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Nigerian investments and interest rates are at risk due to the Israel-Iran conflict, according to CPPE

June 17, 2025

Nigeria risk — Nigerian investments and interest rates are at risk due to the Israel-Iran conflict, according to CPPE

Nigerian investments and interest rates are at risk due to the Israel-Iran conflict, according to CPPE

The protracted confrontation between Israel and Iran may have significant effects on Nigeria’s economy, particularly on businesses and monetary stability, according to the Centre for the Promotion of Private Enterprise (CPPE).

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Dr. Muda Yusuf, the CEO of CPPE, issued a warning in a recent statement that the geopolitical unrest in the Middle East could lead to a surge in oil prices worldwide, exacerbate inflationary pressures, and make monetary policy more difficult for Nigeria’s financial institutions.

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High energy costs, increased inflationary pressures, and a rise in interest rates are all obstacles that could jeopardize the economy’s enterprises’ viability, according to the statement. Given the current circumstances, investors in non-oil sectors are probably more at risk.

Because of the current volatility in the region, the CPPE added, “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.”

The organization added that monetary authorities may react to the inflationary effects of present geopolitical headwinds if inflation rates rise.

Nigeria and other monetary jurisdictions are anticipated to implement a stricter monetary policy framework. It is anticipated that interest rate pressures may reappear in economies all over the world. Increased global interest rates may have a negative effect on portfolio flows, which could have an effect on foreign reserves, according to the CPPE statement.

Increased income for Nigeria
The escalations could increase Nigerian government revenue, the statement said.

“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.