Reforms: Nigeria must optimise expenditure to enhance investments, economic stability –Rewane

*Bismarck Rewane, CEO of Financial Derivatives Company Limited, acknowledges President Bola Ahmed Tinubu administration’s reforms are necessary but insufficient, stating ‘these measures alone are inadequate for achieving economic stability’

Isola Moses | ConsumerConnect

Experts have cautioned the Nigerian Government, that exemption from spending cuts does not mean “free spending” for both the Federal and state levels.

ConsumerConnect reports Mr. Bismarck Rewane,  Chief Executive Officer (CEO) of the Financial Derivatives Company (FDC) Limited, has emphasised the need for Nigeria to adopt a pragmatic and balanced approach to managing its fragile economy.

 

Mr. Bismarck Rewane,  CEO of Financial Derivatives Company Limited

Rewane, who stated this while speaking on a Channels TV programme aired, and monitored Wednesday, April 23, 2025, in Lagos, cautioned against drastic expenditure cuts, highlighting the importance of security, investment, and inflation control in the economy.

He made the remarks in regard to the International Monetary Fund’s (IMF), which suggested the country’s economic outlook is marked by significant uncertainty.

On possible cuts government spending in Nigeria, Rewane drew a vivid analogy, as he stressed that cutting expenditure is not the same as optimising it.

He also explained: “The IMF is advising that we optimise expenditure, as there are numerous leakages at both state and Federal levels, which act as a negative investment multiplier.

“But to ask us to cut our expenditure at a time when we need to invest more is like asking a man with an ulcer to go on a fasting mission.”

He, nonetheless, warned that exemption from spending cuts does not mean free spending for the government at both Federal and state levels in the West African country.

Rewane averred: “We must optimise expenditure, not spend like drunken sailors.”

‘Tinubu’s reforms necessary but insufficient’

Referencing the current administration’s far-reaching economic measures, Rewane acknowledged the necessity of President Tinubu’s reforms, such as the removal of fuel subsidies and currency realignment.

The expert, however, stressed that these measures alone are inadequate for achieving economic stability

He further stated: “We must stop looking backwards.

“What was appropriate in 2023 may not suffice for 2025.”

The CEO of Financial Derivatives Company noted the challenges posed by insecurity in oil-producing region in the Niger Delta, which he said had continued to hinder Nigeria’s economic recovery.

According to him, without resolving these cogent security issues in the region, oil production—a key revenue source—will remain underwhelming.

Measures to address inflation, fiscal challenges

Commenting on tackling the current high inflation in the Nigerian economy, Rewane expressed cautious optimism, predicting a modest rise to 25–27 percent, contrary to the IMF’s projection of 30 percent for 2025 and 37 percent 2026.

He equally observed the continued liquidity in the system might force the Central Bank of Nigeria (CBN) to maintain or increase interest rates to manage inflation expectations in the country.

Rewane criticised the Debt Management Office (DMO) for reducing bond issuance from N1.8 trillion in the First Quarter (Q1) of the year to N1.2 trillion in the second quarter, calling it a step in the wrong direction.

Rewane asserted: “Increased bond issuance is key to mopping up liquidity and controlling inflation.

“This is one of the painful choices we make to control inflation.”

Downstream petroleum sector, OPEC and crude prices

Commenting on the downstream petroleum sector, the analyst as well raised concerns about Nigeria’s undervalued crude oil exports.

“We sell for 70 Cents, while our neighbours get $1.20. How long can this go on?” He quipped.

Rewane applauded the Dangote Petroleum Refinery and Petrochemicals for reducing local fuel prices for energy consumers.

He, however, warned that plans by the Organisation of Petroleum Exporting Countries (OPEC) to increase crude production output could further depress oil prices in the international market.

He predicted greater stability between May and June this year, hinting that any recession as projected by the IMF would likely be mild and not deep.

The company executive said: “I don’t believe the world can live with unexpected gyrations.

“Yes, a recession may come, but it will be mild, not deep,” he said.

According to him, there is a need for Nigeria to fill its fiscal gap through borrowing, reducing leakages, and fiscal consolidation.

Rewane added: “These are serious times, and we must respond with serious adjustments.”

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