As 2024 draws to a close, Bismarck Rewane, a prominent Nigerian economist and CEO of the Financial Derivatives Company, has spotlighted significant global trends likely to influence the economic landscape in 2025. These trends encompass a range of economic, geopolitical, and technological shifts that will have far-reaching consequences.

With the resurgence of Donald Trump in American politics anticipated, Rewane suggests that this development could prompt a pivotal alteration in global dynamics. He posits that Trump's administration may implement tighter immigration policies, an increasingly protectionist stance on trade, and exacerbate geopolitical risks. These changes could result in heightened global tensions, disrupt established trade routes, and ignite concerns regarding nuclear proliferation. Speaking to Businessday, Rewane pointed out that this period of uncertainty could foster a sense of insecurity on the world stage.

In relation to geopolitical complexities, Rewane argues that a "broader disorder" could ensue. America’s transactional foreign policy may embolden countries such as China, Russia, Iran, and North Korea to engage in more assertive and potentially destabilising behaviours. Coupled with rising trade wars—particularly between the United States and China—the implications for international trade relationships could be severe, affecting economic growth across key markets.

The year 2025 is also projected to pose challenges for political leaders globally, as citizens will likely hold them accountable for fulfilling campaign promises. A failure to meet voter expectations may culminate in civil unrest in various regions, contributing to political instability.

In the realm of technological advancements, Rewane emphasises the imminent clean-tech revolution, largely expected to be driven by innovations from China, including advancements in solar panels and grid storage capabilities. This transition is poised to reshape energy markets and facilitate a move towards sustainable energy solutions.

Challenges also loom over Western economies, which will face the pressing task of dealing with fiscal deficits. Rewane foresees the necessity for a mixture of increased taxation, budget cuts, and initiatives aimed at promoting growth. Persisting inflationary pressures, fuelled by a variety of factors including supply chain disruptions and tightened labour markets, are likely to complicate these efforts.

Artificial intelligence (AI) emerges as another essential aspect of future developments, with global investments in AI poised to surpass $1 trillion. Focused on constructing data centres, generative AI could enhance productivity in various economies; however, its broader effects and implications remain uncertain.

In addition to these trends, the discourse surrounding age limits for political leaders is expected to intensify as a burgeoning youth population faces limited job prospects. This demographic challenge could particularly contribute to instability in regions such as the Middle East.

The intricacies of global travel may be adversely affected by ongoing conflicts and geopolitical tensions, potentially curtailing international aviation and restricting the free movement of individuals across borders.

Rewane anticipates that 2025 may also bring unexpected developments, which could range from severe solar storms to significant archaeological discoveries or even another global pandemic.

The implications of these global shifts are particularly salient for Nigeria, where the economic landscape is intricately linked to international trends. Rewane outlines several challenges, including a lag in access to emerging green technologies, which may impede Nigeria's energy transition. Additionally, the likelihood of rising tariffs and trade barriers poses a threat to the nation's oil export revenues, which are essential for foreign exchange earnings.

Market volatility might also arise from the divergence in global monetary policies and fluctuating oil prices, potentially destabilising the Naira and affecting investments and trade dynamics. Furthermore, a reduction in Chinese demand could diminish Nigeria’s export revenues, thereby aggravating economic difficulties.

Despite these obstacles, opportunities to benefit from easing global monetary policies might arise, as interest rates are expected to decrease in both advanced and emerging economies between 2025 and 2026. However, Rewane warns that elevated inflation rates may persist in the medium term due to constraints within the labour market and ongoing adjustments within supply chains.

Finally, Rewane notes that the continued conflict in the Middle East may contribute to rising Brent crude prices, but moderated demand from China could temper these effects. Given the Nigerian economy's dependency on oil revenues, the country is likely to experience the repercussions of these looming global trends profoundly.

Through his analysis, Rewane underscores the intricate interplay of global events and their potential ripple effects on developing economies like Nigeria, emphasising the importance of strategic preparation for the uncertainties awaiting in 2025.

Source: Noah Wire Services