Nigeria Currency Strengthens Amid Middle East Oil Price Surge

The Nigerian naira strengthened against the U.S. dollar in both official and parallel markets, with official rates reaching between N1,365 and N1,397 per dollar. This recovery followed a surge in Brent crude oil prices to $114 per barrel, triggered by escalating geopolitical tensions in the Middle East. In response to these tensions, Olayemi Cardoso, Governor of the Central Bank of Nigeria, implemented structural reforms including exchange rate unification and the clearance of over $7 billion in foreign exchange backlogs.

These domestic measures, combined with the removal of fuel subsidies to eliminate a $10.7 billion annual fiscal burden, increased Nigeria's external reserves to $48.44 billion by late April. The World Bank subsequently upgraded Nigeria's 2026 economic growth forecast to 4.4%, citing improved investor sentiment and a rebound in the service and agricultural sectors. To ensure long-term stability, the central bank also introduced new minimum capital requirements for banks in March 2026.

The economic boost coincided with the launch of Project Freedom by U.S. President Donald Trump, a naval mission to escort vessels through the Strait of Hormuz. While the Iranian Armed Forces warned they would attack U.S. forces entering the strait, the International Monetary Fund noted that Nigeria faces minimal risk from the crisis due to its capacity to export oil and gas without significant disruption.