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How Russia-Ukraine war will affect Nigerian economy

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Mrs Patience Key, the immediate past Chairman of Nigerians in Diaspora Organisation Americas (NIDOA), USA, says the Russo-Ukraine conflict will affect Nigeria, being an oil producing country.

Key said in New York on Sunday that the crisis would affect Africa’s economy and also threaten global economy.

She said Russia’s invasion of Ukraine had led to a sharp rise in global oil prices amounting to almost a 100 dollars per barrel and counting, if the tension deepens.

“This development without doubt will pose high implications for the Nigerian economy as the largest oil producing country in Africa. By extension, Africa will also feel the impact as its largest economy is affected.

“Russia happened to be among the first three largest oil producing countries in the world and the 11th largest economy globally, and by that its impact is felt in the global market as one of the major actors who determines the global economy.

“Its recent and continuous onslaught on Ukraine has moved her contemporaries like the U.S, U.K, etc. to placing strict economic sanctions on the country and her citizen’s investments outside the shores of Russia.

“This has a ripple effect on the economies of Nigeria and Africa,’’ she said.

According to her, an example is the ongoing bilateral discussions on the resuscitation of the Ajaokuta Steel Mill between the Federal Government and the Russian government.

Key said there were indices that the discussions could be frustrated and strained as the conflict between Russia and Ukraine progresses.

“Though the global oil prices surged as a result of the sanctions placed on Russia; the second largest oil producing country in the world, it adversely had placed Nigeria at an advantage as the largest oil producing country in Africa as demand for its crude oil rises.

“Amidst all that, economists are thrilled with mixed feelings over pointers showing that there are still strong indications that the inherent distortions in the Nigerian economy might eventually worsen and topple the already fragile economic condition,’’ she said.

The official said the conflict could be a blessing in disguise, noting that the conflict presently brings about an increase in global oil prices.

“I feel it is the right time for the Nigeria government to make some money as much as they consider and use the profit to pay-off, service some of our loans and grow the economy.

“Our already depleting foreign reserve can also be revisited and serviced for rainy days. If our foreign reserve is fatty, we wouldn’t be running to countries seeking for loans,’’ she said.

In addition, she said the development would also lead to an increase in the amount payable as ‘fuel subsidy’ which might consequently result to inflation and impact other sectors such as the external sector accounts and domestic economy.

“It might result in inflation and impact other sectors because while the Central Bank of Nigeria (CBN) may have enough supply to support the foreign exchange market over the short term, declining foreign inflows and weakening of the external reserves could force further currency depreciation.

“The impact of Ukraine’s invasion by Russia might also result to absence of investment from investors within and outside the country.

“This will slow the development of Africa especially on the competition to cope with the 4th industrial revolution.”

Key, a 2023 presidential aspirant on the platform of the Peoples Redemption Party (PRP), called on the two countries to embrace dialogue.

“The implications in case of another world war are unimaginable.

“War shouldn’t be a conceived or contemplated thought because in all sense, it is an abominable act against every living creation of God,” she emphasised.

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