Middle East crisis: FG identifies threats to economy, promises policy adjustments

By Nana Musa

The Federal Government has said it is monitoring the ongoing crisis in Middle East closely and will adjust policy measures where necessary to minimise disruptions, sustain investor confidence, and protect the welfare of Nigerians.

This is contained in a statemet issued by Mrs Uloma Amadi, the Assistant Director, Information and Public Relations in the Ministry of Finance on Tuesday in Abuja.

The statement was issued after a meeting of the Economic Management Team (EMT), chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun.

The meeting was convened to assess the impact of the escalating geopolitical tensions in the Middle East involving the U.S., Israel, and Iran.

”The federal government will monitor the situation closely and adjust policy measures where necessary to minimise disruptions, sustain investor confidence, and protect the welfare of Nigerians,” he said.

He said the Federal Government remains committed to safeguarding Nigeria’s economic stability.

Edun also chaired a Naira-for-Crude policy coordination meeting to review energy market developments and their domestic implications.

“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 minister said that given the country’s integration with global commodity and financial markets, the government has identified three immediate transmission channels through which the crisis could affect the Nigerian economy.

“Crude Oil and Gas Prices: Volatility in global energy markets is already driving increases in domestic prices, including fuel, diesel, cooking gas, and fertiliser.

“Capital Flows and Financial Markets: Heightened geopolitical risks may prompt a shift to safe-haven assets, affecting capital flows into emerging markets, including Nigeria, as well as broader financial market conditions.

“Global Logistics and Supply Costs: Disruptions to major shipping and energy supply routes could raise international freight and logistics costs, putting upward pressure on domestic prices,” the statement noted.

The minister said 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.

“At the EMT meeting, Ministers provided sector-specific updates on the evolving situation.

”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.

Edun said that the EMT was closely monitoring developments across key macroeconomic indicators, including: ”global crude oil price movements and supply conditions, exchange rate developments and potential pass-through to domestic prices.

“Capital flows and financial market conditions, the implications for Nigeria’s fiscal outlook and external reserves,” he said.

The minister said that the country was entering the period of global uncertainty from a position of strengthening economic fundamentals.

He said that recent data showed real Gross Domestic Product (GDP) growth of 4.07 per cent in Q4 2025, one of the strongest quarterly performances in over a decade.

The minister said that the growth reflects positive impact of ongoing economic reforms and improved macroeconomic coordination.

Edun said that the government remains fully committed to protecting these gains.

The EMT, he said, is also maintaining close coordination across fiscal, monetary, and energy policy institutions, policy options remain under continuous review to mitigate volatility and shield households and businesses from external shocks.

Edun said that careful policy calibration would remain central to the government’s response. (NAN)