*Says reform fatigue undermining Nigeria’s economic performance 

*Declares rebased GDP numbers of $243bn not flattering 

*Nigeria’s external reserves now $39.99bn

Nume Ekeghe and Dike Onwuamaeze

The Chief Executive Officer (CEO) of Financial Derivative Company Limited (FDC), Mr. Bismarck Rewane, has warned that Nigerians were getting restive and uncomfortable with the unintended consequences of the federal government’s reforms.

He also stated that Nigeria’s growth was being slowed down by “reform fatigue,” a situation where people and businesses are tired of constant changes in government policies.
This emerged as checks by THISDAY, showed that Nigeria’s foreign exchange reserves increased to $39.99 billion as at August 6, 2025, marking a 9.9 per cent increase from the $36.39 billion recorded on same date in 2024, according to the Central Bank of Nigeria’s (CBN) data.

Rewane stated his view in a presentation he made at the Lagos Business School’s (LBS) monthly breakfast session for August, titled “Two Years After: Reform Fatigue and Ideological Backsliding Sets in …,” a copy of which was made available to THISDAY yesterday.

Since taking office in May 2023, President Bola Tinubu has rolled out sweeping economic measures, including the removal of fuel subsidies, which led to a sharp rise in petrol prices. He also unified the foreign exchange market, allowing the naira to float freely, a move that triggered significant currency depreciation. In addition, his administration introduced fiscal and tax reforms aimed at boosting revenue, but these have added pressure on households and businesses already struggling with high inflation.

Rewane argued that while reforms are meant to improve things, too many shifts without quick or clear results could make citizens and investors lose trust, leading to weaker economic performance.
He said: “Nigeria is exactly two years into the sweeping reform of 2023. The populace is getting restive and uncomfortable with the unintended consequences of the policies.
“The federal and state governments are holding the line but are showing some signs of economic backsliding.
“The most evident reversal of the reform is in the aviation sector. Nigeria has 33 airports, of which only four are viable.

“Whilst it is normal for state-owned airlines to be privatised, we are now witnessing an obsession of the state government with building new airports and establishing airlines.”  
He added that empirical evidence from similar reforms in some countries that had embarked on bold reforms, like the United Kingdom under late Prime Minister Margaret Thatcher, as well as countries like Myanmar, and Moldova in Eastern Europe, the unintended consequences of reform policies have blighted the populace.

He said: “The people bear the brunt of the policies. Typically, two years later, reform fatigue sets in. Countries usually embark on palliative distribution and other subsidies again.”
According to him, subsidy removal as part of the reform has increased government revenue and reduced citizens’ disposal income.  

Rewane noted that, “commercialisation and privatisation are key economic reform policies in Nigeria to improve efficiency and reduce the fiscal burden on the government,” in line with property rights theory that posited that private ownership leads to efficient resource allocation.
He said the key takeaways of the reform include economic indicators that have remained positive, though “the people’s pain and hardship persist,” adding that “the economy is passing through the worst of the reform-adjustment phase.”

According to Rewane, Nigeria’s new Gross Domestic Product (GDP) numbers of $243 billion are authentic, but not flattering, stating that the economic growth recorded was backed up by expanding activities.  
He further noted that inflation has been on a downtrend since March, but remained stubbornly high at 22.2 per cent in June, while “fuel costs are coming down (PMS N865/$), but growth in food prices is rising.”
He predicted that “currency volatility will ease, but the Naira will remain under pressure, owing to inflation, and low confidence in the currency.”

Stating that the new GDP numbers of $243 billion are authentic but not flattering, Rewane said that “we expect the growth in Q2 to be 3.36 per cent or higher, surpassing the growth rate in Q1.
“One of the significant growth catalysts is the oil refining sector, which is driven by massive investments and production from the Dangote Refinery.

“Oil refining contracted by 14.67 per cent in 2024 and is expected to achieve a growth rate exceeding 20 per cent. Another interesting indicator is the expectation that inflation will taper towards 20 per cent in Q4,” he added.
Meanwhile, Nigeria’s foreign exchange reserves have increased to $39.99 billion as at August 6, 2025, marking a 9.9 per cent rise from $36.39 billion on the same date in 2024.

The upward trend reflects improved foreign exchange inflows and ongoing reforms aimed at rebuilding macroeconomic confidence. Analysts forecast that the external reserves would likely continue this momentum, supported by high crude oil prices, steady remittance flows, and renewed foreign portfolio investor (FPI) interest in Nigerian assets.

Over the past year, reserve levels showed steady growth, with notable gains in late 2024 and early 2025, despite occasional pressures.
This positive trend continued in January 2025, with external reserves hitting $40.90 billion by January 5, before declining to $39.72 billion by January 31. February and March saw a slight dip to around $38.3 billion.
As of April 30, 2025, the stock was $37.93 billion, indicating stability amid oil price volatility. In May and June, reserves slowly increased again, crossing the $38.5 billion mark by June 30.

In July, growth accelerated significantly, with reserves jumping over $2 billion to close at $39.36 billion by July 30, reflecting renewed foreign investor confidence and stronger external receipts. By August 6, 2025, reserves reached $39.99 billion, marking a full-year increase of $3.6 billion.

Commenting on the outlook, Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, expressed confidence that the external reserves would remain strong in the near term.
“I think the reserves will remain healthy as the crude oil prices have remained above $70. The positive sentiment about Nigeria, coupled with the relatively high asset yields, will also continue to drive FPIs. The remittance will maintain an upward trajectory as Nigerians in diaspora continue to acquire assets in the domestic economy,” he told THISDAY.

Cordros Research, in a report stated: “The naira is likely to remain stable in the near term, supported by improving FX liquidity from domestic and foreign sources, alongside subdued demand pressures. Nonetheless, we highlight the possibility of gradual depreciation should global pressures reemerge.”
Analysts at Afrinvest Asset Management also noted the strengthening reserve position, observing that Nigeria’s external buffers had been steadily building. “Looking ahead, we expect Naira to remain range-bound in the near term, supported by relatively stable FX liquidity conditions.”

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