Nigeria is positioning itself to benefit from rising global oil prices while carefully managing the associated economic risks, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said.
Speaking in Abuja during a development update presentation by the World Bank, Edun explained that the Federal Government aims to maximise revenue from higher crude oil prices driven by ongoing global tensions, particularly the Middle East crisis. He noted that while increased oil prices can boost government earnings, they also raise costs across key sectors, including energy and food production.
According to him, rising gas prices are already fueling inflation by increasing fertiliser costs, which in turn drive up food prices and place additional pressure on households. He warned that inflation remains a major concern amid persistent global uncertainties, adding that higher interest rates in advanced economies could further increase Nigeria’s borrowing costs and debt servicing obligations.
Edun disclosed that the Economic Management Team is actively analysing various global scenarios and advising President Bola Tinubu on appropriate policy responses, including assessing the potential duration and impact of geopolitical tensions.
Despite the risks, the minister said recent economic reforms have placed Nigeria in a stronger position, urging continued consistency in fiscal and monetary policies to sustain stability and investor confidence. He added that oil production has improved to about 1.84 million barrels per day, a development he described as positive for government revenue if maintained.
He emphasised that long-term growth will depend largely on private sector investment, noting that government alone cannot drive job creation or reduce poverty. He also reaffirmed the administration’s commitment to sustaining social intervention programmes to support vulnerable Nigerians.
Also speaking, Deputy Governor for Economic Policy at the Central Bank of Nigeria, Mohammed Sani Abdullahi, said Nigeria is now better prepared to withstand global shocks than in the past decade.
He explained that multiple response strategies have been developed to address different scenarios, ranging from short-term disruptions to prolonged global conflicts. Abdullahi attributed the country’s improved resilience to reforms in the foreign exchange market, which have enhanced transparency and allowed market forces to determine exchange rates.
He noted that unlike countries such as Turkey, which have spent heavily defending their currencies, Nigeria has avoided similar interventions. He added that the naira has recently shown signs of appreciation, reflecting improved investor confidence, and revealed plans to introduce a new foreign exchange manual to strengthen the system further.
The central bank official also said Nigeria’s external reserves remain strong, with foreign exchange inflows becoming more diversified as remittances increasingly rival oil revenues.
Presenting the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said the country’s economy has remained resilient despite global challenges, with growth continuing into early 2026.
However, he cautioned that the indirect effects of global conflicts—particularly rising fuel prices—are significant. Petrol prices, he noted, have surged by over 50 per cent since the onset of the Middle East crisis, intensifying inflationary pressures.
Although inflation has declined from about 33 per cent in 2024 to around 15 per cent, Haile warned that it remains high and is beginning to rise again due to global factors, impacting household incomes and poverty reduction efforts.
The report highlighted improvements in Nigeria’s external position, including stronger reserves, reduced exchange rate volatility, and a unified foreign exchange system. However, it warned of potential risks such as declining foreign investment, reduced remittances, and rising borrowing costs.
The World Bank projects Nigeria’s economy will grow at an average of about 4.2 per cent between 2026 and 2028, driven by ongoing reforms and improved external conditions. Despite this outlook, the report stressed that poverty remains widespread, with many Nigerians yet to feel the benefits of recent reforms.
It called for inclusive growth policies, recommending disciplined fiscal management, including saving oil windfalls and avoiding broad subsidies, alongside targeted support for vulnerable groups. Additional recommendations include maintaining tight monetary policy, improving electricity supply, reducing the cost of governance, and strengthening non-oil revenue generation.
The report also underscored the need for increased investment in human capital, particularly in early childhood development. With about seven million children born annually in Nigeria, it noted persistent challenges such as high child mortality and widespread stunting, stressing that improvements in healthcare, nutrition, and education are critical to long-term economic growth.