Bismarck Rewane, CEO of Financial Derivatives Company, has called for a pragmatic and balanced strategy to navigate Nigeria’s fragile economic terrain, cautioning against hasty spending cuts that could undermine essential priorities like security, investment, and inflation management.
Appearing on Channels Television’s Business Morning, Rewane responded to a recent International Monetary Fund (IMF) report that flagged Nigeria’s economic outlook as highly uncertain.
He emphasized that while reforms are necessary, they must be carefully sequenced and intelligently executed.
On the question of cutting government expenditure, Rewane dismissed the idea of across-the-board austerity, offering a metaphor to illustrate his point: “Telling Nigeria to slash spending at a time like this is like asking a man with ulcers to go on a fasting retreat.”
Instead, he advocated for expenditure optimization, warning that poor spending habits—especially at state and federal levels—continue to act as negative investment multipliers.
“There are major leakages in the system,” he said, “but that doesn’t mean we should spend recklessly. It’s about spending wisely, not extravagantly.”
Rewane supported recent reforms introduced by President Bola Tinubu, including fuel subsidy removal and exchange rate adjustments, but argued these actions are only part of the puzzle.
“We can’t keep looking in the rearview mirror. What worked in 2023 might be outdated by 2025,” he said.
Security, especially in oil-producing areas, remains a pressing issue, according to Rewane. He warned that unless insecurity is curbed, oil production—the backbone of Nigeria’s revenue—will continue to suffer.
On inflation, Rewane projected a moderate rise to 25–27%, challenging the IMF’s more dire forecasts of 30% by 2025 and 37% by 2026. He noted that persistent liquidity in the economy could force the Central Bank of Nigeria to hold or even raise interest rates to keep inflation in check.
He also criticized the Debt Management Office (DMO) for reducing bond issuance from ₦1.8 trillion in Q1 to ₦1.2 trillion in Q2, arguing that such a move undermines efforts to curb excess liquidity. “Mopping up liquidity is painful but necessary. Cutting back on bonds sends the wrong signal,” he warned.
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Rewane expressed concern over Nigeria’s undervalued oil exports, revealing that while neighbouring countries sell crude for $1.20, Nigeria gets only 70 cents per unit. “That gap is unsustainable,” he remarked.
While he lauded the Dangote Refinery for helping bring down domestic fuel prices, he flagged potential risks tied to OPEC’s planned output increase, which could further depress global oil prices.
On international trends, Rewane commented on former U.S. President Donald Trump’s hint at reducing tariffs on China, suggesting it might ease some global economic pressure—but uncertainty would remain.
Looking ahead, he predicted relative stability between May and June, adding that any global recession anticipated by the IMF is likely to be mild rather than severe.
“This is not the time for business as usual,” Rewane concluded. “Nigeria must tackle fiscal leakages, embrace responsible borrowing, and consolidate its finances. These are serious times, and they require serious actions.”
