Dear Subscriber,
Numbers don’t lie—but do they tell the full story? On paper, Nigeria’s economy is on the mend. Inflation is down, the naira is up, and GDP is expanding. But for businesses and consumers: Is this a real recovery, or just smoke and mirrors?
No Need to Panic – It’s Not Lights Out for the Naira
In the last six weeks, the Naira has been on a roll, appreciating by 12.3%. But all of a sudden, the momentum has faltered. In a matter of two days, the naira has gone from N1502/$ to N1585/$, leaving many to wonder if this shift is temporary, permanent, or the beginning of a new reality?
When a currency is misaligned from its fair value, certain adjustments are inevitable. Last year, the misalignment was as much as 43%, but this year, it is smaller, and the path to equilibrium will be less turbulent. Therefore, there is no need to panic—keep your fingers and toes crossed.
Global Outlook – When Self-Inflicted Protectionism Backfires
Tariffs are back, and Trump is leading the charge. His “econocentric” trade policies, aimed at taxing Canada, Mexico, and China, will shake up global markets—but the irony? The biggest casualty might be the U.S. itself. While protectionist measures may score political points, they also raise costs, disrupt supply chains, and force companies to rethink investments. For businesses operating in or with the U.S., the next few months will be a delicate balancing act between policy risk and economic reality.
Nigeria’s Domestic Reality – A Tale of Two Perspectives
If you look at the numbers, Nigeria is in a good place. Inflation has fallen from 34.8% to 24.5%, the naira has strengthened, and petrol prices have dropped. The Purchasing Managers’ Index (PMI) is up, and government officials are optimistic. But here’s the catch: GDP growth isn’t creating jobs, sales volumes are shrinking, and disposable income is still under pressure. But the tide is changing as Q4’24 marked a turning point for companies and Fx losses in previous quarters are being recovered. For many, the “recovery” is something they read about, not something they feel. In the same economy, there are different stories.
“Happy people are excited about what they have. Unhappy people look for what’s missing.” Right now, Nigeria has both.
For the happy few, life is looking up. Petrol is cheaper, the naira is steadier, and companies are adapting by shrinking product sizes to keep prices low. Some businesses are even seeing early signs of recovery.
For the unhappy many, reality bites. International school fees have soared, FX losses are still hurting bottom lines, and job opportunities remain scarce. Worse still, skepticism over official economic data continues to fuel uncertainty—because when statistics and lived experiences don’t match, trust erodes.
The Big Questions for Q2
As we move forward, a few key questions from Nigerians to policymakers demand answers:
- When will the recovery finally start showing up in people’s pockets?
- How will global trade tensions spill over into local commodity markets?
- How will businesses navigate policy shifts without intensifying the heat on Nigerians?
In this edition of the LBS Breakfast Session, Bismarck Rewane and the FDC Think Tank unpack these global shifts, domestic contradictions, and economic realities, highlighting what they mean for your business and investment strategy.
Enjoy your read!
