In a recent economic outlook, Bismarck Rewane, economist and CEO of Financial Derivatives Company Limited, forecasted a possible increase in Nigeria’s petrol price to N1,200 per litre and a Naira exchange rate of N1,550 per dollar by early 2025. During a session at Lagos Business School titled “Democracy on Trial! Trump – Going Back to the Future,” Rewane outlined key economic indicators, predicting Brent crude prices at $70 per barrel by December and inflation climbing to 34%.
Rewane attributed the projected petrol price rise to global oil prices and distribution logistics, suggesting that higher fuel costs could help reduce smuggling and increase foreign exchange revenue from official fuel exports. He also emphasized that while the Dangote Refinery promises stable supply, it operates on a cost-plus model, meaning prices would reflect operational expenses and global crude trends.
The economist noted that the recent jump in petrol prices from N600 to N1,030 per litre has already reduced traffic in Lagos by 25%, citing data from a vehicular report on Victoria Island’s Adeola Odeku street. He further highlighted the Naira’s significant undervaluation, pegging its fair value at N1,090.24 per dollar and predicting a strengthening by early 2025, driven by reforms in exchange rate mechanisms.
Rewane underscored that exchange rates heavily influence Nigeria’s inflation rate, and a partial Naira recovery could ease inflationary pressures. The upcoming inflation data release for October may influence the Central Bank’s future policies, though current high-interest rates are expected to remain in place until 2025.
He concluded that challenges remain, with corporate losses from foreign exchange impacts totaling N2 trillion for major companies. Operational inefficiencies, increased maintenance costs, and rising debt servicing expenses due to depreciated fixed assets also continue to affect Nigerian businesses.
