Barbara Bako
The Federal Government says it is closely monitoring the escalating geopolitical tensions in the Middle East involving the United States, Israel and Iran, with a view to safeguarding Nigeria’s economic stability.
The Economic Management Team (EMT), chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, held a meeting to assess the potential impact of the crisis on Nigeria’s economy.
Edun also chaired a Naira-for-Crude policy coordination meeting to review developments in the global energy market and their possible domestic implications.
According to the government, the situation remains fluid, with uncertainty in global markets driven by concerns over possible disruptions to key energy supply routes, particularly the Strait of Hormuz.
The government noted that the developments have already contributed to volatility in crude oil prices and financial markets.
Given Nigeria’s integration with global commodity and financial markets, the government identified three key channels through which the crisis could affect the country’s economy.
These include volatility in crude oil and gas prices, which may lead to increases in domestic prices of fuel, diesel, cooking gas and fertiliser.
It also warned that heightened geopolitical risks could trigger a shift by investors toward safe-haven assets, potentially affecting capital flows into emerging markets such as Nigeria and influencing financial market conditions.
In addition, disruptions to major shipping and energy supply routes could raise international freight and logistics costs, thereby exerting upward pressure on domestic prices.
Edun noted that beyond the immediate effects, prolonged instability could raise the cost of goods and services, further pushing up inflation and increasing the cost of living.
At the EMT meeting, ministers provided sector-specific updates on the evolving situation, noting that the eventual impact on Nigeria would depend largely on the duration and intensity of the conflict and its effect on global oil supply and prices.
The team said it was closely monitoring key macroeconomic indicators, including global crude oil price movements, exchange rate developments, capital flows and financial market conditions, as well as implications for Nigeria’s fiscal outlook and external reserves.
The government, however, noted that Nigeria enters the period of global uncertainty with strengthening economic fundamentals.
It cited recent data showing that the country recorded a real GDP growth of 4.07 per cent in the fourth quarter of 2025, one of the strongest quarterly performances in more than a decade.
The government said it remains committed to protecting these gains and maintaining close coordination across fiscal, monetary and energy policy institutions.
It added that policy options were under continuous review to mitigate volatility and shield households and businesses from external shocks.
Edun said careful policy calibration would remain central to the government’s response to ensure that recent progress in macroeconomic stabilisation, revenue mobilisation and economic growth is not undermined by external developments.
He added that the government would continue to monitor the situation closely and adjust policy measures where necessary to minimise disruptions, sustain investor confidence and protect the welfare of Nigerians.
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