- Says Tariff War Presents Export, Investment Opportunities For Nigeria
- Nigerian Coys Urged To Strategically Position For Imminent Supply Gaps
- Warns Diaspora Remittances Could Be Affected By Current Immigration Policy
The Centre for the Promotion of Private Enterprise (CPPE), has disclosed that the ongoing United States (US) trade tariff war has presented opportunities for Nigeria in exports and investments.
The CEO of the economic think-tank, Muda Yusuf, made this known in a statement titled “Trump Effect On The Nigerian Economy” sent to The Matrix Newspaper on Sunday, February 16, 2025.
It would be recalled that on February 2, 2025 Trump signed economic orders imposing significant new tariffs on Canada, Mexico, and China, which are the biggest trading partners of the US.
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In the statement, Yusuf explained the multi-dimensional implications of the US President Donald Trump administration’s policies on the Nigerian economy.
Yusuf explained that the sweeping imposition of trade tariffs on major US trading partners could weaken the global economic growth outlook, dampen global oil demand, and depress oil prices.
He also said the prospect of high inflation in the US due to the ongoing tariff war increases the likelihood of imported inflation from the US for products shipped to Nigeria.
“The Trump administration has demonstrated an unequivocal commitment to the ideology of economic nationalism, protectionism, deglobalisation, unilateralism and reciprocity, and fragmentation of the global economy,” he said.
“This has unleashed a flurry of retaliatory trade policy actions from a number of countries across a wide range of product groups, even by the close allies of the United States.
“Given the current trade policy disposition of the Trump Administration, African Growth and Opportunity Act (AGOA) faces the prospect of being terminated. Although Nigeria has very little to show for the opportunities offered by AGOA.
“Meanwhile, the tariff war offers some opportunities for export and investment for Nigeria, taking advantage of the gaps that the trade war may create in the countries involved, to the extent that Nigeria is not a victim of the tariff actions.
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“There is the prospect of high inflation in the USA as a result of the current tariff war.
“This thus creates a possibility of imported inflation from the USA for products imported from USA to Nigeria.”
The African Growth and Opportunity Act (AGOA) is a legislation approved in May 2000 by the United States congress to assist the economies of sub-Saharan Africa and to improve economic relations between the US and the region.
Yusuf explained that the trade war may create export opportunities for Nigeria by filling supply gaps that the tariff war could leave in the American market.
He said Nigerian companies could position themselves strategically to benefit from the imminent supply gaps.
“New bilateral and multilateral trade alliances are likely to evolve due to the ongoing trade war,” Yusuf said.
“The trade war may trigger a disruption of global supply chains, which may adversely affect the global economy, especially from a cost of supplies perspective for imported goods.
“President Trump perceives members of BRICS and their allies as United States adversaries, seeking to reverse the dominance of the dollar in the global financial order.
“This perception could shape the disposition of the Trump administration towards these countries.”
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The CEO further explained that diaspora remittances could be affected by the current immigration policy of the Trump administration.
Yusuf added that the United States has a huge number of diaspora Nigerians, estimated at 500,000, many of whom could be affected by the current immigration policy on documentation.
For crude oil supply, Muda warned that if Trump succeeds in ending the war, especially the Russian-Ukraine war, the prospects for growth in global oil output would be considerably heightened as Russia supplies about 10 mbd of oil to the global oil market. There is also a good chance that the current sanctions on Russia by the USA may be lifted thereafter as the relationship between the two countries normalizes.
“In light of these, the scenario of a weakening of crude oil prices in the near term is therefore very high.
“In this context, the crude oil price benchmark of $75 per barrel in the 2025 budget may not hold. This would impact the outlook for government revenue and foreign exchange earnings in 2025”.
In his advice to the government, Yusuf noted that there is a need for the government to commit more to the policy of self-reliance and less import dependence in critical areas of the economy, especially energy, food, pharmaceuticals and security. Excessive import dependence poses a major risk to economic and social security of a country.
“A key lesson is from the disruption is that no country should be too dependent on others for its strategic needs. It has once again underscored the risk of overdependence on other countries. The Covid experience offered a similar lesson. Therefore, there is a need to ensure that policies of government are geared towards ensuring economic resilience that minimizes vulnerabilities to external shocks”.
He further canvassed that supply chains should be localized as much as possible as the emerging new global order is progressively leaning towards economic nationalism, deglobalization and economic fragmentation.
“Domestic economic policies must be framed within the context of this reality. Nigeria’s trade and industrial policies are very critical to achieving this resilience.
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“The government must deepen backward integration through stronger intentionality to promote domestic production of goods and services as well as export development. The current economic reforms are already on course to ensure strategic structural shifts towards reducing dependence on imports.
“There should be a special emphasis on food security, energy security, health security and internal security, leveraging largely domestic resources” he added.
