Middle East: UN Body Frets over Global Disruptions on Trade, FG Says It’s Monitoring Developments

• Economic Management Team meets, identifies three channels of impact on economy

Ndubuisi Francis in Abuja

The federal government has declared that it is closely monitoring escalating geopolitical tensions in the Middle East involving the United States, Israel, and Iran. The government expressed its commitment to safeguarding Nigeria’s economic stability.

The federal government’s position followed a meeting of Economic Management Team (EMT), chaired by Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun in Abuja, Tuesday.

The meeting came as the United Nations Trade and Development (UNCTAD) raised concerns over global trade disruptions in the Strait of Hormuz following the ongoing hostilities in the Middle East.

The channel is one of the world’s most critical maritime chokepoints, carrying around a quarter of global seaborne oil trade and significant volumes of liquefied natural gas and fertilisers.

In a statement released by Assistant Director in the Ministry of Finance, Mrs. Uloma Amadi, Edun said the situation in the Middle East remained fluid. He added that the government was closely monitoring escalating geopolitical tensions in the region.

The statement said the economic team, chaired by Edun, had convened a meeting to assess the war’s effect on Nigeria’s economy.

It said, “The Honourable Minister 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 statement added that given Nigeria’s integration with global commodity and financial markets, the government had identified three immediate transmission channels through which the crisis could affect the Nigerian economy.

They were via crude oil and gas prices, adding that volatility in global energy markets is already driving increases in domestic prices, including fuel, diesel, cooking gas, and fertiliser.

The statement said the second channel was capital flows and financial markets, stressing that 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.

The last, according to the statement, is global logistics and supply costs, as disruptions to major shipping and energy supply routes could raise international freight and logistics costs, putting upward pressure on domestic prices.

“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.

It added, “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.”

It underscored the areas EMT was closely monitoring developments across key macroeconomic indicators to include global crude oil price movements and supply conditions, exchange rate developments and potential pass-through to domestic prices, and capital flows and financial market conditions.

It said the implications for Nigeria’s fiscal outlook and external reserves were also being considered.

The statement said the federal government emphasised that Nigeria entered this period of global uncertainty from a position of strengthening economic fundamentals.

It stated, “Recent data shows real GDP growth of 4.07 percent in Q4 2025, one of the strongest quarterly performances in over a decade, reflecting the positive impact of ongoing economic reforms and improved macroeconomic coordination.

“The government remains fully committed to protecting these gains.

“Accordingly, the Economic Management Team is 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.”

The finance ministry said, “The Honourable Minister of Finance and Coordinating Minister of the Economy emphasised that careful policy calibration will remain central to the government’s response, ensuring that recent progress in macroeconomic stabilisation, revenue mobilisation, and economic growth is not undermined by external developments.

“He further noted that 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 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 concluded.

Meanwhile, in a report released yesterday, UNCTAD warned that higher energy, fertiliser and transport costs, including freight rates, bunker fuel prices and insurance premiums, might increase food costs and intensify cost-of-living pressures, particularly for the world’s most vulnerable.

The world body stated that the now blocked Strait of Hormuz was a very vital passage for global trade.

UNCTAD observed that the ongoing military escalation in the region had disrupted shipping flows through the narrow passage, adding that the resulting ripple effects go far beyond the region, affecting energy markets, maritime transport and global supply chains.

While the overall global economic impacts will depend on the duration and scale of the disruption, UNCTAD explained that the situation highlights the importance of continued monitoring, particularly implications for vulnerable economies.

It pointed out that disruptions in the Strait of Hormuz underscored the vulnerability of critical maritime chokepoints to geopolitical tensions and their potential to transmit shocks across supply chains and commodity markets.

The global trade body also stated that reducing risks to global trade and development, including environmental risks, required de-escalation and safeguarding maritime transport, ports and seafarers, and other civilian infrastructure, while maintaining secure trade corridors in line with international law and freedom of navigation.

According to UNCTAD, economic impacts, both globally and for the region, will depend on the duration, intensity and geographic scope of the tensions.

“Continued monitoring is essential to assess evolving risks and their potential impacts,” it stated

On the socio-economic implications for developing economies, the world body stated that many developing countries already faced high debt service burdens, limited fiscal space and constrained access to finance.

It added, “In this context, rising energy, transport and food costs could strain public finances and increase pressure on household budgets, potentially heightening economic and social pressures and complicating progress toward sustainable development, particularly in economies heavily dependent on imported energy, fertilisers and staple foods.”