The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns that the ongoing conflict between Israel and Iran could have far-reaching implications for Nigeria’s economy, especially for businesses and monetary stability.
In a recent statement, CPPE’s Chief Executive Officer, Dr. Muda Yusuf, warned that the geopolitical tension in the Middle East might trigger a spike in global oil prices, increase inflationary pressures, and complicate monetary policy for Nigeria’s financial authorities.
The statement read, in part, “High energy cost, elevated inflationary pressures and a spike in interest rates are all headwinds that could undermine the profitability of businesses in the economy. Investors in the non-oil sector are likely to be more vulnerable in the present situation.
The CPPE noted further, “Nigerian firms with strong business links in the Middle East and those with strong supply chain linkages in the region would be vulnerable at this time because of the current instability in the region.”
The organisation noted further that higher inflation rates may drive monetary authorities to respond to the inflation outcomes of current geopolitical headwinds.
“A tighter monetary policy regime is expected in Nigeria and other monetary jurisdictions. The expectation is that economies around the world may experience renewed pressures on interest rates. Higher global interests could adversely impact portfolio flows with implications for foreign reserves,” the CPPE statement stated.
More revenues for Nigeria
According to the statement, the escalations could boost Nigerian government revenues.
“The oil sector currently accounts for about 50% of government revenue. An improvement in crude oil price would therefore have a significant impact on government revenue. An improvement in revenue would positively impact fiscal consolidation and hopefully moderate the growth of the fiscal deficit,” CPPE stated.
If the conflicts persist, oil and gas sector investments would experience better returns, CPPE noted.
What you should know
Nairametrics previously reported that the fresh wave of geopolitical tensions in the Middle East may soon translate into higher fuel prices in Nigeria as global oil markets react to Israel’s recent airstrikes on Iranian nuclear facilities.
- On June 12, Israel launched rounds of attacks on several locations in Iran, including the Natanz nuclear site and Tabriz.
- Prime Minister of Israel Benjamin Netanyahu said strikes targeted Iran’s nuclear and ballistic missile programs and that the operation would continue until the threat was removed.
- Hours after the first Israeli strikes, Tehran launched more than 100 drones.
On Saturday, June 14, 2025, the Federal Government called for an immediate end to hostilities between the Islamic Republic of Iran and the State of Israel, urging both parties to exercise maximum restraint in the interest of regional and global peace.
