March 28, 2025/CSL Research

• Uncertainty over US tariffs and potential retaliation poses global risks, though the direct impact on Nigeria is expected to be limited.
• Lower oil prices and production could weigh on Nigeria’s fiscal and current account performance.
• Despite ongoing challenges, Nigeria’s macroeconomic outlook remains positive.

Summary

Nigeria faces a complex economic landscape, balancing both external and domestic challenges. Global risks arising from uncertainty over US tariffs and potential retaliatory measures could disrupt international trade and investment. While Nigeria’s direct exposure to these tensions is limited, a significant slowdown in Europe and Asia – key trade partners – could dampen growth prospects.

At the same time, the increasing likelihood of lower oil prices and production presents fiscal challenges. A sustained decline in oil prices and/or output could widen the fiscal deficit, reduce foreign currency earnings, put pressure on external reserves, and limit the Central Bank of Nigeria’s (CBN) capacity to support the Naira.

Despite these headwinds, Nigeria’s macroeconomic fundamentals remain broadly favourable, supported by ongoing economic reforms. Additionally, the prospect of US interest rate cuts could bolster the government’s efforts to access international capital markets later this year – a move seen as crucial for strengthening foreign currency reserves and managing the country’s debt maturity profile.

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​​​​​​​​​CSL Flash Report – Navigating Headwinds.pdf​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​