Tunde Bakare
It has projected that Nigeria could reap as much as N30 trillion in additional oil revenue if global crude prices keeps rising due to the escalating geopolitical tensions in the Middle East.
In a policy brief titled “Boom, Not Gloom,” released by the Nigerian Economic Summit Group (NESG),the advocacy group noted that the recent conflict involving the United States, Israel and Iran has triggered a sharp rise in global oil prices, creating both opportunities and risks for oil-exporting countries such as Nigeria.
The NESG, said under a severe global escalation scenario in which crude oil prices average about $130 per barrel for six months, Nigeria could record a fiscal windfall of up to ₦30 trillion above the 2026 budget benchmark.
The report noted that such a windfall could significantly strengthen the country’s fiscal position and provide additional resources for public investment and debt reduction if properly managed.
The NESG, also projected that stronger oil export receipts could boost foreign exchange inflows and lift Nigeria’s external reserves to about $57 billion, thereby strengthening the country’s external buffers and improving confidence in the foreign exchange market.
It stated that higher oil revenues would also support the naira by increasing dollar liquidity in the domestic market, potentially moderating exchange rate pressures and easing imported inflation.
However, it warned that the benefits of the oil price surge are not guaranteed, citing structural challenges in Nigeria’s oil sector, including lower-than-budgeted crude oil production, infrastructure constraints and persistent crude theft.
It noted that Nigeria’s oil production has recently averaged significantly below the government’s benchmark of 1.84 million barrels per day, stressing that the production gap could reduce the size of the potential windfall.
The NESG further warned that higher global energy prices could translate into increased domestic fuel and transportation costs, thereby raising inflationary pressures in the short term.
To maximise the benefits of the oil price surge, the group urged the Federal Government to adopt a disciplined fiscal strategy by saving revenues above the budget benchmark rather than increasing spending.
Specifically, the NESG advised that windfall earnings should be channelled into the country’s stabilisation and sovereign wealth funds, while part of the additional revenue should be used to reduce Nigeria’s rising public debt burden.
The group also cautioned against any policy reversal on the removal of petrol subsidies, stressing that reintroducing subsidies would erode the fiscal gains from higher oil prices.
According to the NESG, Nigeria now has a rare opportunity to convert a global energy shock into stronger macroeconomic stability, provided policymakers maintain fiscal discipline and sustain ongoing economic reforms.