present you with some hard facts and forecasts.
Nigeria in 2025
Naira misalignment to reduce
The exchange rate is the price of the dollar in Naira terms (N1,650/$). It is the factor price that brings the domestic and external economies into equilibrium. We believe the Naira will appreciate mildly in 2025, starting in February and reaching N1,550/$ in first quarter. Our projections and estimates are based on the following: crude oil price at $70pb, oil production at 1.4mbpd, gradual but limited policy reform efforts, and modest FDI inflows, amongst others.
Dangote refinery – the economic white Knight??
Economic growth will be challenged in 2025 but is expected to be better than in 2024. The Economist Intelligence Unit (EIU) posits that real GDP growth will strengthen in 2025-26 as the Dangote oil refinery ramps up production. This development is expected to displace fuel imports and boost exports. In line with this, disinflation—anticipated to begin in Q2’ 2025—along with interest-rate cuts and greater exchange-rate stability, is likely to foster improved consumer and business confidence. Hence, we project GDP growth of 3.6% in 2025 and 3.5% in 2026.
In 2025, the Nigerian economy will be marked by fiscal and monetary policy efforts to reduce food prices. We expect an extension of the import duty waiver and possible data changes like a GDP rebasing and inflation basket reconstitution.
The global economy in the year ahead – More deals than steals
The global economy in 2025 will be marked by increased interconnectedness, driven by advancements in technology, strategic resource exploration, and impact-based lending, which will integrate global and regional economies.
Key commodities like gold, copper, nickel, and crude oil will remain central to trade dynamics, while global growth is projected to hover at 3%, with easing inflation and interest rate cuts. Geopolitical tensions are expected to ease, particularly under President Trump’s administration, triggering a decline in commodity prices. This shift will likely impact Nigeria’s oil revenues but could also reduce import costs for critical resources, offering some economic relief.
At this month’s LBS Breakfast and Dinner Time Session, Bismarck Rewane and the FDC Think Tank explored these economic issues in depth, providing a 2025 outlook for the global, regional (SSA), and Nigerian economies. The presentation touched on sector hotspots, investment opportunities, expected policy changes, and the implications for your businesses and portfolio.
Enjoy your read!
Have a merry Christmas and a wonderful new year.
