Oil Prices Crash to Pandemic Levels, Threatening Nigeria’s 2025 Budget and Revenue
Nigeria’s economy is under renewed pressure as global oil prices tumble to levels last seen during the COVID-19 pandemic, endangering the nation’s oil-dependent revenue base.
Brent crude plunged by 5.09% to $59.62 per barrel, while US WTI fell 5.54% to $56.28 on Wednesday. The sharp drop follows China’s retaliatory tariff hike on US goods—an escalation in global trade tensions that’s fueling fears of a global economic slowdown.
For Nigeria, where oil accounts for nearly 90% of foreign exchange earnings, the slump is troubling. The 2025 budget was benchmarked at $75 per barrel, with a projected $8 billion deficit. Current prices fall far below that mark, threatening fiscal stability.
Economists warn that Nigeria will feel the impact through reduced revenue, forex instability, and rising inflation. “Beyond oil exports, the broader economy is highly exposed,” said economist Paul Alaje, citing exchange rate volatility and shrinking trade flows.
Tradegrid COO Jide Pratt emphasized the urgent need to diversify the economy and rethink budget benchmarks. “We may need a supplementary budget and should consider selling state assets to buffer the impact,” he noted.
Finance Minister Wale Edun confirmed the government is ramping up crude production and pushing for non-oil revenue through the FIRS and Customs. Nigeria’s oil output dropped to 1.46 million bpd in February—below OPEC’s 1.5 million quota.
Trade Minister Jumoke Oduwole also raised concerns that the global tariff war could erode Nigeria’s competitiveness in non-oil exports, stressing the need to improve standards to access global markets.
With oil prices plunging and no quick global recovery in sight, Nigeria faces renewed calls to break free from its long-standing dependence on crude.
