By Abdulsamad Abdulmalik
The Federal Government says it is implementing a series of economic stabilisation measures to cushion the impact of rising global uncertainties, even as experts warn that policy inefficiencies could heighten inflationary pressures and strain consumers.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, disclosed this in a statement issued in Abuja, noting that escalating geopolitical tensions—particularly the US-Israel-Iran conflict—have triggered volatility in global energy markets with direct implications for Nigeria’s economy.
He said the administration is responding with reforms aimed at strengthening domestic resilience, including increased crude oil production, a liberalised foreign exchange regime, and the continuation of the naira-for-crude policy to stabilise fuel supply and reduce pressure on households.
According to Edun, Nigeria is currently better positioned to withstand external shocks compared to previous global crises such as COVID-19 and the Russia-Ukraine war, citing sustained macroeconomic reforms since May 2023.
“Crude oil production has risen to about 1.86 million barrels per day, boosting foreign exchange earnings and fiscal revenues,” he said.
He added that improved policy coordination across fiscal, monetary and trade sectors has supported recent tariff adjustments on key industrial inputs, aimed at strengthening local production and improving trade competitiveness.
Edun also noted that Nigeria’s reclassification as a Frontier Market by FTSE Russell, effective September 2026, reflects growing investor confidence in the country’s economic outlook.
However, experts have cautioned that external shocks could still expose structural weaknesses in the economy.
They warned that missteps in trade and revenue policies may increase supply chain costs, while efforts to stabilise the naira could come under pressure due to continued foreign exchange interventions and declining reserves.
The Middle East crisis has already driven a sharp rise in crude oil prices and disrupted petrochemical supply chains, raising concerns about global inflation and slower economic growth. The IMF and World Bank have both projected tighter global financial conditions in the near term.
Edun explained that the impact of the global crisis is being felt through three main channels: rising energy costs, capital flow volatility, and increased logistics expenses.
He disclosed that petrol prices have risen significantly, from about ₦890–₦900 to between ₦1,260 and ₦1,330 per litre, while diesel prices have surged to about ₦1,550 per litre at peak levels.
The minister warned that geopolitical tensions could also trigger capital flight from emerging markets like Nigeria, while disruptions in global shipping routes may further increase import costs and fuel inflation.
Commenting on the naira’s performance, Head of Market Research at FXTM, Lukman Otunuga, said the currency has remained relatively resilient despite global pressure.
“The naira is currently the second-best performing African currency against the dollar year-to-date, behind only the Zambian kwacha,” he said, adding that the stability comes at a significant cost amid sustained market volatility.
