The Nigerian Economic Summit Group (NESG) has warned of the implications of the Russian-Ukraine war, citing that tensions have triggered global supply chain disruptions, largely affecting countries including Nigeria exposed to trade with the warring nations.
The NESG disclosed this in a report titled “Implications of Russia-Ukraine War: Risks and Opportunities for Nigeria” on Sunday, according to the News Agency of Nigeria.
They also urged FG to take advantage of the benefits of the African Continental Free Trade Area agreement (AfCFTA) and ensure effective border control to soften the impact of the fallout of the Russian invasion of Ukraine.
What the NESG is saying
The group stated that the Russian invasion of Ukraine is expected to reduce Nigeria’s trade volume with both Russia and Ukraine, citing that supply chain disruptions caused by the war have negatively affected Nigeria.
They added that the war will also disrupt Nigeria’s access to global economy through trade, finance, commodity, technology transfer channel, foreign policy channel and migration channels
“The tensions have triggered global supply chain disruptions, largely affecting countries exposed to trade with the warring nations.
“Uncertainties will make investors seek safe-havens, and this could prompt capital outflows from emerging markets, including Nigeria.
“Constraints to supply due to the geopolitical tension have pushed up global commodity prices. This will generally fuel global inflation,” it said.
It added that Nigeria’s alliance with Russia could suffer a setback due to fears that she might face sanctions from the West like those on Russia, citing that the war had also affected millions of migrants in Ukraine, including about 4000 Nigerians who are currently studying in Ukrainian universities.
The NESG urged the government to take certain key action points to mitigate the impact of the crisis on the Nigerian economy, such as;
- Removing the constraints to agricultural productivity to improve food security and supporting value chain development to ensure that primary products are processed locally before they are exported.
- Implementing the Petroleum Industry Act in a holistic manner is key to attracting huge investments into Nigeria’s oil and gas sector.
- Leveraging the benefits of the African Continental Free Trade Area agreement (AfCFTA) and ensuring effective border control, and
- Removing capital controls and encouraging the inflow of stable investments, such as Foreign Direct Investment.
What you should know
- Recall Nairametrics reported that Nigeria’s inflation rose to 15.92% in March 2022, following a similar uptick recorded in the previous month as a result of the increase in energy prices due to the war.
- The consumer price index, which measures the rate of inflation rose by 15.92% year-on-year in March 2022, which is 0.22% points higher than the 15.7% recorded in the previous month (February 2022). On a month-on-month basis, the headline index increased by 1.74% in March 2022, compared to 1.63% increase recorded in the previous month.
- Food inflation rose to 17.2% in the review month, an uptick compared to the 17.11% recorded in the preceding month. This rise in the food index was caused by increases in prices of Bread and cereals, food product, Potatoes, yam and other tubers, Fish, Meat, Oils and fats.