Escalating tensions in the Middle East, particularly the conflict involving the United States, Israel, and Iran, are creating significant economic uncertainty for Nigeria. The Federal Government has stated its commitment to coordinating fiscal, monetary, and energy policies to safeguard the nation's economic stability from potential shocks arising from the geopolitical disruptions.

The Ministry of Finance, in a statement signed by Assistant Director Uloma Amadi, highlighted that the situation remains fluid, with global market uncertainty driven by concerns over disruptions to critical energy supply routes. This has already contributed to volatility in crude oil prices and financial markets, with Brent crude trading above $100 per barrel, a significant increase from $70 per barrel at the conflict's outset.

The finance ministry identified three key 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 directly driving increases in domestic prices for fuel, diesel, and cooking gas. Heightened geopolitical risks may also prompt a shift to safe-haven assets, potentially affecting capital flows into emerging markets like Nigeria. Furthermore, disruptions to major shipping routes could raise freight and logistics costs, exerting upward pressure on domestic prices.

Despite these challenges, the Federal Government emphasizes that Nigeria enters this period of global uncertainty from a position of strengthening fundamentals. Real GDP grew by 4.07 percent in Q4 2025, noted as one of the strongest quarterly performances in over a decade. The Economic Management Team (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.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that the government will not control petrol prices despite the Middle East tensions. He explained that the current administration's economic direction is built on market-based policies, and intervention would only be considered as a last resort. Edun highlighted the expansion of the compressed natural gas (CNG) program as a key measure to ease the impact on Nigerians by reducing transportation costs, with an approved acceleration of vehicle conversions from petrol to CNG.

Edun also pointed to Nigeria’s growing local refining capacity, including the Dangote Refinery, as a significant factor in managing shocks in the global energy market. He noted that domestic refineries now have the capacity to meet Nigeria's daily demand of approximately 50 million litres of petrol, making the country more resilient at a time when some nations face fuel shortages. However, he acknowledged that international developments could still affect Nigeria through higher freight charges, supply chain disruptions, and increased production costs.

The minister also warned that continued global inflation could lead to higher global interest rates, increasing borrowing costs for countries like Nigeria. He reiterated that the government's reforms, such as the removal of petrol subsidy and the unification of exchange rates, have helped stabilize the economy. Nigeria's public debt stood at approximately N122 trillion upon the current government's assumption of office, including N30 trillion in Ways and Means advances. Exchange rate adjustments further increased the naira value of the country's debt by about N47 trillion, contributing to a significant debt service burden.

To combat poverty, the government is focusing on achieving stronger economic growth, aiming for at least seven percent annually, to create more jobs. The social protection program has supported about 10 million households, representing roughly 50 million Nigerians, through direct cash transfers. Efforts are also underway to expand financing for micro, small, and medium enterprises, which account for about 85 percent of private sector activity.