- Projects that MPC will cut rates in November, and the Naira will be stable
The team of economists at the Financial Derivatives Company Limited have noticed that, after several quarters of negative news, data volatility, and conflicting trends, the Nigerian economy appears to be entering a steady state of recovery and credible expansion.
Nigerians cannot be blamed for taking positive economic data with a pinch of salt. Over the years, they have been victims of sycophantic soundbites and subjective analysis.
The NBS has recently released the following:
– A 4.23% real GDP growth for Q2’25, higher than the SSA average,
– A fifth consecutive decline in headline inflation to 20.12%,
– A consistent rise in gross external reserves to $43bn, and
– A 3.7% appreciation of the naira from ₦1,541/$ to ₦1,484/$ in September 2025.
“At FDC, we subjected the data to both empirical and anecdotal tests. The overwhelming views of investors and analysts were that the data was mostly genuine and that the trend was consistent with regional and global patterns. Data integrity notwithstanding, the consensus was that the recovery was slow but sustainable.
As we go into the world of data integrity, we should be reminded of the words of Thomas Carlyle – “Teach a parrot the terms supply and demand, and you have got an economist.”
Fall in oil price to $60pb could be a spoiler
The major downside risk identified was a possible decline in the price of oil. This probability became more pronounced with the ceasefire in the Israeli–Gaza conflict and the de-escalation of global risks in the Gulf. Nigeria’s recovery remains vulnerable to a fall in oil prices because every $1 decline in the price of oil increases inflation risk by 0.018% and the exchange rate by a factor of 0.12%.
Apart from the precipitous drop in oil prices, which has softened to $64pb from $67pb. Another fly in the ointment is the 50% drop in cocoa prices from $12,900mmt to $6,000mmt. As a result, Q4’25 could be a challenging quarter for Nigeria. Q4 is the period for the main cocoa harvest.
Nigeria’s Economic Outlook – Q4’25
All these point to the fact that it is too early to celebrate an economic uhuru. There is still work to be done, even though there are flickers at the end of the tunnel.
Creative industry is a game changer
Nigeria’s creative industry continues to outperform the broader economy, growing 7.64% in Q2 2025 against the national GDP of 4.23%. Bolstered by global demand for Nollywood and Afrobeats, the sector’s expansion has been underpinned by digital adoption, rising private investment, and the post-COVID rebound in entertainment. As “Detty December” approaches, event-driven spending is expected to stimulate ancillary sectors, including retail, hospitality, and food services.
MPC will cut rates in November and Naira will be stable
The MPC is expected to deliver a 25bps rate cut to 26.75%p.a, easing financing conditions for the private sector. Inflation is projected to fall towards 18% by November, while the naira is likely to stabilise between ₦1,450–₦1,550/$. The upcoming Eurobond issuance is expected to bolster external reserves, and Q3 earnings are anticipated to reveal sharp performance gaps between dominant firms and fringe players, favouring, FMCGs, and telcos.
Nigeria’s recovery appears increasingly tangible, rooted in fiscal consolidation, declining inflation, and sectoral resilience. The coming months will test whether the optimism in markets can translate into enduring macroeconomic strength.