This article draws insights from the July 2, 2025, Lagos Business School Breakfast session presentation by the renowned Bismarck Rewane. The global financial architecture is experiencing a profound recalibration in 2025, one that presents Nigeria with an unprecedented confluence of opportunities amidst widespread market turbulence. As traditional monetary hegemonies weaken and new trade corridors emerge, Nigeria finds itself uniquely positioned to capitalise on these shifting dynamics, provided its policymakers demonstrate the requisite strategic acumen.
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The great dollar devaluation and its ramifications
The most striking feature of 2025’s financial landscape has been the systematic weakening of the U.S. dollar, which has declined 11.09 percent year-to-date to reach a decade-low of 96.83 on the Dollar Index. This decline appears deliberate rather than accidental, particularly as Federal Reserve Chair Jerome Powell signals openness to rate cuts as early as July. The implications of this monetary pivot extend far beyond American shores, creating ripple effects that astute emerging market economies can exploit. Simultaneously, equity markets have embraced this volatility with surprising enthusiasm. The S&P 500 has surged to an all-time high of 6,215.08 points, representing a remarkable 13.6 percent gain year-to-date. This seemingly paradoxical combination of dollar weakness and equity strength reflects a fundamental shift in investor psychology, where traditional safe-haven assets give way to risk-on positioning. The recent “golden cross” formation in early July suggests this momentum may persist, as historical patterns indicate gains above 10 percent typically portend further upside. Gold’s spectacular rally to $3,349 per ounce reinforces this narrative of dollar scepticism, while oil’s volatility from $81 to $67 per barrel serves as a stark reminder of the fragility inherent in commodity-driven economies. For Nigeria, these cross-currents present both opportunity and peril.
Nigeria’s strategic advantage in a multipolar world
The weakening dollar has created what appears to be a mirage of naira strength, with the currency stabilising at ₦1,529 per dollar officially and ₦1,558 in parallel markets. This convergence, narrowing the gap to merely ₦29, represents more than statistical improvement; it signals a fundamental shift in Nigeria’s external balance dynamics. The improved foreign exchange liquidity underpinning this stability provides a foundation for broader economic transformation. Moody’s recent upgrade of Nigeria’s sovereign rating to ‘B3’ with a stable outlook creates a crucial financing window. The confluence of global rate cuts, dollar weakness, and improved creditworthiness positions Nigeria to raise $3-4 billion in project-specific debt at historically attractive terms. This opportunity, however, demands swift action before global monetary conditions inevitably tighten. Perhaps more significantly, China’s strategic elimination of tariffs for African goods under the Forum on China-Africa Cooperation represents a seismic shift in global trade architecture. With China-Africa trade reaching $296 billion in 2024, up 5 percent year-over-year, Nigerian exporters and manufacturers sourcing inputs from China stand to benefit substantially. This development transcends mere trade facilitation; it represents a fundamental realignment of global supply chains that could permanently alter Nigeria’s competitive position.
The domestic transformation imperative
While external conditions create opportunity, Nigeria’s domestic economic fundamentals demand urgent attention. The encouraging decline in inflation to 22.97 percent in May, alongside money supply growth moderating to 19.9 percent, provides monetary authorities with crucial breathing room. However, the shadow of escalating public debt, which climbed to ₦149.39 trillion in Q1 2025, looms large over fiscal sustainability. The banking sector’s current recalibration, marked by the Central Bank of Nigeria’s suspension of dividends and executive bonuses for institutions under forbearance, reflects necessary prudential adjustments. Despite these measures, interbank liquidity remains robust at ₦813 billion, suggesting underlying financial system resilience. The maintenance of positive liquidity conditions while implementing corrective measures demonstrates sophisticated crisis management. Nigeria’s Q1 2025 trade surplus of $3.4 billion, representing a 16.8 percent year-over-year increase, offers fiscal respite despite persistent deficits. With oil prices stabilising around $67 per barrel, this surplus reflects improved export performance rather than merely favourable commodity prices. The challenge lies in sustaining this momentum while diversifying the export base beyond hydrocarbons.
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“With oil prices stabilising around $67 per barrel, this surplus reflects improved export performance rather than merely favourable commodity prices. The challenge lies in sustaining this momentum while diversifying the export base beyond hydrocarbons.”
The technology revolution and market dynamics
The global equity rally finds its most dramatic expression in Nvidia’s meteoric rise toward a $4 trillion valuation, briefly eclipsing Apple’s historic peak. This AI-fuelled ascent, with shares gaining over 11.6 percent and now representing nearly 7 percent of the S&P 500, illustrates how technological disruption drives market valuations. For Nigeria, this trend underscores the imperative of embracing digital transformation across all economic sectors. The synchronous rally in equities and dollar weakness reflects sophisticated investor behaviour. A weak dollar inflates the dollar value of overseas earnings while prompting asset rotation into resurgent risk assets. Gold’s recent retreat from peak levels reinforces this dynamic, as investors increasingly favour growth assets over traditional hedges. Nigeria’s challenge lies in positioning itself as a compelling destination for this reallocated capital.
Navigating the structural transformation
The convergence of these global trends creates a unique inflection point for Nigeria’s economic trajectory. The combination of dollar weakness, Chinese trade liberalisation, improved sovereign ratings, and domestic monetary stability provides a foundation for sustainable growth. However, realising this potential requires strategic policy coordination across multiple fronts. The new tax legislation must balance revenue generation with growth stimulation, avoiding the trap of stifling economic dynamism in pursuit of fiscal consolidation. The domestication of external debt reduces translation risks while preserving fiscal space for strategic investments. These technical improvements, while seemingly mundane, constitute the infrastructure of sustained economic transformation. More fundamentally, Nigeria must leverage this period of global dollar weakness and China-Africa trade expansion to accelerate structural diversification. The traditional reliance on oil exports, while still important, cannot constitute the foundation of a modern economy. The current external environment provides unprecedented opportunities for manufacturing expansion, agricultural modernisation, and service sector development.
The path forward: Policy imperatives
Success in navigating these global currents demands disciplined execution across multiple policy dimensions. Fiscal discipline must coexist with strategic investment in infrastructure, particularly in power generation and logistics networks. Foreign exchange stability requires not just technical management but fundamental improvements in export competitiveness and import substitution. The anticipated $3-4 billion in international borrowing over the next twelve months must target productivity-enhancing investments rather than consumption financing. Project-specific debt structures aligned with revenue-generating infrastructure create sustainable debt dynamics while avoiding the trap of unsustainable fiscal expansion. Export promotion strategies must capitalise on China’s tariff concessions while developing competitive advantages in manufacturing and agriculture. The reduction in input costs from Chinese suppliers creates opportunities for Nigerian manufacturers to achieve scale economies previously constrained by high production costs.
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Conclusion: Seizing the moment
Nigeria stands at a crossroads where global monetary realignment, technological disruption, and geopolitical shifts converge to create unprecedented opportunities. The weakening dollar, resurgent equity markets, and Chinese trade liberalisation provide external tailwinds that could accelerate domestic transformation. However, these opportunities exist within a narrow window that demands immediate and coordinated policy action. The test of Nigeria’s economic leadership lies not in recognising these opportunities but in executing the complex policy coordination required to capitalise on them. Success demands moving beyond traditional reactive management toward proactive strategic positioning that leverages global trends for sustainable domestic transformation. The world is indeed in flux, but for Nigeria, this represents not chaos but opportunity. The challenge now is to demonstrate the policy sophistication and implementation capacity necessary to transform external volatility into enduring economic advancement. The stakes could not be higher, but neither could the potential rewards for bold, strategic action.
Dr. Oluyemi Adeosun, Chief Economist, BusinessDay Media
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