Economic Growth: Bismarck Rewane Breaks Down Nigeria’s Q1 2026 GDP Figures

Added: 2026-05-31

[00:00:00]in green.

[00:00:02]When our jurors economy posted a modest but on even recovery in the first quarter of 2026 with fresh data sparkling both optimism and concerns over the country's fragile growth structure. Well, according to uh reactions and CPPE just reacting to all of this in its a policy uh reaction in latest National Bureau of Statistics UDP report. Major players in the business community say the 3.89% year year growth reflects cautious optimism, but the one that deep structural weaknesses continue to threaten long-term economic stability.

[00:00:38]While slightly below the 4% recorded in Q4 of 2025, experts say that the slowdown was expected due to seasonal factors and um other issues uh concerning uh the crude the market.

[00:01:22]Um moving on now, the services sector regained uh recorded a a rate of about um 57 point But, let's let's let's just get to our conversation uh this afternoon as we see what's been happening with Nigeria's economy and with regards to the uh Q1 2026 uh figures. That's from the NBS. That's talking about the GDP. Yes, I was telling you that the services sector dominated output contributing 57.93% to GDP expanding by 4.31% with strong performances from ICT, financial services, trade, entertainment, and construction. Now, we have stayed on this topic for some time, but today we have Mr. Bismarck Rewane, who is the managing director and chief executive officer of Financial Derivatives Company Limited. He joins me to make more sense of these figures as released by the NBS.

[00:02:17]So, Rewane, thank you so much for joining us on the show.

[00:02:21]>> Thank you for having me.

[00:02:23]>> Yeah.

[00:02:24]Do you want us to get talking? Nigeria recorded a GDP growth rate of a 3.89% that's in Q1, well, which is a positive signal. As someone who assesses economic performance closely, how would you rate the overall health of the Nigerian economy beyond that headline figure?

[00:02:45]>> Now, firstly, I want to point out something very clearly.

[00:02:49]3.89 for the first quarter is actually the highest uh Q1 growth in the last 5 years. So, it is to a large extent a record. It is lower than Q4, but typically, Q4 is always one of the highest uh growth quarters, and Q1 is usually the one of the slowest growth quarters.

[00:03:10]So, compared to the historical trend, uh it is higher than the uh higher than the rates uh achieved in last 5 years. Now, the question is, let us step back a little bit and ask ourselves, what is it that we aspire to do? We are aspiring to achieve a $1 trillion economy over the next 4 to 5 years. That is quite an aspiration, and it's quite it's a somewhat wild ambition, but the reality is that we are not going to get that if you do not achieve maybe 12 to 14% compounded growth for the next 4 years.

[00:03:46]So, I am not going to uh live in a world of wishful thinking, but the reality is that let us compare it 3.89 first quarter.

[00:03:58]Obviously, all things being equal, we'll probably achieve about 4.2 or 4.3% for this year.

[00:04:04]Compared to previous years, this is a record. Compared to our rate of rate of growth of population, it is really interesting. And now, you have to ask yourself the sectors that are pulling the economy, the ones with the strongest linkages. What we have seen is that we've seen oil refinery increase. And of course, there's no miracle. We know that the Dangote refinery is pulling that along. We've seen oil production slightly higher because it's at about 2.04% because of higher production and less militancy in the Niger Delta.

[00:04:37]We've seen telecos grow by about over over 12%.

[00:04:42]We've seen insurance growing quite rapidly. And so, so to speak, the economy is on a good stead in terms of the areas. But, the troubling thing is that air transportation down. We've seen a reduction in uh there's a slowing slowing in trade.

[00:05:03]We've seen I said earlier on that insurance has moved pretty fast.

[00:05:08]But, we we we have not seen a notable growth rate in agriculture because what we are what is very troubling is that we've seen a massive growth in the activities of fertilizer. But, we are not seeing a corresponding growth in agricultural output. So, all things being equal, at 3.89% higher than the past 5 years, if if we continue at this pace, I think that all things being equal at the end of the year, we should be at about 4.2 4.3. Compared to last year, it's a record.

[00:05:40]But, also compared to aspirations, there's a lot more work to be done. What are the areas that we need to address urgently.

[00:05:48]Power power supply. I think there's a new minister of power. There's a some forbearance. The president has announced some forbearance in power budget. We have to do something really dramatic to get us from the roughly 4, 5,000 megawatts uh 5,000 megawatts uh from the grid to something substantially higher. Let us say for sake of argument, if we could do say uh if we could do 7 or 8,000 megawatts if we can have some new investment in the power sector then you begin to see that relationship where you have a 8,000 megawatts increase leads to almost a 0.25 to 0.5% increase in GDP. That is significant. But we there's we are not going anywhere unless we do something about power. Secondly we need to uh again encourage some more investment in the power downstream value chain. I think that that's being done. Um the federal government and um the federal government NNPC and Dangote are coming to some terms to ensure that we can get more investment. And if you read the S&P's review which upgraded Nigeria and the Economic Intelligence Unit, it's quite clear that the refining sector is a major major boost to economic activity. I think that is what is what is dramatic there. Um so generally speaking uh growth is on a even keel. Uh some major developments have to take place especially in the power supply area. We have to see something in the construction and we have to see some things in the transportation area. But generally speaking uh one would consider the economy is outperforming most of sub-Saharan Africa.

[00:07:42]And it's outperforming in certain areas Um I think compared to the global economy.

[00:07:47]>> All right, you took that from because I was to ask about the right sectors that we really need to, you know, reignite to inflict our economy. But let's take this commercial break and when we come back the conversation continues. We'll be right back.

[00:08:00]All right, thank you so much for staying with us and we still have Mr. Bismarck Rewane, managing director and CEO of a financial derivatives company uh limited live with us. Now, Mr. Rewane, the exchange rate and inflation uh figures have remained significant concerns of course for businesses and households.

[00:08:18]Now, in your assessment, is the current monetary policy direction helping or creating new pressure points for the economy?

[00:08:28]>> No, I think the monetary policy direction of the country is valid. It's It's also a strong point. Let's face it.

[00:08:36]You are seeing an exchange rate that has stayed between 1375 and 1400 1410 in the parallel market. And this has stayed essentially flat for the last 12 months.

[00:08:51]As a matter of fact, against the official market, the currency has actually appreciated. And the exchange rate is a major uh catalyst for inflation. So, if you maintain exchange rate stability, which which is what has happened, as a matter of fact, appreciating it, you have actually helped to create a level of disinflation. In other words, making inflation uh actually decline.

[00:09:18]But you One other thing you must bear in mind is that the what the Central Bank has done essentially is to maintain a tight monetary stance.

[00:09:26]Just imagine if we had If we had lowered interest rates in on February 23rd by two or 300 basis points at that time, what would have happened? Five days later, there was a war in Iran which nobody anticipated was going to happen.

[00:09:39]So, by being prudent and by being cautious, the Central Bank has been able to stay, you know, steady ship quite clearly. And the other thing you must bear in mind is that there's been bank recapitalization and very strict rules on stress testing, which means that the banks are not able to pay out dividends uh except they have met made it financial guidelines as stated by the Central Bank. So, from a monetary policy perspective, exchange rate management, interest rate stance, and real bank recapitalization, one can say that Nigeria and has done very well and that is what why Standard & Poor's actually gave us an upgrade and said the outlook is stable.

[00:10:20]And in that Standard & Poor's Standard & Poor's report, they also made reference serious reference to the impact of the Dangote Refinery in terms of main maintenance stability, productivity, and also efficiency in the economy. So, generally speaking, those are the key areas that we must deal with. But, having said that, we have to go back to inflation.

[00:10:43]Inflation is currently at about 15.6% but we think that it probably increase marginally to about 15.9 next month because of seasonality and because of certain, you know, insecurity problems across the country. But, having said that, you have to bear in mind that we had come down to about 13, 14 and then we just got back up. But, the entire world in the United States, for example, the PCE came out today, which has shown that you you find the the last inflation numbers were 3.8 and we are likely to see inflation in the US increase again to at least 4%. Having said Once you bear that in mind, it is now clear that if Federal Reserve Bank on 16th of June is not likely to bring down rates. If anything, there is a probably probability that there will be a a 25 basis point increase, but I doubt that that will happen. It will be to be a quite a contentious meeting. So, all eyes on the ball. We've seen inflation increase in South Africa. We've seen inflation marginally increase in um I think Angola.

[00:11:58]So, what what is driving this? It is the energy cost. The cost of energy, the cost of gas, and the cost of logistics, which has increased, generally speaking.

[00:12:08]But in Nigeria, let's take it down to what has happened. We've seen the price of rams increase to as much as 1.5 million naira for a big one. We've seen the price of cows go up from um almost 2 to 3 million naira for a big cow.

[00:12:23]We've seen uh recent in recent days, we've seen tomatoes, um garri, and uh pepper all all increasing prices, and beans. Why? Because people are This is more related to the holiday that just that just taken place. But after the seasonality, uh that is by Monday, Tuesday, we'll begin to see some downtrending. But luckily, we all just announced it now that uh Brent is at about $92 a a barrel.

[00:12:51]The projections before was that it had got up to 105, 108, 115. Now, this is a big drop.

[00:12:58]Assuming that uh all things go equal, because we never know what's going to happen in Iran. But if all things go steadily, at $90 a barrel, or probably $85 a barrel, we would we should see immediately we should see a reduction in the price of diesel in Nigeria, the price of petrol, the price of aviation fuel, and the price of dual purpose kerosene.

[00:13:20]So, if those things happen, let us assume that the price of petrol, PMS, goes from 1,350 or 380 to to about 1,200 in the next 2 to 3 weeks.

[00:13:32]That is a major impetus to bring down inflation and take part of the pressure pressure of people there. The ordinary man is actually under a lot of pressure because wages have stayed stagnant if anything reduced. And prices have increased.

[00:13:49]Therefore, people are under under tremendous pricing pressure. Not only here, not only in Nigeria but in Nigeria because our economy was on on a fragile path. It It The impact is being felt quite strongly at this point in time.

[00:14:07]>> Well, again, Nigeria's growth story many would say have struggled to translate into job creation at the scale the population requires. Now, let me ask you, Mr. Rewane, what structural changes do you believe are most urgent to make growth more employment intensive, inclusive kind of growth?

[00:14:28]>> Okay, I I started this discussion today about the importance of power.

[00:14:32]>> Yeah.

[00:14:33]>> Uh you cannot grow an economy of this magnitude 300 maybe 280 260 billion dollar economy.

[00:14:43]Right? With 4 to 5,000 megawatts of public power supply. You need to do something dramatic.

[00:14:50]And why do I say that? Power supply to the small and medium-scale enterprises um they are about almost 4 to 5 million small and medium-scale enterprises in across the country if not more than that.

[00:15:04]An increase in power supply of of 1 to 2,000 megawatts can transform that sector. And they have massive linkages with the others. So, take take the vulcanizers, the plumbers, the the electricians, the you know, all of them, you know, so you know They These are sectors and small scale medium enterprises that depend on power.

[00:15:29]If they do not have to spend on petrol or diesel and maintain their generators, and they just depend on public power supply, you it means a lot. Let us take the baking industry where people you have local bread and they get bread. All of these guys are spending 1,900 naira on diesel rate.

[00:15:51]Almost 80% higher than what they were spending last year.

[00:15:55]You cannot expect them to sell their bread, their spaghetti, their chin chin and all that at the same price as which they sold it last year.

[00:16:03]So, that is why when you when you now have power supply and you bring down their cost, they cannot transfer the benefits to the public by lower prices and get people higher productivity. So, that is key. And so, to me power supply is structural. To me, fertilizer is structural. And then, to me, the the whole idea of having tractors So, it's actually revolutionizing agricultural output is a major thing.

[00:16:35]So, we Let us take it one after the other. Power supply improves the output from small and medium scale enterprises. Fertilizer supply increases the productivity and the yield per hectare. And then, when you have that power supply also improves the storage of of goods cuz we lose about 40% of our post-harvest losses due to poor storage.

[00:17:01]So, if we take these things one after the other, then the linkage effect is tremendous. We've already We've already told you now that we could have had queues >> Yes.

[00:17:13]>> February, but we don't have queues because the refineries are working. We could have had shortage of gas. But because the refineries are working and LNG is working, we are getting that output.

[00:17:24]What are the linkages that would would drive this? We need to see this in terms of manufacturing. We need to see this in terms of output from construction. We need to see this in terms of even the service sector and making sure and you've seen that already. We've seen telcos grow at over 12 to 15%. We've seen the revenues of major leading you know leading players like MTN and Airtel and going through the roof. And we've we have we are seeing the stock market itself at about 1.15 about 160 trillion naira in market capitalization. This is even before the listing >> Yeah.

[00:18:04]>> of the IPO of the Dangote Cement and other other new listings that were expected soon. So, generally speaking, there's some some light at the end of the tunnel, but there's still a lot of work to be done.

[00:18:20]A lot more work to be done than just resting on our oars.

[00:18:25]>> All right now, before I let you go now, foreign investors often look at stability and policy consistency before committing capital. Uh Mr. Rewane, how would you assess Nigeria's investment climate? We know the president has been the forefront of it, you know, pushing uh for investments. And what do you think would take to significantly improve it?

[00:18:46]>> Well, the first thing is that some some stability and certainty and predictability because you have the predictables and the imponderables.

[00:18:55]Foreign direct investments are looking at the long-term trajectory of growth and the long-term stability of policy.

[00:19:02]They do not want any disruption. So, let's be clear about that.

[00:19:06]Uh you know, we got an upgrade from S&P's.

[00:19:11]But the upgrade we are still junk and junk status. You know, we are not investment grade, but we have improved. Outlook is stable.

[00:19:20]Outlook is promising.

[00:19:22]But we now need to do something much more fundamental. Only three countries in Africa have investment grade status, Mauritius, Botswana, and Morocco.

[00:19:32]We have We have about four or five steps below investment grade. We need to do things and make it very clear, trans- transparent, accountability, and we need to do something about the perception of corruption in the country.

[00:19:49]Uh whether we like it or not, Transparency International does not rank us very highly.

[00:19:54]There are still the There are leakages in system.

[00:19:57]Ob- obviously, work needs to be done in terms of to not only to be seen to be clean, but also to appear to be clean, and to be clean itself. So, that is a major major responsibility of the government.

[00:20:16]>> All right.

[00:20:16]>> And our judicial system, dispute dispute resolution in Nigeria, is a major issue because people feel threatened. When you have agreements with people, they always say arbitration will be in in the UK or in Switzerland.

[00:20:32]Uh you know, they try to incorporate their special purpose vehicles in Mauritius because people do not have a lot of confidence in our judicial system for um for resolution of of uh disputes. So, one, dispute resolution options. Two, blocking the leakages.

[00:20:54]And three, appearing not only appearing, but actually being transparent in those transactions. When you Once you do this, then you begin to see foreign direct investment, not foreign portfolio investments, but foreign direct investments actually begin to grow. And today, foreign direct investment foreign investments are about almost 18% 18 to 20% of GDP. With we see this growing up growing sharply and increasing sharply to more than that. We increase our investment to more than 30 or 40% of GDP. So while consumption we have about will be about 58%. The investments will will be about almost 30 or 40% and net export net exports will help us while the government government contribution to GDP will reduce.

[00:21:49]Hopefully with the efficient tax collection in the system we should begin to see some interesting developments as far as structural removal of structural impediments to growth in the country. Definitely 2027 to 2028 will be very interesting years after the elections and we'll see some stability and clarity as to what will happen.

[00:22:15]>> Mr. Bismarck Rewane, MDC of Financial Derivatives Company Limited. Thank you so much for your time on the show today.

[00:22:22]We really appreciate this.

[00:22:24]>> Thank you for having me.

[00:22:25]>> All right then.

[00:22:28]All right. Well, let's take a break and we'll