Nigeria is witnessing a renewed boost to its foreign exchange reserves and naira stability, thanks to surging global oil prices. Brent crude recently crossed $93 per barrel—well above the 2026 federal budget benchmark of $64.85—fueling optimism for stronger fiscal revenues, enhanced export earnings, and improved exchange rate stability. Analysts warn that any escalation in Middle East tensions affecting the Strait of Hormuz could push Brent prices above $100, potentially amplifying these benefits for Nigeria.
Economists highlight the immediate impact of higher oil prices on the naira. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, notes that improved oil earnings typically strengthen Nigeria’s current account balance and foreign exchange liquidity, reducing pressure on the local currency. The naira has already begun to recover, trading below N1,400 per dollar in the official market for the first time in over a year, reflecting growing investor confidence and stability across multiple market segments.
The Central Bank of Nigeria (CBN) has played a crucial role in this recovery. Governor Olayemi Cardoso reported that net foreign exchange reserves rose from $23.11bn at the end of 2024 to $34.80bn by December 2025, while gross reserves climbed to $46.11bn in January 2026. The apex bank attributes this growth to reforms in FX market management, stronger non-oil exports, diaspora remittances, and disciplined fiscal policies, signaling a more resilient economy capable of withstanding external shocks.
Foreign capital inflows are also on the rise, reaching $20.98bn within the first ten months of 2025—a 70% increase from the previous year. Non-oil exports grew by over 18%, and diaspora remittances strengthened by 12%, reflecting increased confidence in Nigeria’s financial system. Experts, including Professor Abiodun Adedipe, note that ongoing reforms—such as subsidy removal, bank recapitalization, and fiscal consolidation—are beginning to produce tangible results in macroeconomic stability and long-term economic growth prospects.
The oil sector continues to recover, with Nigeria producing 1.64 million barrels per day in January 2026, up from 1.55 million barrels in December 2025. The Nigerian National Petroleum Company Limited reported a profit after tax of N385bn for January, supported by completed maintenance work and operational improvements. While monthly revenues fell from N4.82tn to N2.57tn, the increase in production and the broader oil price rally provide a clear lifeline for Nigeria’s economy, reinforcing the naira and bolstering foreign reserves amid ongoing structural reforms.
source: punch