Nigeria is riding the wave of surging global oil prices as the Central Bank of Nigeria (CBN) intensifies its push to stabilise the naira, grow foreign reserves, and attract foreign investment.
Brent crude jumped more than nine percent to $75.15 per barrel—its highest level since February—following renewed tensions between Israel and Iran. West Texas Intermediate (WTI) also surged by 10 percent, hitting $74 per barrel.
“The outlook for the naira has improved, with oil prices crossing the Federal Government’s 2024 budget benchmark of $75 per barrel for the first time this year,” said Assistant Business Editor Collins Nweze.
CBN Governor Olayemi Cardoso is leveraging this momentum with targeted reforms and foreign exchange (FX) policies aimed at boosting investor confidence. Nigeria’s foreign reserves have grown fivefold, now surpassing $40 billion—providing up to eight months of import cover.
“We witnessed a $6 billion current account surplus in the first half of 2024… supported by improved domestic refining capacity, a growing focus on non-oil exports, and higher remittance inflows,” said Cardoso.
GDP grew by 3.4 percent in 2024, with a strong fourth-quarter showing of 4.6 percent—the highest in over a decade. Inflation is also easing, and prices of basic goods like rice and beans are beginning to stabilise.
Beyond oil, the CBN is encouraging a shift toward value-added exports. “We’re urging businesses to focus on sectors like agriculture, manufacturing, and the creative industries,” Cardoso said.
Telecoms are also being nudged toward local production. At a recent meeting with Airtel Africa CEO Sunil Taldar, Cardoso advised operators to begin producing items like SIM cards and cables locally. Taldar responded by reaffirming Airtel’s commitment to domestic production and digital inclusion.
The creative economy is also getting a boost, with Cardoso projecting it could generate up to $25 billion annually through music, film, crafts, and digital content exports.
According to economist Dr. Muda Yusuf, “The surge in crude oil price would impact Nigeria’s forex earnings… better forex liquidity and ultimately the stability of the naira exchange rate.”
He added: “High oil prices are good news for upstream oil and gas investors… and could help reduce Nigeria’s fiscal deficit below N17 trillion this year.”
Analysts at Afrinvest West Africa believe the Federal Government’s N19.5 trillion oil revenue target for the year is now within reach. They urge prudent budgeting and stronger anti-crude theft measures to maintain fiscal discipline.
The telecom sector, too, shows growth potential. December 2024 data from the NCC shows 3.2% growth in telephony subscribers, with MTN Nigeria leading the market.
Stakeholders like ALTON’s Executive Secretary Gbolahan Awonuga and Cowry Asset’s Charles Abuede agree that backward integration in telecoms and reduced FX demand could cut production costs and improve long-term profitability.
In the FX market, daily turnover has jumped by 226% compared to 2023, with foreign portfolio inflows rising over 72% and capital repatriation exceeding $9 billion.
“These results reflect improved confidence in the reforms we embarked on,” said Cardoso.
With strong oil prices, FX market reforms, and a focus on domestic value creation, Nigeria’s economic outlook is brightening—and the naira, for now, is holding strong.
