The Nigerian Economic Summit Group (NESG) has urged the Federal Government to take necessary steps to take advantage of the Russia-Ukraine war, while avoiding economic risks.
This is contained in an NESG report titled: “Implications of Russia-Ukraine War:
Risks and Opportunities for Nigeria”.
According to the News Agency of Nigeria, Russia and Ukraine, which were carved out of the defunct Soviet Union, have had a history of conflicts.
These culminated into Russian invasion of Ukraine, resulting to a full- blown war on Feb. 24.
NAN recalls that data by the National Bureau of Statistics (NBS) indicated that Russia was among Nigeria’s top ten import trading partners in the third quarter of 2021.
This suggests that the persistence of the crisis would reduce the volume of trade between both countries.
Similarly, Ukraine is part of Nigeria’s top 10 import locations in the fourth quarter of 2021.
The war could, therefore, induce supply chain disruptions and negatively affect import supplies to Nigeria until both countries reach a truce.
According to the NESG, the key transmission channels of the crisis to the global economy and Nigeria include trade channel, financial channel and commodity price channel.
Others are technology transfer channel, foreign policy channel and migration channel.
“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.
The group said that the crisis would also hinder further procurement of expertise and equipment from Russia.
“Nigeria’s alliance with Russia could suffer a setback due to fears that she might face sanctions from the West like those on Russia,” it said.
It said 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 steps include 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.
” Removing capital controls and encouraging the inflow of stable investments, such as Foreign Direct Investment,” it said.