As global oil prices continue their downward slide, Nigeria is finding unexpected stability; thanks to sweeping foreign exchange (FX) and macroeconomic reforms led by the Central Bank of Nigeria (CBN). These policy shifts are strengthening the country’s non-oil economy, boosting investor confidence, and positioning Africa’s largest economy for more resilient growth.
Nigeria’s Economy Gradually Breaks Oil Dependence
Oil’s hold on the economy is loosening. It now contributes a smaller share of Nigeria’s Gross Domestic Product, about 33% of government revenue, and just 51% of exports. After nearly a decade of sluggish GDP growth averaging around 2%, the CBN’s reform push is restoring economic optimism. Nigeria posted 4.23% GDP growth in Q2 2025, the strongest in four years, driven by telecommunications, financial services, and modest recovery in oil output.
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How FX Reforms Are Stabilizing the Naira
A key part of this turnaround is the CBN’s shift to a market-determined exchange rate regime, backed by new rules such as the Nigerian Foreign Exchange Code and the deployment of the Electronic Forex Market Surveillance System (EFEMS) powered by Bloomberg BMatch.
These systems have created transparency, curbed manipulation, and improved price discovery in the FX market. The impact has been dramatic:
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The naira now trades within a narrow, stable range
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The once-wide gap between official and parallel market rates has contracted to under 2%, down from over 60%
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Foreign capital inflows surged to $20.98 billion in 2025, over 400% higher than 2023
CBN Governor Olayemi Cardoso said the reforms have made Nigeria “more resilient to external shocks than at any point in recent history.”
External Buffers Strengthen as Reserves Rise
Nigeria’s external sector is enjoying its strongest footing in years. The current account rose 85% to $5.28 billion in Q2 2025, while foreign reserves climbed to $46.7 billion by mid-November, Nigeria’s highest in almost seven years covering more than 10 months of imports.
Crucially, the CBN says these reserves are being built organically, supported by non-oil exports, capital inflows, and improved FX market confidence.
Non-Oil Exports and Remittances Surge
Non-oil exports grew more than 18% year-on-year, supported by flexible exchange rates and competitiveness gains. Diaspora remittances also expanded by 12%, aided by improved transparency and the rollout of the Non-Resident BVN, expected to boost inflows further in 2026.
Global Ratings Agencies Endorse Reform Trajectory
Fitch, Moody’s, and Standard & Poor’s all upgraded or revised Nigeria’s ratings upward, citing stronger reserves, improved fiscal discipline, and FX reforms. The momentum was affirmed in November when Nigeria raised $2.35 billion in Eurobonds, attracting an unprecedented $13 billion in orders.
Experts Applaud the Reforms
Economic expert Prof. ‘Abiodun Adedipe highlighted key reforms transforming the economy:
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FX market cleanup, eliminating arbitrage
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Savings from petrol subsidy removal
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Banking recapitalisation to support a $1 trillion economy
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Stronger fiscal consolidation and accountability
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Promising tax reforms
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Expansion in domestic manufacturing and non-oil exports
He noted Nigeria’s structural strengths: a 237 million population, rapid urbanisation, rising internet penetration, and renewed industrial activity.
Fiscal–Monetary Coordination Strengthens Stability
Cardoso emphasised that reforms are working because monetary and fiscal policies are now more aligned. The government has ended direct deficit financing, upgraded the Treasury Single Account, launched the Revenue Optimisation framework, and created a National Revenue Agency.
The CBN says the next step is a full inflation-targeting regime.
NNPC Reports Strong Gains Despite Oil Output Dip
Despite declining global oil prices, the NNPC posted strong numbers in October 2025:
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Revenue: N5.08 trillion, up from N4.27 trillion
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Profit after tax: N447 billion, double the previous month
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Gas production and sales surged significantly
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Crude oil output dipped slightly from 1.61 to 1.58 mbpd
Oil Price Drop Heightens Risks but Reforms Provide Cushion
Brent crude hovering at $63 per barrel with forecasts of a fall below $50 poses risks to Nigeria’s 2025 budget, which relies on $75 oil and 2 mbpd output. Lower oil revenues could widen the fiscal deficit to 6–7% of GDP.
But analysts say the CBN’s proactive reforms, non-oil export drive, and remittance strengthening are helping shield the economy.
Driving Export-Led Growth
To fully leverage Nigeria’s competitive exchange rate, the CBN recommends:
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Export-oriented production in agriculture, manufacturing, and creative industries
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Deeper backward integration to reduce import dependence
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Value-added manufacturing to replace raw material exports
The success of these strategies, experts say, could mirror China’s export-driven economic renaissance.
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