An economist and energy analyst, Kayode Omosebi, says Nigeria’s macroeconomic environment has transitioned from the crisis-driven fragility of previous years to a more stable and resilient economic structure, citing improved foreign exchange inflows, stronger trade balances, and monetary policy reforms as key factors supporting the shift.
Speaking during an interview with ARISE News on Friday, Omosebi explained that Nigeria’s economic outlook has improved significantly due to stronger fundamentals in the balance of payments and a more stable monetary framework.
According to him, the country’s external position has strengthened considerably, with Nigeria recording a net balance of payments surplus of about $6 billion, driven largely by a $13 billion trade surplus. He noted that the development reflects reduced import dependency and increased domestic refining capacity.
“There is now a stronger medium-term anchor for the naira,” Omosebi said. “It is a combination of fundamental stability and monetary stability. Our balance of payments is in a better position, with about a six-billion-dollar net surplus driven by a thirteen-billion-dollar trade surplus.”
He added that Nigeria’s foreign exchange dynamics have improved compared with previous years when the market struggled with supply shortages and volatility.
“At the moment we don’t have a big buyer or big seller dominating the market. It is largely a free market with enough supply,” he explained.
Omosebi also attributed part of the improvement to increased portfolio investments and higher diaspora remittances, which he described as a major support for Nigeria’s foreign exchange inflows.
“Portfolio investment is now about six billion dollars compared to roughly 1.2 billion dollars previously,” he said. “At the same time, remittances from Nigerians in the diaspora have become a blessing in terms of foreign exchange proceeds.”
The economist further noted that Nigeria’s foreign exchange reserves now provide stronger import cover, giving monetary authorities greater flexibility in managing economic shocks.
“We used to struggle with four to six months of import cover, but now we are looking at more than twelve months,” he said. “That places the Central Bank in a stronger position to manage the market.”
However, Omosebi warned that global geopolitical tensions, particularly in the Middle East, could still pose risks to Nigeria’s economic outlook through energy price shocks.
“If crude oil prices rise significantly, we will see the pass-through effect on energy prices in Nigeria,” he said. “Diesel and petrol prices could increase because of landing costs and refining margins.”
Despite these risks, he maintained that the overall impact of rising oil prices could still be beneficial for Nigeria due to higher export revenues.
“The situation is both positive and negative, but on balance it is net positive for Nigeria because higher crude prices translate to higher oil receipts,” he explained.
Omosebi also warned that energy price increases could slow the pace of inflation decline, particularly as transport and energy costs remain major drivers of inflation in Nigeria.
“Energy prices and transport costs play a major role in inflation dynamics,” he said. “Inflation may not fall as quickly as expected because of these shocks.”
He added that the Central Bank of Nigeria (CBN) is likely to maintain a cautious monetary stance to preserve stability in the face of external economic pressures.
“There is still a need for caution,” Omosebi said. “Even though inflation has started to ease slightly, we remain in a tight monetary policy environment.”
Triumph Ojo
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