Bismarck Rewane, Managing Director and Chief Executive Officer of Financial Derivatives Company Limited has projected that the Nigerian economy will grow by 3.5% by 2026, pushing the country’s Gross Domestic Product (GDP) to approximately $400 billion. Rewane made this disclosure at the Access Bank Customer Forum held in Lagos on Thursday.
“The Nigerian economy will grow at 3.5% (approximately $400 billion). Nigeria is on track to becoming the second-largest economy in sub-Saharan Africa,” Rewane stated. He also predicted improvements in Nigeria’s foreign exchange market, expecting a more efficient forex auction system and unencumbered foreign reserves to reach $20 billion.
Rewane also forecasted a decline in inflation to 22% by 2026, alongside a reduction in the monetary policy rate (MPR) to 20% annually, which he said would help reduce the level of bad loans in the banking sector. “We will see inflation drop to 22%, and the MPR is likely to come down to 20%, which will reduce bad loans,” he explained.
However, Rewane warned of continued pressure on the naira, projecting that it could trade at N1,550 to the dollar in the parallel market. He cited intervention funds, diaspora remittances, and exchange rate policies as critical factors influencing the currency’s stability. “These gains are driven by intervention funds, remittances, and adjustments to exchange rate policies,” he noted.
Rewane also highlighted an expected rise in total factor productivity to 2.6% by 2026, up from 2.4% in 2024, and predicted that the country’s trade balance would increase to $9.3 billion from $8.42 billion. Additionally, he forecasted that the price of petrol would stabilize at N900 per liter, driven by increased production from the Dangote refinery and modular refineries.
The Nigerian stock market is also set to see significant growth, with market capitalization projected to rise to N58 trillion, buoyed by the listing of major companies such as Dangote Refinery and Nigerian National Petroleum Corporation. Rewane also painted a challenging picture for commodity prices, forecasting that a basket of tomatoes would cost N20,000, a bag of rice would sell for N75,000, and a bag of beans would reach N110,000 by 2026.
Despite these positive economic indicators, Rewane stressed that inflation remains a major challenge for Nigerian companies, impacting their operating margins.
Government Officials Comment on Economic Outlook
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, also weighed in on the state of Nigeria’s economy, highlighting the improvement in foreign reserves. He noted that the country had seen a net inflow of about $2.35 billion monthly into the Central Bank’s coffers in the first seven months of the year, helping to stabilize the naira in the forex market.
“There has been a net inflow in the first seven months of this year of about $2.35 billion every month,” Edun said. He emphasized that these inflows had bolstered foreign exchange liquidity and contributed to a rise in gross reserves. Edun also highlighted the growth in government revenues, attributing this to the government’s fiscal policies.
Edun further underscored the need for increased infrastructure spending and social safety nets, noting that Nigeria’s tax-to-GDP ratio stands at 10%, with revenue to GDP at 15%.
Contrasting Projections from Taiwo Oyedele
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, expressed skepticism over the optimistic economic projections presented by Rewane. “Our projection is slow, and I do not pray that Bismarck’s projection comes to pass,” Oyedele said, citing concerns over divestment, poor education, and rising unemployment.
Oyedele emphasized the need for data-driven decision-making to address Nigeria’s economic challenges and mentioned that the Federal Government is looking to reduce the corporate income tax burden while prioritizing efficiency in tax collection to boost revenues.
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