Edun: Nigeria targets oil gains amid rising global tension
… Nigeria Designs Different Scenarios to Cushion Impact- CBN …’Save Oil Windfall’ World Bank Tells FG The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, says the
... Nigeria Designs Different Scenarios to Cushion Impact- CBN
...'Save Oil Windfall' World Bank Tells FG
- By Nduka Chiejina (Assistant Editor)
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, says the country is positioning itself to benefit from rising oil prices while carefully managing the risks that come with them.
Speaking at the World Bank presentation of the Nigeria Development Update in Abuja on Tuesday, Edun said the federal government intends to "maximise revenue gains from higher crude oil prices", even as it confronts the wider economic pressures triggered by global tensions, particularly the ongoing crisis in the Middle East.
According to him, Nigeria’s position as an oil-producing country places it in a unique situation where it both gains and loses at the same time. While higher oil prices offer increased government revenue, they also push up costs across the economy, especially in energy and food production.
“We are on both sides of the equation,” Edun said, explaining that rising global prices are already feeding into domestic inflation. He pointed out that higher gas prices are increasing the cost of fertilizer, which in turn raises food prices and worsens the burden on households.
The minister warned that inflation remains a key concern, particularly as global developments continue to create uncertainty. He added that higher interest rates in advanced economies could further complicate Nigeria’s economic outlook by increasing borrowing costs and raising the country’s debt servicing obligations.
“In this kind of environment, we must be prepared for different outcomes,” he said.
Edun disclosed that the Economic Management Team is actively analysing different global scenarios and advising President Bola Tinubu on appropriate responses. This includes assessing how long the current geopolitical tensions may last and how they could affect Nigeria’s economy.
Despite these challenges, the minister said Nigeria is in a stronger position today due to series of economic reforms implemented in recent years. He urged policymakers to remain consistent with both fiscal and monetary reforms in order to sustain stability and build investor confidence.
“There is an opportunity to continue in the same direction,” he said, stressing the need for discipline in economic management.
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Edun also revealed that Nigeria’s oil production has improved significantly, reaching about 1.84 million barrels per day. He described this as a positive development that could support government revenue and strengthen the country’s fiscal position if sustained.
Beyond oil, the minister made it clear that long-term economic progress will depend largely on investment, especially from the private sector. He said government alone cannot drive growth or reduce poverty without strong participation from businesses.
“It is investment—particularly by Nigerians, including small and medium-scale enterprises—that will create jobs and reduce poverty,” he said, adding that government’s role is to provide the right environment and support systems.
He also stressed that social intervention programmes will continue to play a central role in government policy. According to him, social safety nets are now a permanent feature designed to protect poor and vulnerable Nigerians, especially during periods of rising costs.
“In any caring society, support for the most vulnerable is essential and will continue,” he said.
Also speaking at the event, the Deputy Governor for Economic Policy at the Central Bank of Nigeria, Mohammed Sani Abdullahi, said Nigeria is better prepared to withstand global shocks than it has been in the last decade.
He explained that the Economic Management Team has developed multiple response scenarios based on how long the global crisis may last, ranging from short-term disruptions of a few weeks to more prolonged conflicts lasting several months.
“We have considered different timelines and ensured that Nigeria is ready under each scenario,” he said.
Abdullahi attributed the country’s improved resilience to recent reforms in the foreign exchange market, which have increased transparency and allowed market forces to play a greater role in determining the exchange rate.
He noted that unlike some countries that have had to spend heavily to defend their currencies, Nigeria has avoided such measures. He cited Turkey as an example, saying it spent over $20 billion stabilising its currency, while Nigeria did not require similar intervention. “Because of the reforms, the system is now more transparent and credible,” he said.
He added that the naira has shown signs of appreciation in recent weeks, reflecting improved confidence in the market.
To further strengthen the system, Abdullahi announced plans to introduce a new foreign exchange manual aimed at improving exchange rate management and attracting more foreign investment into the country.
He also pointed to strong external reserves and a growing diversification of foreign exchange inflows. According to him, remittances are now competing with oil revenues, while non-oil sources are becoming more significant.
“Our external reserves are strong, and inflows are increasingly diversified,” he said. “We are in a better position than we have been in the last ten years to absorb shocks.”
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The World Bank’s Lead Economist for Nigeria Fiseha Haile, presenting the findings of the latest Nigeria Development Update, said the country’s economy has remained resilient despite global challenges, with growth momentum continuing into early 2026.
According to the report, business activity remains in expansion territory, suggesting that the direct impact of global conflicts on economic growth has so far been limited.
However, the economist warned that the indirect effects are substantial, particularly through rising prices. Fuel prices have increased sharply, with petrol costs rising by more than 50 per cent since the start of the Middle East crisis.
Inflation, while declining from about 33 per cent in 2024 to around 15 per cent currently, remains high and above levels seen in comparable countries. The report noted that inflation is beginning to rise again due to global pressures, posing risks to household incomes and poverty reduction efforts.
“High inflation continues to reduce real incomes and slow progress in reducing poverty,” the economist said.
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On the external front, the report noted improvements in Nigeria’s position, including stronger reserves, reduced exchange rate volatility and a unified foreign exchange system. These reforms have improved the country’s ability to withstand external shocks, although risks remain.
These risks include potential declines in foreign investment, reduced remittances and higher borrowing costs in international markets.
Looking ahead, the World Bank projects that Nigeria’s economy will grow at an average of about 4.2 per cent between 2026 and 2028, supported by ongoing reforms and stronger external conditions.
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However, the report stressed that poverty remains high and that many Nigerians are yet to feel the full benefits of recent economic changes.
“There is a need to ensure that growth is inclusive and that it translates into better living conditions for citizens,” the economist said.
To address these challenges, the report called for disciplined fiscal management, including saving oil windfalls for future shocks and avoiding widespread subsidies that could distort the economy. It also recommended targeted support for vulnerable groups.
Further measures include maintaining tight monetary policy to control inflation, improving electricity supply, reducing the cost of governance and strengthening non-oil revenue generation.
Beyond macroeconomic policies, the report placed strong emphasis on investing in human capital, particularly through early childhood development.
It noted that about seven million children are born in Nigeria each year, but many face serious challenges early in life. Around 110 out of every 1,000 children die before the age of five, while about 40 per cent suffer from stunted growth. More than half are not developmentally ready when they start school.
These challenges, the report said, have long-term consequences for education, productivity and employment.
Children who are healthy and well-nourished are more likely to succeed in school and become productive members of the workforce.
To address this, the World Bank called for a coordinated approach that improves healthcare, nutrition, early learning and institutional support systems.
