The Federal Government of Nigeria has said it is ready to recalibrate economic policies if necessary as geopolitical tensions in the Middle East continue to intensify, warning that the situation could transmit fresh shocks to Nigeria through energy prices, capital flows and global supply chains.
In a statement issued on Tuesday by the Assistant Director of Information and Public Relations at the Federal Ministry of Finance, Mrs Uloma Amadi, the government said the Economic Management Team had begun reviewing the possible economic consequences of the crisis.
According to the statement, the Economic Management Team, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, recently met to assess the potential implications of escalating tensions involving the United States, Israel and Iran.
The minister also presided over a Naira-for-Crude policy coordination meeting where developments in global energy markets and their possible domestic implications were discussed.
The ministry noted that global uncertainty had increased as fears of disruptions to major energy supply routes, particularly the Strait of Hormuz, continue to fuel volatility in crude oil prices and financial markets.
“The Federal Government of Nigeria is closely monitoring escalating geopolitical tensions in the Middle East involving the United States, Israel and Iran, and remains committed to safeguarding Nigeria’s economic stability,” the statement said.
Officials at the meeting identified three key transmission channels through which the crisis could affect the Nigerian economy.
The first relates to volatility in crude oil and gas markets. The ministry warned that rising global energy prices could translate into higher domestic costs for petroleum products and other energy-related inputs.
“Volatility in global energy markets is already driving increases in domestic prices, including fuel, diesel, cooking gas and fertiliser,” the statement added.
The second channel involves financial markets and capital flows. According to the government, heightened geopolitical risks often push investors to move funds into safer assets, which could reduce capital inflows into emerging markets such as Nigeria.
The third transmission mechanism concerns global logistics and supply chains. The ministry warned that disruptions to major shipping routes or energy corridors could increase freight costs and put additional pressure on domestic prices.
“Disruptions to major shipping and energy supply routes could raise international freight and logistics costs, putting upward pressure on domestic prices,” the statement said.
Beyond these immediate channels, the government cautioned that prolonged instability in the region could deepen inflationary pressures and increase the cost of living if global commodity prices remain elevated.
At the meeting, ministers across key economic sectors also provided updates on how developments in global markets could affect Nigeria’s fiscal and macroeconomic outlook.
According to the ministry, the extent of the impact on Nigeria would depend largely on how long the conflict persists and the degree to which it disrupts global oil supply.
To track the evolving situation, the government said the Economic Management Team is closely monitoring a range of macroeconomic indicators, including global crude oil prices, exchange rate movements and the potential pass-through to domestic inflation.
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Other indicators under review include capital flow trends, financial market conditions and possible implications for Nigeria’s fiscal outlook and external reserves.
Despite the uncertainty, the government maintained that Nigeria is entering a period of heightened global risk with stronger macroeconomic fundamentals.
It cited recent economic data showing that the country recorded real Gross Domestic Product growth of 4.07 per cent in the fourth quarter of 2025, one of the strongest quarterly performances in more than a decade.
The ministry attributed the growth to ongoing economic reforms and improved macroeconomic coordination.
The government stressed that it remained committed to protecting these gains through close coordination among fiscal, monetary and energy policy institutions.
Meanwhile, rising fuel costs are already beginning to affect businesses, with petrol prices reportedly climbing to about N1,300 per litre in several parts of the country.
Economists and the Organised Private Sector warned that the increase could drive inflationary pressures and force businesses to adjust budgets and pricing strategies to cushion the impact on consumers.