Dear Subscriber,
Not all dogs that bark can bite
Since the inauguration of Trump on January 20, 2025, he has signed a flurry of executive orders that are at odds with American values and strategic interests. Global responses have ranged from consternation to anger and frustration. Some see these developments as a major challenge or source of stress, whilst a few others view them as a window of opportunity and a lever for growth. Meanwhile, Trump has engaged in a spree of tariffs and threats against nearly everyone, but in response, there have been almost equal counterthreats and retaliatory actions.
Nigeria must now be resilient
In the global scheme of things, scale and size matter more than anything else. While Nigeria may perceive itself as an economic giant, its relevance on the global stage has diminished considerably compared to what it once was or what it thinks it is. Analysts view the situation as a glass both half-full of benefits and half-empty with problems. However, the primary benefit in this world of political and economic uncertainty is the incentive and urgency to build a resilient economy, which could lead to a reversal of the “Japa” syndrome.
We foresee an economy capable of achieving a growth rate in excess of 4% this year.
We anticipate gross capital formation at $60bn, a national savings ratio at 34.8%, a sharp increase in government spending, and numerous other ancillary benefits.
These projections are based on strategic responses to anticipated global shocks, including the removal of economic constraints and structural barriers, policy reforms to enhance the business and investment environment, and the strengthening of domestic industries to reduce external vulnerabilities.
Delays are expensive, inaction is debilitating and doing nothing is destructive
Highway Development Management Initiative (HDMI)—now an albatross of growth. Nigeria is like a morgue of abandoned projects. Easy to start and easier to kill. The FGN in 2022 came up with the novel idea of highway concessioning. In all, about 19 federal highways were selected for rehabilitation and tolling. The FEC approved and reached financial closure with investors. Everything looked great until the current Federal Minister of Works came into the picture. First as a catalyst and next as a spoiler. Cost overruns, delays, and inflation have turned what was a great initiative into a nightmare. Investors are licking their wounds, and Nigerian road users are suffering, smiling and hoping for the best. Case studies from major road projects illustrate how prolonged delays escalate costs—by as much as 30% annually—leading to stalled investments worth trillions of naira. Productivity losses from inefficient infrastructure are estimated at over $29 billion per year, according to the World Bank.
Economic stability hinges on policy execution
The good news is that the naira has begun to strengthen, appreciating by 6.07% to ₦1,565/$ in the parallel market so far in 2025. The naira is gaining on technical factors with gross external reserves falling to $39.5bn. Also, the price of petrol at the refinery has dropped to ₦890/litre, even though consumers are yet to see a corresponding reduction at the pump. In Q1’25, inflation is projected to ease marginally towards 33.1%, reflecting a stable naira and fairly lower food and fuel prices.
In the latest LBS Breakfast Session, Bismarck Rewane and the FDC Think Tank offers an evidence-based analysis of Nigeria’s economic trajectory in 2025, spotlighting the impact of global, regional, and domestic economic policies on businesses, consumers and markets.
Enjoy your read!
