By Anthony Otaru, with agency report
The Federal Government has warned that a prolonged conflict in the Middle East could have serious implications for Nigeria’s economy.
It, however, assured that authorities are closely monitoring developments to safeguard the country’s economic stability.
Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, gave the assurance after chairing a meeting of the Economic Management Team (EMT) to assess the potential economic implications of the escalating tensions involving the United States, Israel and Iran.
Edun also presided over a Naira-for-Crude policy coordination meeting, during which officials reviewed recent developments in global energy markets and their potential domestic impact.
The Minister said the situation in the Middle East remains fluid, warning that prolonged instability could trigger shocks across global commodity and financial markets with spill-over effects on Nigeria.
According to him, uncertainty surrounding possible disruptions to key energy supply routes, particularly the Strait of Hormuz, has already contributed to volatility in crude oil prices and global financial markets.
He explained that because Nigeria is integrated into global commodity and financial systems, the country could experience the impact through several channels.
These, he said, include volatility in crude oil and gas prices, which could translate into higher domestic fuel, diesel, cooking gas and fertiliser costs.
Edun also warned of potential pressure on capital flows and financial markets, noting that heightened geopolitical tensions often push investors toward safer assets, which could affect capital inflows into emerging markets such as Nigeria.
Another potential challenge, he noted, is rising global logistics and supply costs, as disruptions to major shipping and energy routes could increase international freight costs and, ultimately, push up local prices.
“Beyond the immediate effects, sustained instability could increase the cost of goods and services globally, placing additional pressure on inflation and the cost of living,” Edun said.
During the EMT meeting, ministers provided sector-specific briefings on the evolving geopolitical situation and its possible implications for Nigeria.
Discussions acknowledged that the scale of the impact on Nigeria would largely depend on the duration and intensity of the conflict, particularly its influence on global oil supply and prices.
Edun disclosed that the EMT is closely tracking key macroeconomic indicators as part of measures to anticipate and mitigate possible shocks.
“The Economic Management Team is closely tracking global crude oil price movements, exchange rate developments, capital flows and financial market conditions, as well as the implications for Nigeria’s fiscal outlook and external reserves,” he said.
Despite the uncertainties, the Minister said Nigeria is approaching the current global volatility from a position of improving economic fundamentals.
He cited recent data showing that real Gross Domestic Product (GDP) grew by 4.07 per cent in the fourth quarter of 2025, describing it as one of the strongest quarterly performances recorded in more than a decade.
“This reflects the positive impact of ongoing economic reforms and improved macroeconomic coordination. The government remains fully committed to protecting these gains,” Edun stated.
He added that the EMT would continue to coordinate closely across fiscal, monetary and energy policy institutions, while keeping policy options under constant review to cushion potential shocks.
Edun further assured that the Federal Government would continue to monitor developments in the Middle East crisis and adjust policy measures where necessary to minimise disruptions, sustain investor confidence and protect the welfare of Nigerians.
“The government remains vigilant and proactive and will take all necessary steps to preserve Nigeria’s economic stability and sustain its growth trajectory,” he said.
*Nigeria may face rising smuggling activities amid Iran tensions– Expert
A customs and maritime expert, Eugene Nweke, has said that Nigeria might face rising smuggling amid tensions with Iran, following potential disruptions that could significantly affect global shipping.
Nweke stated this in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
He added that energy markets and trade flows could be affected by the closure of the Strait of Hormuz, a key waterway between Iran and Oman through which some of the world’s oil passes.
NAN reports that the International Maritime Organisation recently said that no fewer than 3,000 vessels and 20,000 seafarers were stranded in the Middle East over the ongoing war by the U.S. and Israel against Iran.
It said that the crucial Strait of Hormuz global shipping corridor, marking the entrance to the Persian Gulf, was closed due to threats of strikes from Iran and elsewhere.
“Customs and security agencies must deploy advanced technology, intelligence-led operations, and regional cooperation mechanisms to counter rising smuggling risks and maintain border integrity,” he said.
The expert said that Nigeria, which relied heavily on imports for refined petroleum products, machinery and consumer goods, could face elevated landing costs and supply volatility.
He said, beyond global disruptions, Nigeria’s maritime sector was also confronting intensifying regional port competition, particularly in West Africa, with the Port of Lomé in Togo.
“At the same time, the Nigeria Customs Service (NCS) has set an ambitious revenue target of N9 trillion, reflecting the government’s broader fiscal consolidation agenda.
“While achievable under improved trade facilitation and enforcement mechanisms, a shifting maritime landscape may introduce operational pressures.
“Reduced port traffic due to regional port competition may inadvertently shift trade flows toward land borders and informal corridors.
“This could result in increased border activities, greater pressure on customs enforcement systems and a potential rise in smuggling and illicit trade across Nigeria’s extensive land borders.
“Furthermore, intensified trade diversion could expose border corridors to heightened security threats, including organised smuggling networks and cross-border criminal activities,” he said.
According to Nweke, these risks underscore the need for stronger surveillance systems, coordinated security operations and improved border management strategies.
He said prolonged disruption or closure of the Strait could trigger global supply shocks, increase freight costs and drive inflationary pressures across import-dependent economies.
He added that, despite these challenges, significant opportunities remained through the expansion of intra-African trade under the African Continental Free Trade Area (AfCFTA) framework.
Nigeria, he said, could position itself as a major supplier of refined petroleum products and manufactured goods across the continent.
This, he said, was achieved by strengthening trade logistics, improving port efficiency, and leveraging domestic industrial capacity, such as the Dangote Refinery.
Nweke said that to navigate this evolving landscape, strategic measures were essential, such as strengthening port competitiveness and enhancing border, surveillance and security.
