Nigeria’s economic stability faces a fresh challenge following the Trump administration’s announcement of a 14 per cent tariff on Nigerian exports to the United States.
The measure is part of a broader protectionist initiative aimed at rebalancing trade relationships globally, and has raised alarm over the future of the African Growth and Opportunity Act (AGOA), a key trade framework that has supported Nigerian exports since 2000.
According to financial experts at Cowry Asset Management Limited, the tariff places Nigeria’s preferential trade access under AGOA in jeopardy.
The analysts warned that the development threatens to undo years of progress in expanding exports of apparel, agricultural products, and manufactured goods to the U.S. under the duty-free scheme.
Economists had cautioned that the tariff escalation could stifle global trade growth, raise consumer prices, and trigger retaliatory measures from affected nations, including China and the European Union.
With Nigeria’s 2024 exports to the U.S. valued at N5.52trn, and imports largely comprising crude oil, butanes, and used vehicles totaling N4.07trn, the analysts noted that the new policy could disrupt an already fragile balance of trade.
The firm warned that the tariffs could slash Nigeria’s foreign exchange earnings, particularly from non-oil sectors, potentially intensifying the country’s FX liquidity crisis.
According to the experts, the Central Bank of Nigeria may be forced to dip further into its reserves or implement stricter currency controls.
“Nigeria’s economy is now exposed to a potential foreign currency crunch,” the firm stated, adding that rising import costs—especially for wheat, pharmaceuticals, and machinery—could worsen inflation, elevate input costs, and further erode consumer purchasing power.
Beyond trade, U.S. investments in Nigeria span sectors such as oil, technology, and finance, with major players like Chevron, ExxonMobil, and Microsoft maintaining a strong market presence.
The analysts caution that escalating trade tensions could undermine investor confidence and strain diplomatic relations if not carefully managed.
They also noted that President Trump’s tariff strategy, while aimed at supporting American industries, may compel Nigeria to explore alternative trade alliances with global blocs such as China, the European Union, and BRICS, prompting a strategic realignment in foreign policy.
As the U.S. redefines global trade norms, the test for Nigeria will be its ability to adapt its policies, diversify trade partnerships, and safeguard its economic resilience in the face of increasing external pressures.
