FG MOVES TO SECURE FUNDING RELIEF AMID ECONOMIC PRESSURE
Read Time:2 Minute, 39 Second
By: Balogun Ibrahim
The Federal Government has said it will explore cheaper financing options and strengthen global financial support as rising geopolitical tensions continue to exert pressure on Nigeria’s economy.
This was contained in a media briefing issued on Monday by the Special Adviser to the Minister of Finance and Coordinating Minister of the Economy on Media and Communications, Dr Ogho Okiti, ahead of the 2026 IMF and World Bank Spring Meetings in Washington, DC.
According to the statement, Nigeria is facing economic headwinds driven by the ongoing US–Israel–Iran conflict, which has disrupted global energy markets, tightened financial conditions, and fuelled renewed inflationary pressures worldwide.
It noted that the situation comes at a time when Nigeria is implementing key economic reforms, making it more difficult to sustain growth and ease cost-of-living pressures.
The government stated that a major priority at the Spring Meetings would be to advocate for lower borrowing costs for developing countries and more equitable global financial conditions to reduce fiscal strain.
It also said Nigeria would seek additional international support for economies simultaneously managing reforms and external shocks.
The statement highlighted that crude oil prices have surged significantly due to the conflict, with Bonny Light rising from about $70–$73 per barrel to over $110–$120.
While higher oil prices could boost revenue and foreign exchange earnings, the government warned that gains are being eroded by rising domestic costs.
Petrol prices reportedly increased by over 50 per cent, while diesel prices rose by more than 70 per cent at peak levels.
The Federal Government identified three main transmission channels through which the crisis is affecting Nigeria: rising energy costs, weakening capital inflows, and higher global logistics and import expenses.
It explained that geopolitical instability typically pushes investors toward safer assets, reducing inflows into emerging markets like Nigeria and tightening local financial conditions.
The statement also warned that disruptions to global shipping routes and energy supply chains could increase freight costs and further drive inflation through higher import prices.
Despite these challenges, the government said Nigeria is better positioned to withstand external shocks compared to previous crises such as the COVID-19 pandemic and the Russia–Ukraine war.
It cited ongoing reforms, including foreign exchange liberalisation and fuel subsidy removal, as steps that have strengthened macroeconomic stability.
Oil production has reportedly improved to about 1.86 million barrels per day, while initiatives such as the naira-for-crude policy are aimed at stabilising domestic fuel supply.
The government also noted that maintaining a liberalised foreign exchange regime and Nigeria’s reclassification as a Frontier Market by FTSE Russell reflect growing investor confidence.
Officials said these reforms are designed to attract investment, strengthen stability, and support long-term inclusive growth.
At the Spring Meetings, Minister of Finance Wale Edun is expected to engage global financial institutions, investors, and development partners to reinforce Nigeria’s economic outlook and attract capital inflows.
Discussions will focus on improving policy credibility, boosting investor confidence, and positioning Nigeria as a resilient economy amid global uncertainty.
The government added that its next phase of economic strategy will focus on scaling private investment, deepening domestic capital markets, and promoting job-creating growth.
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