Rewane Predicts Potential 6% GDP Growth in 2025, Highlights Budget Challenges

The Chief Executive Officer of Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has projected that 2025 would be less hard for Nigerians than 2024, just as he expressed optimism that with the right policies, Nigeria’s economy may grow by six percent next year.

Rewane made his projections in a presentation titled, “The Restoration Budget: Policies, Promises, and Aspirations, Lags and Impact,” in which he analysed the N49.74 trillion federal government’s 2025 budget proposal. He also projected that the pump price of petrol may increase to N1,200 per litre in 2025.

President Bola Ahmed Tinubu during the week presented a proposed 2025 budget to the National Assembly.  The appropriation bill was made up of N49.74 trillion expenditure, N36.35 trillion revenue and a deficit of N13.39 trillion.

According to Rewane, even though the “base case for GDP growth is four percent, the best case scenario of six percent is feasible if the right things are done. If we get six percent we should be celebrating. Generally speaking, I am cautiously optimistic that 2025 will not be as hard as 2024.”

He averred that there was more to a budget than a name because in economic management, a budget’s impact is always determined not by its label but by its outcomes.

Rewane said: “In 2000, President Obasanjo referred to his budget as ‘The People’s Budget,’ while President Buhari in 2016 called his ‘The Budget of Change.’ Similarly, the 2025 ‘Budget of Restoration’ may not gain significance from its name but from its role as a tool for economic management.

“However, some of the key assumptions underlying the 2025 budget are over optimistic. The inflation target of 15 per cent, down from the current level of 34.6 per cent sounds far-fetched. The benchmark price of Brent leaves no headroom for market swings. Furthermore, the reference to $40 billion of gross external reserves could be misleading.”

But, will Nigerians be better off in 2025? According to Rewane, the economy was expected to see incremental improvements in 2025, but progress would require coordinated efforts from the government, corporations, and consumers alike.

“Luckily, promising investments, such as the Dangote Refinery, and Shell’s investment in Bonga are a shot in the arm.”

Rewane projected that the price of petrol would increase to N1,200 per litre in 2025 while the price of diesel might decrease to less than N1,000.

According to the economist, the Naira could appreciate and stabilise at N1,550/$ (parallel market) in 2025. He, however, viewed the government’s inflation target of 15 percent in 2025 as too optimistic, predicting the consumer price index to be around 25 percent next year.

The analysts however pointed out that even though the proposed 2025 federal government’s budget increased nominally by 41.76 per cent, “Nigeria is spending less in dollar terms” thereby “limiting the government’s ability to stimulate growth.”

According to him, Nigeria’s federal budget has declined successively in dollar terms from $47.39 billion in 2023 to $36.7 billion and $32.09 billion in 2024 and 2025 respectively.

Rewane said the important thing about a budget was not the label attached to its presentation but how much would be spent, “how much is to be earned, its surplus or deficit, how it would be funded and the economic objectives it is targeting because a budget is a tool of economic management.”

He stated that “a budget deficit is a good tool for stimulating growth during slowdowns” but remarked that, “a 5.0 per cent annual growth over the next five years would not deliver a $1trn economy by 2030.”

He added that in a period of 30 years, Nigeria’s government has achieved a fiscal surplus only twice in1995 and 1996 during the regime of late General Sani Abacha.

But he cautioned that a, “deficit of today is the national debt of tomorrow.” 

Rewane pointed out that despite the sustained deficit budgeting of almost 28 years, key economic indicators are revealing that Nigeria’s GDP per head declined from $1,597.4 in 2023 to $910.7 in 2024; national debt per head also declined from $438.2 in 2023 to $418.7 in 2024.

Also, foreign debt service per head increased from $46.54 in 2023 to $47.65 in 2024 while external reserves per head dropped from $175 in 2023 to $172 in 2024.

He also agreed that the exchange rate assumption of N1,500 is realistic because “aligning exchange rate assumptions to market realities improves budget feasibility and economic confidence.”

Deji Elumoye and Dike Onwuamaeze

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