On Thursday, February 24, the long-running tensions between Russia and Ukraine descended into a full-blown war. Russian troops crossed into Ukraine, and the latter’s army mobilized to face the incoming threat. It was the start of the most violent conflict in Europe since the turn of the century.
Observers from across the globe have watched it unfold, and wondered what the outcome of the clash would be for the countries involved. For Ukraine, perhaps physically devastated cities; for Russia, an economy weakened by sanctions imposed on it by the West and its allies.
Thousands of miles away, people in Nigeria have followed the situation with keen interest. But while we’ve paid a fair deal of attention to the possible fate of the countries at war, not as much has been said about how the conflict could affect Nigeria. There’s an implicit assumption by many in these parts that the war poses little or no risk for nations a long way off from the war.
But this isn’t the case.
While Nigeria appears far removed from the battlegrounds of Kyiv or Kharkiv, it’s linked to Ukraine and Russia by trade (at the very least), as it is to the rest of the world. Any disruption to this trade– which can be caused by war –is bound to have significant consequences for us.
We’ll have a look at one such consequence for Nigeria below.
Rising Oil Prices And The Petrol Subsidy
As it turns out, Russia is the world’s third-largest oil producer, contributing about 11% of crude oil supplies. Ukraine is also an important transit point for global oil shipments. A disruption to the supply of oil enabled by these two countries will make the product less available, and cause its price to rise. That’s exactly what has happened.
Even prior to the war breaking out, the widespread fear of a conflict occurring was already driving crude oil prices higher. And in the days since the war began, crude oil prices have shot up even further. As of the time this article was written, Brent Crude, the benchmark against which the price of Nigeria’s crude oil is set, has crossed $110 per barrel. That’s the highest it’s been since 2014.
This ought to be good news for Nigeria, a country that earns a majority of its export income from crude oil sales. Higher oil prices should translate to greater revenues. But because Nigeria doesn’t refine its oil (due to the fact that its refineries aren’t functional), it has to import most of the petroleum that it needs. The result? It spends its revenues on the importation of refined petrol.
Then there’s the subsidy on petrol (Premium Motor Spirit, or PMS). The Nigerian government has already budgeted ₦3 trillion to cover the cost of petrol subsidy in 2022. With the sharp rise of oil prices, Nigeria will be spending far more on petrol imports and subsidies. The higher oil prices will be a net negative for the country.
Nigeria could either choose to fund the subsidy with more debt or eliminate it. If oil prices hold at their current levels or rise even further, the government may adjust petrol pump prices upward, or let it be determined by market forces. In either scenario, we’ll have to pay more than the present official pump price for petrol.
Wheat, Steel, And More
We should be concerned about more than just PMS.
Earlier, we referred to the trade between Nigeria on one hand and Russia and Ukraine on the other. Here’s where we take a closer look at them.
Russia is the world’s largest wheat exporter. Data from the Observatory of Economic Complexity (OEC) indicates that it sold $8.14 billion worth of wheat at the international markets in 2019 alone. It’s also Nigeria’s third-biggest source of commodity, with about ₦898.2 billion worth of wheat imported from that country between January and September 2021 (according to the National Bureau of Statistics).
The ongoing war between Russia and Ukraine is expected to disrupt wheat supplies from Russia. The resulting undersupply of wheat could push wheat prices higher, and make it more expensive for importing countries like Nigeria. We may see a hike in the price of wheat-based items like flour, bread and pasta soon.
Something similar may happen with steel. In 2020, Nigeria imported $124.6 million and $112.46 million worth of steel from Ukraine and Russia respectively (as reported by the UN COMTRADE database). With Ukraine now at war, we would be forced to seek an alternative source for the steel that it provides. In the meantime, steel prices may climb, and so will the structures which it’s used to make or build.
Nigeria exports far less to Russia and Ukraine than it imports from them. Although the individual businesses that supply materials like plastics and rubber to Ukraine or fish and fruits to Russia may struggle, the effect of the disruption to the trade in these commodities will pale in comparison to the uncertainties related to imports.
A Summary Of Outcomes
This isn’t the most convenient time for Nigeria to face challenges like the ones that could result from the Russia-Ukraine war. They have the potential to exacerbate an already aggressive inflationary trend and threaten the economy’s slow and fragile growth.
But we can hope that the government and its policymakers will have the courage to take the actions required to tow the economy off a problematic course and drive it down a path that leads to a more promising future.
Featured Image Source: BloombergGot a suggestion? Contact us: editor@connectnigeria.com
You might also like:
- Top 10 Questions About Club Connect, Answered
- Choosing a Corporate Social Responsibility Project
- Connect Nigeria Business Mixer: Meet The Speaker
- 6 Steps to Reducing Your Customer Acquisition Costs
dissertation help methodology
[url=”https://accountingdissertationhelp.com”]professional dissertation help[/url]
dissertation proposal writing services
dissertation writing and editing
[url=”https://bestdissertationwritingservice.net”]phd dissertation editing help[/url]
writing dissertation service
tips for writing a dissertation
[url=”https://bestdissertationwritingservice.net”]help me[/url]
essay writing services 2019
dissertation writing services uk
[url=”https://businessdissertationhelp.com”]dissertation abstract[/url]
writing a proposal for your dissertation
mathematics dissertation help
[url=”https://customdissertationwritinghelp.com”]how to write a dissertation proposal[/url]
getting help online
doctoral dissertation help history
[url=”https://customthesiswritingservices.com”]paper writing service[/url]
masters dissertation writing services
writing help
[url=”https://dissertationhelperhub.com”]dissertation proposal template[/url]
best dissertation writing service uk
writing editing service
[url=”https://dissertationhelpexpert.com”]masters dissertation[/url]
dissertation writing service online
dissertation help service general
[url=”https://dissertationhelpspecialist.com”]dissertation service[/url]
writing a doctoral dissertation
custom dissertation writing help
[url=”https://dissertationwritingcenter.com”]writing a masters dissertation[/url]
tips for dissertation writing
phd dissertation
[url=”https://examplesofdissertation.com”]dissertation proofreading services[/url]
help dissertation dissertation help
online casino with free signup bonus real money usa
[url=”https://1freeslotscasino.com”]internet casino bonus[/url]
best usa casinos
dissertation writing software
[url=”https://helpwithdissertationwritinglondon.com”]professional writing service[/url]
dissertation acknowledgement sample
best casino welcome bonus
[url=”https://1freeslotscasino.com”]best casino online[/url]
best casino deposit bonus
dissertation literature review
[url=”https://professionaldissertationwriting.com”]help dissertation thesis advice[/url]
phd dissertation editing help
free online games to win real money no deposit
[url=”https://9lineslotscasino.com”]real money no deposit casino[/url]
live online casino usa
dissertation writing service online
[url=”https://professionaldissertationwriting.org”]dissertation research[/url]
dissertation format
online casino real money usa
[url=”https://all-online-casino-games.com”]online casino usa[/url]
mobile casino games
professional dissertation help
[url=”https://writing-a-dissertation.net”]uf dissertation award[/url]
dissertation proposal writing services
dissertation template
[url=”https://writingadissertationproposal.com”]edd dissertation topics[/url]
dissertation writing grants
no deposit slots for real money
[url=”https://casino8online.com”]mobile casinos[/url]
best online casino bonus
wild casino online
[url=”https://casino-online-jackpot.com”]casino win real money[/url]
online casino for real money
play mobile casino
[url=”https://casino-online-roulette.com”]best us online casino[/url]
online casino best welcome bonus
best casino site
[url=”https://cybertimeonlinecasino.com”]casino free bonus[/url]
us casino
mobile casino games for real money
[url=”https://download-casino-slots.com”]online us casinos[/url]
free online casino bonus
bonus casino
[url=”https://firstonlinecasino.org”]win real money online[/url]
mobile casino games
deposit casino bonus
[url=”https://free-online-casinos.net”]gambling bonuses[/url]
top usa online casinos
best free vpn for macbook
[url=”https://freehostingvpn.com”]vpn free online[/url]
p2p vpn free
win real money online casino
[url=”https://internet-casinos-online.net”]free no deposit bonus[/url]
free bonus no deposit
best vpn services
[url=”https://freevpnconnection.com”]how to create a vpn[/url]
do i need a vpn
win real money online
[url=”https://newlasvegascasinos.com”]best online us casinos[/url]
mobile gambeling
secureline vpn
[url=”https://imfreevpn.net”]vpn buy account[/url]
vpn reviews cnet
online gambling reviews
[url=”https://onlinecasinofortunes.com”]casino games for money[/url]
free casinos bonus
whats the best vpn
[url=”https://imfreevpn.net”]free vpn for pc windows 10[/url]
free vpn for fire stick
free casino money
[url=”https://onlinecasinosdirectory.org”]no deposit sign up bonus[/url]
bingo online for money
best vpn for chrome free
[url=”https://ippowervpn.net”]buy residential vpn[/url]
best windows vpn
no deposit bonuses
[url=”https://onlineplayerscasino.com”]top online casinos[/url]
top casino site
biggest online casino bonus
[url=”https://ownonlinecasino.com”]usa casinos[/url]
online casino reviews usa
tunnel bear vpn
[url=”https://shiva-vpn.com”]vpn ghost[/url]
free secure vpn
bester online casino bonus
[url=”https://trust-online-casino.com”]best casino online[/url]
best casino sites
strong vpn
[url=”https://superfreevpn.net”]free vpn app windows[/url]
free vpn apps
best usa online casinos
[url=”https://trust-online-casino.com”]usa online casino[/url]
blackjack payout
best secure vpn
[url=”https://superfreevpn.net”]best vpn for downloading[/url]
what is a vpn connection
online casinos usa
[url=”https://trust-online-casino.com”]casino bonus no deposit[/url]
no deposit sign up bonus
online casino signup bonus no deposit
[url=”https://vrgamescasino.com”]no deposit slots for real money[/url]
free online casino no deposit
good gay chub dating sites
[url=”https://datinggayservices.com”]interracial dating gay[/url]
best gay dating
interracial dating site
[url=”https://adult-classifieds-online-dating.com”]on line free dating[/url]
best dating websites online
dating app for gay country men
[url=”https://gay-singles-dating.com”]dating site for gay men over 50[/url]
gay boys free dating websites
free online chat and dating sites
[url=”https://adult-classifieds-online-dating.com”]best online dating service[/url]
american dating
free sites of dating
[url=”https://adult-singles-online-dating.com”]dating flirt site free[/url]
date free internet
top dating online sites
[url=”https://datingpersonalsonline.com”]singles website for farmers[/url]
single women phone numbers
busted for using someone’s photo in a gay dating website
[url=”https://datinggayservices.com”]gay fetish dating app[/url]
hiv gay black men dating sites
adult dating site
[url=”https://freeadultdatingpasses.com”]find online dating[/url]
dating free
gay dating hookup
[url=”https://gayedating.com”]bear gay dating site[/url]
best gay dating sites usa
farmersonly
[url=”https://freephotodating.com”]zoosk dating site[/url]
asian dating chat
torrington ct gay dating
[url=”https://gay-singles-dating.com”]cruise gay dating[/url]
naked gay dating
meet women for free online
[url=”https://lavaonlinedating.com”]online dating site crossword[/url]
flirting dating site
free slots for mac
[url=”https://casinosonlinex.com”]real casino games[/url]
bingo online for money
website dating service
[url=”https://onlinedatingbabes.com”]japanese dating sites[/url]
best dating sites for free
top usa online casinos
[url=”https://online2casino.com”]free no deposit casino[/url]
online bingo real money
google zoom gay chat rooms
[url=”https://chatcongays.com”]gay chat rooms on aol town square[/url]
gay chat avenue without registration
single free dating sites without registering
[url=”https://onlinedatingservicesecrets.com”]international dating site usa[/url]
sabrina carpenter boyfriend
gay chat rooms, san diego
[url=”https://free-gay-sex-chat.com”]gay male chat[/url]
teen chat rooms 13-16 gay
free gay bays chat
[url=”https://gaychatcams.net”]free gay/bi chat[/url]
gay bi chat line
gay chat nebraska
[url=”https://gaychatnorules.com”]gay sex chat[/url]
zoom cam rooms gay chat
chat with gay men
[url=”https://gaychatspots.com”]gay video chat tumblr[/url]
gay chat room in my area
gay webcam and chat
[url=”https://gaychatspots.com”]gay chat avenue new version[/url]
indian gay chat
free live gay web cam chat roos
[url=”https://gayinteracialchat.com”]gay phone chat lines caribbean[/url]
gay chat phoenix
gay chat nyc
[url=”https://gay-live-chat.net”]live free gay web cam chat rooms[/url]
gay chat avenue
hot gay text chat
[url=”https://gaymanchatrooms.com”]gay chat rooms free[/url]
free gay chat line live
gay lesbian chat
[url=”https://gaymanchatrooms.com”]lady gaga gay chat emoji[/url]
free phx gay chat
gay teen boy chat
[url=”https://gaymusclechatrooms.com”]gay chat cam chat[/url]
chat gay con camra
first gay chat
[url=”https://gayphillychat.com”]japan gay teen boy chat[/url]
gay sex chat free
free gay bays chat
[url=”https://newgaychat.com”]gay chat rooms on aol[/url]
skype gay chat
dating relationships
[url=”https://online-internet-dating.net”]tinder dating site[/url]
juicydatessites
dating sims free online japanese adult
[url=”https://speedatingwebsites.com”]who is brent rivera dating[/url]
dating sifes
dating online chat and meet
[url=”https://virtual-online-dating-service.com”]free and best[/url]
datjng sites
senior singles chat
[url=”https://wowdatingsites.com”]completely free dating sites[/url]
connect singles
plenty of fish dating site of free dating
[url=”https://zonlinedating.com”]skip the games dating site free[/url]
free dating date
essay writing service scam
[url=”https://au-bestessays.org”]buy argumentative essay[/url]
argumentative essay help
essay write service
[url=”https://bestcampusessays.com”]online essay help[/url]
help me write a narrative essay
essay writers needed
[url=”https://besteasyessays.org”]help writing a essay[/url]
help in writing an essay
buy essay cheap
[url=”https://bestessayreviews.net”]help writing grad school essay[/url]
help with writing essays for college applications
essay on service
[url=”https://bestsessays.org”]custom essay meister[/url]
sat essay writing help
urgent custom essays
[url=”https://bestsessays.org”]academic essay writing service[/url]
the help essays
best essay writers
[url=”https://buyacademicessay.com”]best essay writer service[/url]
essay help introduction
custom writing essays
[url=”https://buy-eessay-online.com”]professional essay writing help[/url]
admission essay help
english essay helper
[url=”https://buytopessays.com”]help writing a essay for college[/url]
academic essay writing services
buy an essay online cheap
[url=”https://customcollegeessays.net”]mba admission essay writing service[/url]
academic essay writer
essay about service
[url=”https://customessays-writing.org”]top 10 essay writing services[/url]
write my college essay
admission essay service
[url=”https://customessaywwriting.com”]i need help writing an essay for college[/url]
essay online help
best essay writing website
[url=”https://customs-essays-writing.org”]help writing college essay[/url]
homework essay help
college essay help nyc
[url=”https://firstessayservice.net”]write my essay please[/url]
help writing essay
essay writer cheap
[url=”https://geniusessaywriters.net”]help write essay for me[/url]
best online essay editing service
essays about community service
[url=”https://howtobuyanessay.com”]english essay writers[/url]
cheap essays online
help with an essay
[url=”https://lawessayhelpinlondon.com”]application essay help[/url]
essay writing websites
write my essay 4 me
[url=”https://lawessayhelpinlondon.com”]essay title help[/url]
online essay writers
essay writing services reviews
[url=”https://lawessayhelpinlondon.com”]help in writing essay[/url]
someone write my essay for me
essay revision service
[url=”https://ukessayservice.net”]buy cheap essays[/url]
professional college essay writers
essay custom writing
[url=”https://writemyessaycheap24h.com”]in an essay help you guide[/url]
professional essay writing help
best writing essay
[url=”https://au-bestessays.org”]help for essay writing[/url]
help with scholarship essays
editing essay services
[url=”https://bestcampusessays.com”]the help book essay[/url]
essay writing service toronto
community service essay
[url=”https://besteasyessays.org”]admission essay editing services[/url]
essay correction service
urgent custom essays
[url=”https://bestessayreviews.net”]help writing grad school essay[/url]
cheap essay help
best essay writers review
[url=”https://bestessaysden.com”]college essay writing service reviews[/url]
write my essay paper
custom english essays
[url=”https://bestsessays.org”]cheap write my essay[/url]
write my essay for cheap
english essay helper
[url=”https://buyacademicessay.com”]help me to write an essay[/url]
buy my essay
essay writing services singapore
[url=”https://buy-eessay-online.com”]essay writing services usa[/url]
narrative essay help
custom essay writing reviews
[url=”https://buytopessays.com”]best essay writing service reviews[/url]
write custom essays
coursework plagiarism checker
[url=”https://brainycoursework.com”]coursework master[/url]
coursework history