Middle East war: NECA raises alarm over looming business closures, job losses

2026-03-23 - 11:14

...Says soaring fuel costs could cripple economy ...Urges immediate government action to save situation By Victor Ahiuma-Young The Nigeria Employers’ Consultative Association, NECA, has raised fresh concerns over the worsening impact of rising global oil prices on the nation’s economy, warning that businesses and households are facing mounting pressure as energy costs surge. The development, driven largely by ongoing war in the Middle East, is pushing domestic fuel prices higher and deepening inflationary challenges across the country. NECA noted that the spike in crude oil prices, rather than translating into economic gains, is creating a paradox in Nigeria, where increased oil revenues are accompanied by rising production and living costs. This trend, the umbrella body for employers warned, is eroding purchasing power, squeezing profit margins, and threatening the survival of businesses across key sectors. Speaking in Lagos, the Director-General of NECA, Mr. Adewale-Smatt Oyerinde, described the situation as alarming, stressing that the current trajectory could trigger widespread economic hardship if urgent measures are not taken. “What we are witnessing is Nigeria’s oil paradox. Rising crude oil prices are pushing up domestic energy costs, squeezing businesses and worsening the cost of living for citizens,” he said. He pointed out that fuel prices have surged sharply in recent days, with petrol selling above ₦1,300 per litre in some areas, while diesel prices are approaching ₦1,800 per litre, underscoring the direct impact of global oil market fluctuations on the domestic economy. Oyerinde emphasized that energy costs remain central to economic activities, noting that any increase in fuel prices has immediate and far-reaching consequences. “Once fuel prices rise, the effects are immediate and widespread, transport costs increase, food prices rise, and the overall cost of doing business escalates,” he stated. He further warned that businesses, particularly in manufacturing, agriculture, and logistics, are already under severe strain as operating costs continue to climb. “For many firms that rely on diesel for operations, current price levels are becoming increasingly difficult to sustain. Profit margins are shrinking, and businesses are being forced to either pass on costs or scale down operations,” he added. The NECA Director General explained that while the Middle East crisis has contributed significantly to the surge in global oil prices, the situation has also exposed longstanding structural weaknesses within Nigeria’s energy sector, including underinvestment, poor infrastructure, and supply inefficiencies. “This situation is not only driven by external factors; it is also reflecting ongoing constraints within the energy value chain, including supply inefficiencies and infrastructure limitations,” Oyerinde said. He cautioned that failure to address these challenges promptly could lead to dire consequences for the economy. “If this trend continues unchecked, we risk business closures, job losses, and a deeper cost-of-living crisis,” he warned, while calling on the government to urgently stabilise the downstream sector and provide targeted support for vulnerable industries. He also stressed the need for long-term reforms, noting that Nigeria’s economic resilience will depend not on oil price movements, but on how effectively the country manages its resources and addresses systemic challenges. “This is a moment to strengthen institutions, improve transparency, and invest in sustainable energy solutions,” he said, adding that without proper management, the potential gains from rising oil prices could be completely eroded by inflation and economic hardship.