The world had just rounded up Christmas and New year festivities and were just settling into 2020 when news of the killing of the second in command, an Iranian military major General and commander of the Islamic Revolutionary Guards Corps (IRGC), Qassem Soleimaini. He was killed by an American drone in a targeted air strike in Baghdad, Iraq. The deputy head of Iraqs Popular Mobilisation Force, a paramilitary chief, Abu Mahdi al-Muhandis was also killed in this strike.
This action by America has stoked the fire in a hitherto breeding conflict between the two countries that dates as far back as 1953 as a result of an American sponsored coup. Following the strike by America, the Iranian Supreme Leader, and Ayatollah Ali Khamenei has issued threats of revenge and has also pulled out of its nuclear deal commitment. The 2015 nuclear deal Iran entered into in agreement with World powers was to limit enrichment of Uranium, a major component of nuclear weapons. The Iraqi parliament has also voted to remove US troops from Iraq with the US warning in return that it will lose access to its key bank account domiciled with the Federal Reserve Bank of New York if the troops are asked to leave. Subsequently, Iran “unintentionally” fired a missile at a Ukrainian air passenger plane killing over 170 souls on board.
This ongoing conflict between these two countries has effects on both the economy of Nigeria and its security. The Islamic Movement in Nigerians which consists of Shi’ites who are Pro-Iranian protested Soleimaini’s killing in Abuja and burnt the US flag. It is important to remember that the Nigerian government has been in serious conflict with the Shia sect over its detention of their leader, El Zakzaky and his wife. In October 2010, an Iranian speculated to be a member of the Iranian Revolutionary Guard Corps was caught in Apapa Port trying to smuggle in 13 containers of weapons. It is unclear whether the containers were meant for Nigeria or in transit and the extent of Iranian operations in Africa is yet to be determined. Nigeria’s poor security and Intel may not be able to handle or stop attacks in targets associated with America in Nigeria if adequate measures aren’t put in place. Commendably, the Inspector General of Police has placed the entire police command on red alert nationwide. Boko Haram and the Islamic State in West Africa Province may want to use this opportunity to hit more targets thereby increasing terrorist activities. Security is critical and its is imperative that the necessary measures and Intel are put in place by all security agencies and their budgets should also be review.
On the upside, there has been an increase in oil prices as the price of Brent crude was $70 on Monday, 6th of January, the highest its been in several months since the drone attack on a major Saudi oil facility last year. Iran is OPEC’s second largest exporter and the world’s fourth largest oil producer. The fear that the US Air strike that killed Soleimaini may prompt retaliation and disturb oil prices has caused there to be a spike in oil prices. This spike would aid Nigeria in boosting its budget especially with its financial situation and proposed borrowing plans. However, we cannot make solid plans based on the sudden oil price hike caused by the jitters as a result of this feud. Following the $70 price, prices still dipped some days after. A prolonged spike in oil prices is however not in our best interest as this would cause problems for producers and in turn increase the prices of petroleum products. This would affect us as we import over 80% of our petroleum products and would inadvertently spend more money importing petroleum products than we would make from selling oil.