TO cushion the impact of global economic shocks particularly from recent U.S. trade tensions Nigeria must increase its oil production and avoid poor fiscal management. This advise comes from Bismarck Rewane, economist and CEO of Financial Derivatives Company.
Rewane made the remarks on Tuesday, April 22, on the sidelines of the IMF Spring Meetings in Washington, D.C. He was responding to the ongoing global tariff crisis triggered by U.S. policies under President Donald Trump, which continue to cause uncertainty in international trade.
“Our strength lies in oil production,” Rewane said. “We need to ramp up output to at least 1.7 million barrels per day. With oil prices dropping, the country might need a supplementary budget soon.”
He stressed the importance of economic stability at home, urging the government to focus on increasing crude output and avoiding fiscal deficits that could worsen Nigeria’s economic position.
Oil production lags as money supply grows
According to the Central Bank of Nigeria (CBN), Nigeria’s money supply rose to N114.2 trillion in March 2025, a 24 per cent increase year-on-year. Rewane warned that too much cash in circulation, combined h falling oil production, could put pressure on the naira and worsen inflation.
“There’s a lot of cash in the system now compared to last year. Money supply is growing and oil production is dropping, which means pressure on currency and gross reserve has dropped below $38 billion. We need to do more on oil production,” he said.
Despite a production quota of 1.5 million barrels per day (bpd) set by OPEC, Nigeria fell short in March, producing just 1.401 million bpd, a drop of 64,000 bpd from February. This marks the second straight month of decline after briefly surpassing the quota in January.
Budget under pressure as oil prices fall
Falling oil prices are also complicating Nigeria’s 2025 budget, which is based on a $75 per barrel benchmark. With Brent crude currently selling for $67.25, the government is reportedly considering a budget review to address the growing deficit.
The situation is raising concerns about Nigeria’s ability to fund its spending plans, especially as oil revenues remain a critical part of national income.
Limited impact from U.S. tariffs for now
OPEC’s latest report suggests that U.S. tariffs will have limited direct impact on Nigeria, thanks to exemptions for oil and gas. However, the broader economic ripple effects and continued global price volatility remain a concern.
“The latest US tariffs, particularly on Nigerian oil and gas exports, are expected to have a limited impact on Nigeria’s economy, considering the exemptions for oil and gas and the country’s limited exposure to US trading,”
The report also noted that although inflation in Nigeria is beginning to ease, a weakening naira could slow that progress.
Rewane concluded by reiterating the urgent need for the government to act: “To stay afloat in the face of global economic turbulence, Nigeria must focus on what it does best—produce oil efficiently and manage its economy responsibly.”
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.