Nigeria’s efforts to benefit from rising global oil prices are being threatened by mounting inflationary pressures, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said.
Speaking on Tuesday at the Nigeria Development Update presentation by the World Bank in Abuja, Edun warned that while higher crude oil prices could boost government revenue, they are simultaneously driving up costs across the economy.
According to him, Nigeria’s position as an oil-producing nation leaves it exposed to both the benefits and downsides of global price increases.
“We are on both sides of the equation,” he said, noting that rising energy prices are already feeding into domestic inflation. He explained that higher gas costs are increasing fertiliser prices, which in turn are pushing up food costs and worsening the burden on households.
The minister identified inflation as a key risk to economic stability, warning that global developments, including high interest rates in advanced economies, could further increase borrowing costs and strain Nigeria’s debt profile.
“In this kind of environment, we must be prepared for different outcomes,” he said.
Edun disclosed that the Economic Management Team is assessing various global scenarios and advising President Bola Tinubu on policy responses, particularly in light of ongoing geopolitical tensions in the Middle East.
Despite these concerns, he said recent reforms have placed Nigeria in a stronger position to manage external shocks, urging policymakers to remain consistent in implementing fiscal and monetary measures.
He added that oil production has risen to about 1.84 million barrels per day, offering potential support for government revenue if sustained.
Also speaking, the Deputy Governor for Economic Policy at the Central Bank of Nigeria, Mohammed Sani Abdullahi, said Nigeria is now better equipped to withstand global economic shocks than in previous years.
He attributed this to reforms in the foreign exchange market, which have improved transparency and boosted investor confidence. According to him, the naira has recently shown signs of appreciation, reflecting growing market stability.
Abdullahi added that the apex bank is set to introduce a new foreign exchange manual to strengthen exchange rate management and attract more investment.
Presenting the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said that although the economy has remained resilient, rising prices particularly fuel costs pose significant risks.
Petrol prices, he noted, have surged by over 50 per cent since the start of the Middle East crisis, contributing to renewed inflationary pressure.
