Business
Israel-Iran Conflict Threatens Nigeria’s Economy – CPPE
Policymakers should begin to explore fiscal policy options to bring down costs in the economy.
The Centre for the Promotion of Private Enterprise (CPPE) says the ongoing conflict between Israel and Iran could lead to significant economic disruptions in Nigeria, including increased inflation, rising energy costs, and tighter credit conditions.
On June 13, Israel launched a fusillade of attacks targeting Iran’s nuclear programme and military leadership.
Israeli defence officials said the missiles killed members of Iran’s general staff, including Hossein Salami, commander-in-chief of Iran’s Islamic Revolutionary Guard, and several senior nuclear scientists.
In response, Iran unleashed ballistic missiles into Israeli territory as explosions were heard over Tel Aviv and Jerusalem on Friday night.
In a statement on Sunday, Muda Yusuf, the chief executive officer (CEO) of CPPE, said while the crisis could boost Nigeria’s oil earnings in the short term, the broader implications for inflation, interest rates, and global trade remain worrying.
“The outbreak of war between Israel and Iran has added a troubling dimension to the challenges of an already floundering global economy,” Yusuf said.
“For the Nigerian economy, the implications are mixed. The development portends a combination of risks and upsides for the economy.”
PETROL, DIESEL PRICES TO RISE ON GLOBAL ENERGY SHOCK
The CPPE chief said global oil prices have jumped 15 percent in the days following the conflict, rising from $65 to $75 per barrel.
This, he noted, would lead to a corresponding spike in the cost of petrol, diesel, jet fuel, and gas in Nigeria — with implications for inflation and business margins.
“Energy cost is a major factor in the Nigerian inflation equation. It impacts production, transportation, and power generation,” Yusuf said.
He warned that Nigerian firms may face “imported inflation” and higher borrowing costs as the central bank and other monetary authorities respond with interest rate hikes.
Despite the risks, Yusuf said Nigeria stands to benefit from stronger foreign exchange (FX) inflows and government revenue if oil prices remain elevated.
“With oil being Nigeria’s biggest forex earner, a sustained rise in prices would positively impact the country’s foreign reserves, ensure better liquidity and help stabilise the naira,” Yusuf said.
He added that the improved fiscal outlook could aid the government’s efforts at fiscal consolidation and narrow the deficit.
The think tank also flagged potential risks to local firms with trade or supply chain links in the Middle East, adding that investors may increasingly seek safe-haven assets, leading to stock market volatility in other parts of the world.
However, the economist said the Nigerian stock market, which historically responds positively to oil price booms, may buck that trend.
“The outlook for the Nigerian stock market is therefore likely to be positive in the current context,” he added.
The CPPE cautioned that oil revenue gains could fuel excess liquidity in the economy if not well managed, warning of exchange rate pressure and inflationary risks if the central bank fails to sterilise monetised oil receipts.
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The Nigerian currency, Naira (₦), continued its battle against the United States dollar at the official foreign exchange market on Saturday.
Daily Voice reports that data from the Central Bank of Nigeria (CBN) showed that the local currency sold at ₦1,321.2160/1$ on Sunday.
The latest rate is the same as Saturday’s rate of ₦1,321.2160/1$.
At the parallel market (black market), however, the naira closed on Sunday at ₦1,400 to the dollar.
The offers by commercial banks, Bureau de Change (BDC) operators, and other foreign exchange dealers may, however, differ from the reference rates due to transaction margins and prevailing demand and supply conditions.
Market participants will continue to monitor foreign exchange inflows, demand for dollars, and CBN policies for indications of whether the naira can sustain its gains through the month.
Cement prices in Nigeria remain elevated, with a 50kg bag selling for between ₦12,000 and ₦15,000 in many markets, putting further pressure on builders, contractors and Nigerians planning construction projects.
The latest market data shows that although some brands are currently available below the ₦15,000 mark, the industry remains significantly more expensive than it was at the end of 2025 and early 2026.
Recent market quotations show the following indicative prices for a 50kg bag:
Note: prices may vary by location and transportation costs.
These figures are based on a September 1 market report and can vary depending on location, transportation costs, dealer margins and supply conditions.
However, July industry data painted a more expensive picture. CementNet reported retail prices of ₦12,000 to ₦15,000, with Dangote selling for about ₦13,000–₦15,000, BUA at ₦12,000–₦14,500, and HBM Nigeria, formerly Lafarge Africa, at ₦12,000–₦13,500.
The latest figures suggest that cement prices may have eased from the highest quotations seen earlier in the year, but the broader trend remains upward.
In July, The Guardian reported that a 50kg bag typically sold for ₦12,500–₦15,000 across major markets including Lagos, Abuja and Abia.
The Federal Competition and Consumer Protection Commission (FCCPC) also reported that prices had reached between ₦13,000 and ₦15,000 in some locations during the first half of 2026.
This means the current ₦12,000–₦14,000 quotations for several major brands should be viewed as some market-level moderation rather than a broad collapse in cement prices.
Why cement remains high
High energy and transportation costs continue to weigh heavily on the industry. Cement manufacturing requires significant amounts of energy, while moving cement from factories and depots to retail markets adds further costs.
Location is also playing an important role. Buyers in areas farther from production centres can pay substantially more because of haulage and distribution expenses.
The situation is particularly significant because Nigeria has substantial cement production capacity, yet retail prices remain high. The Guardian reported that domestic production exceeds consumption, with surplus output exported to neighbouring countries.
Nigerian civil servants on Grade Level 8 now earn between N1,479,276 and N1,914,514 annually, depending on their step within the scale, following the new minimum wage signed under President Bola Tinubu’s administration.
The figures fall under the Consolidated Public Service Salary Structure (CONPSS), the framework that governs pay across Nigeria’s federal civil service.
CONPSS covers 17 grade levels in total, and a worker’s position within each level is shaped by their qualifications, length of service, and performance record.
Grade Level 8 has 14 steps, with each step representing a progression in earnings. Below is the full breakdown:
The gap between the lowest and highest steps at this level amounts to N435,238, reflecting how significantly length of service can affect take-home pay within a single grade.
Interest in the salary structure has grown since Tinubu’s government approved a new national minimum wage, which triggered a review of earnings across the public sector. Civil servants and job seekers have been keenly examining each grade level to understand what the adjusted structure means in practical terms.
Workers at Grade Level 8 are typically mid-level employees with some years of experience in the civil service. Their earnings sit above the entry-level grades but below the senior cadre, making this level a reference point for many who are planning career progression within the federal workforce.
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