FG Reviews Policy Options To Cushion Middle East Crisis Impact

The Federal Government has begun reviewing policy options to shield Nigeria’s economy from the potential fallout of escalating geopolitical tensions in the Middle East involving the United States, Israel and Iran.

The move followed a high-level meeting of the Economic Management Team (EMT), chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, to assess possible implications of the crisis for Nigeria’s macroeconomic stability.

According to a statement issued by the Federal Ministry of Finance, the government is closely monitoring developments in the region amid growing uncertainty in global commodity and financial markets.

The statement said the EMT also held a Naira-for-Crude policy coordination meeting to evaluate developments in the global energy market and their potential domestic implications.

“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.

Global markets have been experiencing volatility as fears grow that the conflict could disrupt major energy supply routes, particularly the Strait of Hormuz, which handles a significant portion of the world’s oil shipments.

The government noted that disruptions to such strategic routes could push crude oil prices higher and trigger broader economic consequences for countries integrated into global commodity and financial systems.

Officials identified three key channels through which the conflict could transmit economic shocks to Nigeria.

First is volatility in crude oil and gas prices. The ministry said the global energy market turbulence is already influencing domestic prices of petroleum products, including petrol, diesel, cooking gas and fertiliser.

Second, heightened geopolitical risks could affect capital flows and financial market conditions. Investors typically move funds to safe-haven assets during periods of global uncertainty, which may influence investment flows into emerging markets such as Nigeria.

The third channel is global logistics and supply costs. Disruptions to shipping and energy supply routes could increase freight costs and logistics expenses, potentially putting upward pressure on the prices of goods and services in the domestic economy.

The Minister of Finance noted that prolonged instability in the region could worsen inflationary pressures and increase the cost of living for Nigerians.

“At the EMT meeting, ministers provided sector-specific updates on the evolving situation, while discussions recognised that the ultimate scale of impact on Nigeria will depend on the duration and intensity of the conflict, particularly its effect on global oil supply and prices,” the statement added.

The Economic Management Team is therefore monitoring key macroeconomic indicators, including global crude oil price movements, exchange rate trends, capital flows, financial market conditions and the implications for Nigeria’s fiscal outlook and external reserves.

Despite the emerging global uncertainties, the Federal Government said Nigeria’s economy currently shows signs of improving resilience.

Recent economic data indicate that the country recorded a real Gross Domestic Product growth of 4.07 per cent in the fourth quarter of 2025, representing one of the strongest quarterly growth performances in more than a decade.

The government attributed the growth to the impact of ongoing economic reforms and improved coordination of fiscal and monetary policies.

It stressed that efforts are underway to preserve these gains while ensuring that households and businesses are protected from potential external shocks.

To this end, the Economic Management Team is maintaining close coordination across fiscal, monetary and energy policy institutions to ensure timely responses to any emerging risks.

“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 statement said.

The government further assured the public that it remains vigilant and prepared to take proactive steps to safeguard Nigeria’s economic stability and sustain the country’s growth trajectory amid global uncertainty.