Edun noted that the US-Israel-Iran war has created volatility in the global energy sector, driving crude oil prices up sharply and disrupting supply chains. This has raised fears of higher inflation and slower growth worldwide, with the World Bank and IMF projecting an upward trend in inflation and a decline in global economic growth.
Despite the turbulence, Edun said Nigeria is entering this period of uncertainty with stronger economic fundamentals than during recent shocks like COVID-19 and the Russia/Ukraine war, thanks to macroeconomic reforms introduced since May 2023. Key steps taken include:
The government is working to improve crude production, which recently reached 1.86 million barrels per day, to maximize foreign exchange earnings and fiscal revenues.
The Naira-for-Crude policy has been strengthened to safeguard local fuel production and prevent shortages that could strain households and businesses.
Nigeria continues to operate a liberalised foreign exchange market to ensure smooth capital flows. The policy was validated by FTSE Russell’s reclassification of Nigeria as a Frontier Market, effective September 2026.
Trade policy adjustments*: Improved coordination across fiscal, monetary, and trade policies has led to tariff reductions on critical industrial inputs to support production and expand international trade.
“These actions reflect a government focused on stabilisation, resilience, and growth continuity,” Edun said
The minister identified three main channels through which the crisis poses risks:
Analysts warned that while the naira has remained relatively stable, it has come at a heavy cost. Lukman Otunuga, Head of Market Research at FXTM, noted Nigeria’s FX reserves fell for 16 consecutive days through April 8 to $48.94 billion, as the CBN defended the currency amid global volatility.
Dr. Kayode Farinto, former Vice President of the Association of Nigerian Licensed Customs Agents, said reforms have helped Nigeria avoid recession but warned that inefficiencies in trade systems like the Nigeria Single Window could raise costs for importers and consumers if not addressed.
David Adonri of Highcap Securities added that Nigeria is paradoxically on both the supply and demand sides of energy. While high crude prices boost revenue, domestic refineries still import crude due to inadequate local supply, diluting the benefit. He said market reforms have enabled the economy to adjust quickly, but stressed that demand management policies must be followed by supply-side programs to normalize prices.
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