Global oil prices have fallen sharply, now hovering slightly above $64 per barrel. For an oil-dependent economy like Nigeria, this persistent slide in crude prices poses a serious concern rather than a reprieve. The Wall Street Journal's sobering projection that Brent crude could dip below $50 per barrel by the end of 2025 underscores the urgency for decisive policy action. In response, the Olayemi Cardoso-led Central Bank of Nigeria (CBN) has rolled out proactive measures designed to cushion the economy against the looming oil price shock, safeguard foreign exchange inflows and strengthen the foundations for sustainable growth, reports Assistant Editor COLLINS NWEZE
The politics and volatility surrounding global oil prices continue to stir deep concern for Nigeria's economy and revenue stability. Brent futures recently eased by 0.71 per cent to $64.47 per barrel as the U.S.-China trade truce excluded energy discussions, leaving the global supply outlook uncertain. Against this backdrop, Nigeria's 2025 budget faces pressure, built on an assumption of oil production of two million barrels per day and a benchmark price of $75 per barrel.
With current prices trading below this benchmark, oil revenues are expected to fall short, potentially widening the fiscal deficit to between six and seven per cent of GDP. Such a gap could heighten inflationary pressures, strain public finances, and test overall macroeconomic stability. To cushion the economy against the looming oil price shock, the Central Bank of Nigeria (CBN), under the leadership of Olayemi Cardoso, has rolled out proactive measures aimed at strengthening non-oil revenue streams. These include policies to boost non-oil exports, enhance backward integration to cut reliance on imports, and streamline diaspora remittances to improve foreign exchange inflows.
Drawing inspiration from China's economic playbook, the CBN believes Nigeria's competitive exchange rate can spur export-led growth. To harness this advantage, the apex bank is urging businesses to focus on sectors with high export potential -- notably agriculture, manufacturing and the creative industries. Firms are encouraged to embrace import-substitution models by improving local production capacity and to pursue value addition by exporting processed rather than raw goods to boost foreign exchange earnings.
Cardoso has also identified the creative sector as a potential $25 billion annual contributor to the economy, citing vast opportunities in music, film, crafts and digital exports. He called on entrepreneurs to leverage global platforms, international markets, and cross-border tours to attract dollar inflows. In a related development, the CBN governor urged telecommunications firms to reduce dependence on foreign imports by producing key components locally. The backward integration strategy, he explained, could unlock sustainable growth for the real sector and strengthen Nigeria's industrial base at a time of growing fiscal pressure and shifting global dynamics.
Global oil politics
Global oil prices could face renewed pressure if OPEC+ moves to increase production at its November 2025 meeting. The alliance is reportedly considering reviving another tranche of output in December -- a decision that may heighten market fears of a supply glut. Traders are closely monitoring India and China, key buyers of Russian crude, for signals that could reshape global demand and price dynamics.
U.S. President Donald Trump recently announced that China would expand purchases of American energy under a broader trade truce, though investors remain cautious amid limited evidence of actual deals. According to Chinese Customs data, the country last imported U.S. crude oil in May and liquefied natural gas in February. RBC Capital Markets projects that OPEC+ may raise output quotas by a modest 137,000 barrels per day in December, a move that could further test already fragile market confidence.
Creating economic buffers amid reforms
Economic reforms instituted by the CBN have removed distortions and laid foundation for economic development, Cardoso has said. Speaking yesterday at the investors' forum held at the sidelines of the ongoing IMF/World Bank Annual Meetings in Washington DC he said that bold and comprehensive reforms have led to greater macroeconomic resiliency and positive economic outcomes.
The investors' forum attended by JP Morgan and other stakeholders is meant to attract global investors to the domestic economy. He said the Federal Government will also issue about $2.3 billion Eurobond, which will also help refinance the $1.18 billion Eurobond maturing in November. He said the event provides a valuable opportunity to engage directly with our partners and investors who continue to show confidence in Nigeria's future. Cardoso said the apex bank remains committed to prudent policy that would bring about durability, ensuring a lasting and positive impact in the economy.
He said about four per cent growth target is being targeted, even as government is pushing through expansion of the non-oil sector growth. The CBN boss said that inflation has continued to drop, with 18.02 per cent target in the nearest term. He said that gross foreign reserves have hit five-year high at $43.4 billion, with capacity to provide 11-month import cover for the country. He said that Nigeria currently enjoys positive balance of payment, contributing positively in easing economic stability. He said difficult economic reforms embarked on by the Federal Government is bearing positive results as seen the stability in exchange rate, stronger economic buffers, and dip in inflation numbers.
Cardoso explained that apex bank has been able to build a stronger economy, through difficult things we have done. He said that Nigeria has a competitive naira, which is game changer that should attract investors to the economy. He said that with a competitive naira, FDIs inflows prospects to the economy has risen.
Deputy Governor, Economic Policy at the CBN, Mr. Mohammed Sadi Abdullahi, said the apex bank has taken a lot on measures to prevent speculative activity and ensure best practices in the market operational framework. "Capital flows, which I mentioned, within the 2019-2020 period before, collapsed by over 75 per cent, have significantly improved and have therefore improved our external position. So, we do now have deeper and functional financial markets, much more robust and transparent. There's been a significant increase in the average monthly turnover to $8.6 billion monthly in 2025 versus an average of $5.5 billion and much less in the year before. Today, CBN stands as a net supplier by less than about a percentage of the market turnover. We're actually a net buyer in the market," he said.
Building resilient economy
Nigeria's economy has been fully restructured and is now resilient, with huge buffers against global risks, Cardoso told global investors at the annual meetings. Cardoso, who is the leader of the Nigeria delegation at the meetings, said the naira, has equally emerged as a competitive currency, with the economy witnessing positive trade balances and large businesses moving from imports to export of locally produced goods and commodities.
According to him, the positive economic indicators have combined to create resilient and strong buffers, keeping the economy in great shapes. Speaking on the impact of the trade tariffs on the domestic economy, the CBN boss, said the tariffs are less of problems for the country. "And for us again, oil is basically the only commodity that was so exposed to the tariffs, and the impact of that was relatively modest. We now have a more competitive currency with the results that, for once, we have a situation where we have a positive balance of trade surplus, and we expect it to be six per cent in GDP for some time," he said.
Cardoso added, "So basically, what is happening is a complete restructuring of the economy, where we are encouraging people to go into domestic production, and, of course, discouraging imports. And I think we were very fortunate, because a lot of the things that were needed to have been done, we did them much earlier, and as a result of that, we're able to create resilience and buffers against potential shocks."
Cardoso explained that oil was the oil commodity that was exposed to the trade tariffs, but the impact was equally modest. "So, and of course, in terms of anchoring expectations, we found that those who followed the Nigerian economy were fairly comfortable. And for us, again, oil is basically the only commodity that was so exposed, and the impact of that was relatively modest," he said.
He said the G-24 has played significant role in finding solutions to global challenges, through dialogue and exchange of ideas with global financial institutions. He said although global growth has been slow, but not as behind as would have been expected to be. In his remarks, G-24 Chairman, Pablo Quirno noted that recent adverse shocks in global economy have left growth below pre-pandemic levels, with rising policy uncertainties creating substantial medium-term headwinds. "Emerging market and developing economies have faced deteriorating terms of trade, reduced export volumes, and declining foreign currency earnings. Many of these countries have implemented domestic policies to mitigate uncertainty, but constrained policy space underscores the urgent need for collective solutions supported by multilateral institutions," he said
Discouraging foreign services import
Speaking in Abuja during a visit by the Airtel Africa management team led by Group CEO Sunil Taldar, the CBN Governor underscored the importance of boosting local production to ease pressure on the dollar, generate employment and strengthen the national economy. He emphasised the urgent need to domestically manufacture key telecom inputs -- such as SIM cards, cables, and towers -- that are currently being imported in large volumes. Cardoso highlighted that over the past 16 months, the CBN has taken deliberate steps to stabilise the foreign exchange market, strengthen the naira, and attract investor confidence. With these foundations now in place, he urged telecommunications companies to embrace backward integration as a strategic imperative.
In response, Airtel Africa CEO Taldar commended the CBN's reform efforts and voiced strong support for local production, noting that such a shift would ultimately yield long-term benefits for the telecommunications industry. He also reaffirmed Airtel's commitment to expanding financial inclusion across Nigeria through innovative technology solutions.
Research Head, Cowry Asset Management Limited, Charles Abuede, said the CBN governor's call was to discourage the importation of foreign services into Nigeria, especially when efforts can be made to develop such services locally. "The high demand for foreign exchange by telecom operators has further pressured the naira due to increased demand for the dollar. However, with adequate infrastructure development and a conducive operating environment facilitated by regulators, these challenges can be mitigated," he said.
According to Abuede, "given Nigeria's FX policies, illiquidity in the foreign exchange market and infrastructure deficits, I think increased investment in the telecom sector would enable operators to embrace backward integration. This would allow them to manufacture key components, such as SIM cards, locally. As a result, production costs could decline -- provided the operating environment remains stable. This will improve profit margins and enhance both top-line and bottom-line growth in the long run."