The Federal Government, Tuesday said it is prepared 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.
“The Federal Government will continue to monitor the situation closely and adjust policy measures where necessary to minimise disruptions, sustain investor confidence, and protect the welfare of Nigerians,” the government said in a statement.
The statement, signed by the Assistant Director of Information and Public Relations at the Federal Ministry of Finance, Mrs Uloma Amadi, said the Economic Management Team had already begun reviewing the possible economic consequences of the crisis.
According to the ministry, the EMT, chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, recently met to assess the potential implications of escalating tensions involving the United States, Israel and Iran.
The minister also chaired a Naira-for-Crude policy coordination meeting where developments in global energy markets and their domestic implications were discussed.
The statement noted that global uncertainty had increased as fears of disruptions to major energy supply routes, particularly the Strait of Hormuz, 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 said 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 lead investors to move funds into safer assets, potentially reducing 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.
The Honourable Minister noted that beyond these immediate effects, sustained instability could drive increases in the cost of goods and services, placing further upward pressure on inflation and the cost of living,” the statement said.
At the EMT meeting, ministers across key economic sectors provided updates on how developments in global markets could affect Nigeria’s fiscal and macroeconomic outlook.
The discussions, according to the ministry, emphasised that the extent of the impact on Nigeria would largely depend 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 EMT was closely monitoring a range of macroeconomic indicators, including global crude oil prices and supply conditions, exchange rate movements and the possible pass-through to domestic inflation.
Other indicators under review include capital flow trends, financial market conditions, and the potential implications for Nigeria’s fiscal outlook and external reserves.
Despite the uncertainty, the government maintained that Nigeria is currently 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 performance to ongoing economic reforms and improved macroeconomic coordination.
The government stressed that it was determined to protect these gains by maintaining close coordination among fiscal, monetary and energy policy institutions.
According to the statement, policy options are being reviewed continuously to cushion potential shocks and protect households and businesses from the effects of global volatility.
Edun also emphasised that careful policy calibration would remain central to the government’s response as authorities attempt to prevent external shocks from undermining recent progress in macroeconomic stabilisation, revenue mobilisation and economic growth.
The Federal Government assured Nigerians that it remained vigilant and proactive in responding to the evolving global situation.
“The Federal Government assures the public that it remains vigilant and proactive, and will take all necessary steps to preserve Nigeria’s economic stability and sustain its growth trajectory,” the statement added.
The PUNCH earlier reported that as petrol prices jumped to about N1,300 per litre in various parts of Nigeria, businesses across the country are beginning to prepare for a sharp rise in their operational costs.
This was confirmed by economists and the Organised Private Sector, who warned that the hike could fuel inflationary pressures, affecting goods and services, while companies scramble to adjust budgets and pricing strategies to cushion the impact on consumers.
