Thursday April 09, 2026

Nigeria was quietly benefiting from a war it didn't start. Last night that ended.

Around 9pm on Tuesday, Donald Trump posted on Truth Social that he'd agreed to a two-week ceasefire with Iran. He described it as a "workable basis for negotiations." Within hours, Brent crude had shed nearly 17%.

Nigeria wasn't in that negotiation. Nigeria wasn't near it. But by Wednesday morning, the number that governs everything about this country's finances had moved in the wrong direction, and there was nothing anyone in Abuja could do about it.

That's the pattern worth naming. Not the ceasefire itself. Peace is welcome. The pattern is that Nigeria's fiscal calendar is still being written in rooms it doesn't enter, by people who aren't thinking about us when they write it.

What happened, precisely

The US and Israel launched military action against Iran on February 28. Iran responded by effectively closing the Strait of Hormuz, through which about 20% of the world's oil normally flows. Brent crude surged from around $70 a barrel to above $110. On some days in March it touched $130. The 2026 budget was built on $64.85 per barrel. Suddenly Nigeria was running a surprise surplus on the oil line. Not because of anything we did. Because of something that happened between Washington, Tel Aviv and Tehran.

The Iran war was terrible for Nigerians at the petrol pump. Prices jumped more than 50% as import costs rose and the global supply shock hit downstream. But at the government revenue level, the war was quietly generous. More dollars per barrel, more naira in the federation account. The World Bank, presenting its Nigeria Development Update in Abuja on Tuesday, noted the windfall and gave clear instruction. Save it. Build buffers. Don't spend it on blanket subsidies.

By Wednesday morning, the windfall had begun unwinding. Brent settled around $91-95 a barrel, WTI around $92-96. Still above the budget benchmark. But no longer the $110-plus that had been padding the accounts. And this is just a two-week ceasefire. Not a peace deal. Iran still controls the Strait. Analysts at BCA Research were already warning on Wednesday that fighting could resume, possibly within weeks.

The mechanism

Nigeria's exposure here isn't complicated to explain. About 90% of Nigeria's foreign exchange earnings come from oil exports. The 2026 budget carries a deficit of roughly N31 trillion, with expenditure of N68 trillion against projected revenue of N37 trillion. That gap is already being bridged by borrowing, including N29 trillion in planned debt for this year alone. When oil is above $100, the gap narrows. When oil falls, the gap widens. The government doesn't control either outcome.

This isn't new. It's the mechanism Nigeria has lived inside for decades. Oil price goes up, spending follows. Oil price falls, crisis follows. In between, analysts write about diversification, governments launch programmes with names, and the structural exposure stays exactly where it was.

The historical echo is precise. In 2014, oil was above $100 a barrel. Nigeria was running record reserves and growing at pace. Then the price collapsed to below $30. The recession that followed lasted until 2017. That collapse also happened because of decisions Nigeria wasn't part of. OPEC chose not to cut production. US shale supply flooded the market. Nigeria's budgets were built around prices that somebody else set, and when those prices moved, the consequences landed here.

What the World Bank actually said

The Development Update presented Tuesday was careful and direct. Nigeria's economy grew 4% in 2025. Inflation has eased from 26% to 15%. External reserves were at $48-49 billion. The picture looked stable.

But the World Bank's lead economist Fiseha Haile gave a clear instruction. Save the oil windfall. His exact framing was that fiscal policy should use the windfall to rebuild buffers and provide targeted support to vulnerable households, not blanket subsidies. That was Tuesday. By Wednesday morning the windfall had started shrinking.

The report also named what the growth numbers don't capture. 110 children per 1,000 die before the age of five. 40% are stunted. More than half aren't developmentally on track before they start school. "These figures should be treated as a crisis," the World Bank's Country Director said. The economy grew 4%. The children who will power that economy in 20 years are being raised in conditions that guarantee most of that potential won't arrive.

The reader stake

If you're running a business that imports anything, your input costs are shaped by the naira rate, which is shaped by dollar inflows, which are shaped by oil revenue. The naira was trading at N1,371 at the official window on Wednesday, reflecting a relative stability built on the reserves cushion and the oil windfall. If the ceasefire holds and oil slides further, that cushion shrinks. The naira doesn't have to collapse tomorrow for this to matter. It matters because the margin for error gets thinner.

If you're in government employment, or dependent on government contracts, or in a state that relies heavily on federal allocation, the budget maths matter. A widening gap between what was projected and what arrives means delays, deferrals, and the quiet erosion of promises made in December.

The ceasefire might hold. It might become a peace deal. Oil might stabilise above $90 and Nigeria might be fine. But the thing that determined Nigeria's fiscal position this week was a conversation between Trump, the Iranian negotiators, and Pakistani mediators. Nigeria wasn't consulted. Nigeria's interest was not part of the calculation.

That's not a complaint. That's the structure. And the structure is the story.

The question this ceasefire raises isn't whether the peace holds. It's whether Nigeria will use the 90 days, or however long the calm lasts, any differently than it used the 90 before it.