CHIDI UGWU, ABUJA
The Federal Government has raised concern over the escalating geopolitical tensions in the Middle East, warning that the unfolding crisis involving the United States, Israel and Iran could have significant implications for Nigeria’s economy if the situation deteriorates further.
To respond to the emerging risks, the government said it is closely monitoring developments in the region and has begun reviewing policy options aimed at protecting the country from potential economic shocks linked to the conflict.
The Economic Management Team, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, held a high-level meeting in Abuja to assess how the growing tensions could affect Nigeria’s economic outlook.
The meeting also reviewed developments in the global energy market under the government’s Naira-for-Crude policy coordination framework, with particular attention to how instability in the Middle East could influence domestic fuel supply and pricing.
According to the team, the crisis has already created uncertainty across global commodity and financial markets, largely driven by fears that key oil and energy supply routes could be disrupted. Of particular concern is the strategic Strait of Hormuz, a vital maritime corridor through which a significant share of the world’s oil shipments passes.
The team warned that any disruption along the route could trigger volatility in international crude oil prices and ripple across economies that depend on global energy markets, including Nigeria.
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The government noted that the conflict could affect Nigeria through rising energy prices, shifts in global investment flows and higher international logistics costs.
It explained that volatility in global oil and gas markets could lead to increases in domestic prices of fuel, diesel, cooking gas and fertiliser, placing additional pressure on households and businesses.
Beyond energy costs, heightened geopolitical risks could also cause investors to move funds into safer assets, potentially reducing capital flows to emerging markets such as Nigeria and affecting broader financial market stability.
The government further warned that disruptions to global shipping routes could push up freight and logistics costs, which may eventually translate into higher prices for imported goods and services.
At the meeting, ministers provided updates from their respective sectors while reviewing how prolonged instability in the Middle East could shape Nigeria’s economic outlook.
The economic team acknowledged that the eventual impact on Nigeria would largely depend on how long the crisis lasts and how severely it affects global oil supply and pricing dynamics.
Despite the uncertainties, the government said Nigeria is entering the period of global tension with improving economic fundamentals, pointing to stronger economic growth driven by ongoing reforms and improved macroeconomic coordination.
Authorities maintained that the Economic Management Team will continue to track key economic indicators and maintain close coordination across fiscal, monetary and energy policy institutions.
The government assured Nigerians that it remains vigilant and prepared to adjust policies where necessary in order to protect economic stability, sustain investor confidence and shield households and businesses from the possible fallout of the Middle East crisis.
