FG reveals efforts to safeguard economy from Middle East tension

The federal government has stated its efforts to coordinate fiscal, monetary, and energy policies to safeguard Nigeria’s economic stability from possible shocks arising from the escalating Middle East tensions involving the United States, Israel, and Iran. The government said that it is also reviewing options to shield households and businesses from possible economic threats from the escalation. The effort was disclosed in a statement by the Federal Ministry of Finance and signed by the ministry’s Assistant Director, Information and Public Relations, Uloma Amadi, on Wednesday. According to the finance ministry, the plan to safeguard Nigeria’s economic stability was deliberated upon at the recent Economic Management Team (EMT) meeting, Naira-for-Crude policy coordination, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. | | |---| “The situation remains fluid, with global market uncertainty driven by concerns over disruptions to critical energy supply routes, particularly the Strait of Hormuz, already contributing to volatility in crude oil prices and financial markets,” the statement read. The finance ministry further identified three transmission channels through which the crisis could affect the Nigerian economy: crude oil and gas prices, capital flows and financial markets, and global logistics and supply costs. “Volatility in global energy markets is driving increases in domestic prices, including fuel, diesel, cooking gas, and fertiliser. “Heightened geopolitical risks may prompt a shift to safe-haven assets, affecting capital flows into emerging markets, including Nigeria. “Disruptions to major shipping routes could raise freight and logistics costs, putting upward pressure on domestic prices,” the ministry stated. The US-Israel war against Iran has created tensions and geopolitical disruptions across the supply chain of crude. Brent, the international price benchmark for Nigerian crude, which traded at $70 a barrel the day the conflict started, has since recorded volatility, trading at above $100. Ripple Effects Beyond these immediate effects, the finance ministry explained that sustained instability of the country’s economy could further worsen inflation and cost of living crises. It stated that the committee, EMT, is closely monitoring key macroeconomic indicators, including crude oil prices, exchange rate developments, capital flows, and implications for Nigeria’s fiscal outlook and external reserves. “The Federal Government emphasises that Nigeria enters this period of global uncertainty from a position of strengthening fundamentals. Real GDP grew by 4.07 percent in Q4 2025 – one of the strongest quarterly performances in over a decade. “The EMT is maintaining close coordination across fiscal, monetary, and energy policy institutions, with policy options under continuous review to mitigate volatility and shield households and businesses from external shocks,” the finance ministry stated. It added that careful policy calibration will remain central to the government’s response, ensuring recent gains in macroeconomic stabilisation and growth are not undermined by external developments. “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.”