The Nigerian business economy is under renewed strain as the ongoing war between the United States and Iran, which erupted on February 28, continues to ripple through local markets. Traders like Salewa Tokunbo, a Lagos-based frozen food seller, have seen customer demand slump while energy and operational costs skyrocket. “Frozen turkey prices are so high. A carton is around N100,000, and I’m not sure customers can afford it,” Tokunbo lamented, highlighting the immediate impact of global events on daily business operations.
Fuel costs, a key driver of business expenses, have surged dramatically since the conflict began. Data tracking petrol prices between late February and early April shows an increase from N830 per litre to roughly N1,300, representing a 63 percent jump. Diesel has also risen from N1,100 to around N1,550 per litre. According to Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), “Higher international crude prices feed directly into petrol, diesel, and aviation fuel costs, leading to higher food distribution expenses, rising pump prices, and increased transportation and logistics costs.”
These energy cost hikes have quickly translated into higher prices for transportation and goods. Intra-city fares in Lagos rose from N200–N300 to N550, while Abuja fares climbed to N900 on some routes. Inter-state trips, such as Lagos to Ibadan, now cost around N2,500 compared to N1,500 before the war. Freight costs have also jumped by more than 50 percent, making it more expensive to move goods across major cities. Muhammed Magaji, president of the All Farmers Association of Nigeria (AFAN), warned that these increases will inevitably push food prices higher due to rising logistics expenses.
The economic shock is compounded by gaps in market intelligence among traders. A survey by SB Morgen Intelligence found that over 50 percent of Nigerian traders first learned about the war through WhatsApp or social media, with only 44.5 percent hearing news from family or friends. This limited awareness, coupled with a lack of focused government communication, leaves many businesses unprepared to manage the crisis. Analysts say the absence of a clear national strategy to mitigate economic fallout deepens uncertainty for both traders and consumers.
Despite improvements in inflation rates earlier this year, the war threatens to reverse recent economic gains. Headline inflation had eased to 15.06 percent in February 2026, down from 23.18 percent in the same period last year, and food prices had stabilized due to better harvests and logistics. However, sustained fuel and transport cost increases risk intensifying cost-of-living pressures and could erode household purchasing power, signaling a challenging period ahead for the Nigerian business economy.
source: Business day