SBM Intelligence cautions Nigeria and West Africa that the Israel-Iran conflict may result in a decline in foreign direct investment and portfolio inflows.
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The Israel-Iran confrontation may cause a significant decline in portfolio inflows and foreign direct investment (FDI) into the economies of Nigeria and other West African countries.
In its most recent analysis, “The Escalating Iran-Israel Conflict and its Implications for West Africa,” SBM Intelligence takes this stance.The corporation claims that “a rise in direct military confrontation between Iran and Israel has sparked serious international alarm, resulting in a complicated and dangerous scenario with implications for both international security and the global economy.” This poses both short-term economic opportunities and serious long-term political and security threats for West Africa.
Global oil prices sharply increased as a direct result of the fighting, with Brent crude rising more than 4% from $69.36 to $74.23 per barrel.
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According to the group, “This price increase offers a volatile windfall for Nigeria, whose 2025 budget is benchmarked at $73 per barrel, potentially increasing national revenue and relieving urgent fiscal pressures.”
The report also pointed out that this situation could seriously jeopardize regional currencies and further erode investor trust. “Geopolitical instability erodes investor confidence, prompting a flight to safer assets,” the research stated. This results in a precipitous drop in portfolio inflows and foreign direct investment (FDI) for Nigeria and Ghana, which halts projects, slows the development of jobs, and may raise the cost of borrowing for sovereign governments.
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The report further warns that the conflict has the potential to turn the West African region “fragmenting into distinct geopolitical camps”.
This is because this “divergence renders a coordinated regional response impossible, leaving every state more vulnerable to the conflict’s economic and security repercussions,” the report noted.
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