This text is a part of TechCabal’s ongoing protection of the affect of Trump’s tariffs on Africa’s know-how panorama. Frank Eleanya, Ngozi Chukwu, Religion Omoniyi, and Muktar Oladunmade additionally contributed to this report.
The zero-interest period within the US noticed enterprise capital companies pour billions into rising markets, together with Africa, looking for outsized returns. However the US commerce tariff, paused for 90 days, may dampen non-oil export volumes, create unstable alternate charges, and gas inflation if or when resumed.
This might drive traders right into a ‘wait and see’ strategy by withdrawing from African markets, hitting sectors like e-commerce, logistics, agriculture, fintech, and know-how, the place most Nigerian startups function.
“The uncertainty would probably deter funding inflows into African startups, as potential traders assess the dangers concerned,” Temitope Omosuyi, a UK-based funding analyst, stated. “The affect will lengthen to most of their prospects, notably in logistics and cross-border funds.”
March 2025 noticed one of many lowest month-to-month enterprise capital funding into the African tech ecosystem since late 2020, with simply $50 million in funding introduced, in keeping with information from funding tracker Africa: The Large Deal. Funding additionally dropped 5% to $460 million in Q1 2025 from $486 million raised in the identical interval final yr. VC investments in Nigeria throughout sectors remained unchanged in 2024 ($410 million) and are the bottom since 2021.
Maya Famodu of Ingressive Capital, a pan-African enterprise capital fund, famous that within the quick time period, excessive tariffs imply inflation, and with the financial dominoes taking place within the West, she anticipates a recession.
“Recession means a patrons’ market and extra prudent and defensive funding technique for US-based institutional traders, which is not going to profit Africa,” she added.
However Tayo Oviosu, Paga’s CEO, believes that the tariffs is not going to have an outsized affect on funding for the continent’s tech ecosystem. He expects that whereas world capital flows might shift, investor urge for food for African startups may rise because of the tariffs.
“I feel traders will look to deploy capital now as a result of it’s a good time to spend money on the personal market towards the general public markets due to the inventory market decline,” he stated.
Earlier than the tariffs have been suspended, returns on U.S. treasury payments had risen as costs fell, pushed by elevated investor demand for safer asset courses throughout unsure occasions. Regardless of this shift to extra secure, lower-risk property, some traders assume this may drive extra funding to African startups.
“The tariff strategy can result in short-term gradual development and can lead traders to wish to purchase bonds, and that demand will result in decrease charges,” Oviosu added. “This, I feel, helps rising markets like Africa as a result of traders will need a mixture of security and returns; thus, they are going to allocate extra exterior of the US and in equities exterior of the US.”
Nigerian exporters stay optimistic regardless of tariffs
Below the African Development and Alternative Act (AGOA) laws, Nigerian exporters take pleasure in duty-free entry for non-oil sectors like agriculture and manufacturing. In accordance with information from the Nationwide Bureau of Statistics (NBS), non-oil exports greater than tripled to ₦309.1 billion ($196.6 million) in 2024 from ₦86.4 billion ($54.9 million) in 2023.
For small e-commerce gamers, the affect is rapid: a $100 bag of cassava flour now carries a $14 obligation. This might lower margins or elevate costs, relying on whether or not the vendor decides to bear the price or go it on to the client. The problem is whether or not smaller exporters, together with e-commerce startups exporting items and the availability chain suppliers facilitating their transport, can soak up or offset the hit.
Luther Lawoyin, CEO of PricePally, a grocery startup exporting to Nigeria’s diaspora, expects the rise in touchdown value to shock enterprise, however solely briefly. The rising demand for staples and the naira’s weak point towards the greenback imply companies can rapidly recalibrate for viability.
“We can make sense of it regardless of the preliminary friction, particularly for the reason that tariff just isn’t solely on Nigeria,” stated Lawoyin.
Malobi Ogbeche, founding father of KadanKadan, a platform for group cargo exports, additionally factors out that the uneven tariff unfold creates a pricing benefit. He notes that Nigeria’s 14% tariff is decrease than Thailand’s 46%, a competitor in cassava flour; in 2021, Thailand earned almost $1.3 billion from exporting cassava, whereas Nigeria earned simply $1 million.
Among the highest tariffs have hit different excessive cassava exporters like Vietnam and Cambodia: 46% and 49%. Ogheche says this tariff struggle gives a window of alternative for Nigerian merchants to pitch higher costs to their clients.
Nigeria’s items keep low cost globally, with the naira topping ₦1,600 to the greenback, however turning uncooked supplies like cassava into completed merchandise stays a problem. Too few factories and shaky energy maintain the nation again. “We will construct that capability,” stated Ogbeche, an business insider, although continual underfunding alerts a gradual repair.
Nigeria dangers lacking an opportunity to function an export hub for nations dealing with steeper U.S. tariffs. Omowumi Omidiji, founding father of Souq OS, a provide chain platform for rising markets, argues that routing exports by means of African nations with decrease US tariffs may have been an answer. “Delivery from Africa may stay aggressive,” she stated.
But, the African Continental Free Commerce Space (AfCFTA) struggles to ship. “Tariffs inside Africa are nonetheless excessive,” Omidiji famous. Intra-African commerce accounts for simply 15% of the continent’s whole—properly beneath the EU’s 60%—hampered by poor infrastructure and inconsistent rules.
International commerce corridors may open up alternatives for stablecoins
Whereas the crypto market had already been trending downward earlier than Trump’s tariffs, the announcement worsened the outlook. Bitcoin dropped to $75,000, a stage not seen since November 2024, as traders pulled out of what they noticed as riskier bets. Over $2 billion in crypto was liquidated, with $1.36 billion vanishing through the weekend the ten% common tariff took impact.
The 145% tariff—together with levies—on Chinese language items added gas to the fireplace. With China’s financial system rattled, crypto selloffs elevated globally. Smaller African exchanges, which rely upon buying and selling charges to remain afloat, have been hit because the liquidation buying and selling exercise pressured their reserves, impacting income.
“Enterprise capitalists and funds are cautious,” stated Ayomide Ayodele, head of promoting at crypto alternate Quidax. “Crypto startups want to chop prices, protect runway, and anticipate beneficial market situations.”
Nevertheless, the crypto market noticed a resurgence on April 9 after Trump introduced a 90-day pause on the common tariff, restoring investor confidence in dangerous property.
Ayotunde Alabi, CEO of crypto startup Luno Nigeria, sees larger dangers forward. Commerce restrictions may choke off exterior funding and make fundraising a lot more durable. Capital is fleeing to safer property like U.S. Treasuries. That’s dangerous information for African Web3 ventures, stated Alabi.
Past funding, rising prices now threaten the nuts and bolts of improvement. Blockchain improvement instruments like GPUs, servers, and chips—largely imported from China—have gotten costlier. However Alabi sees a chance. “This can be a second for Africa to spend money on homegrown infrastructure and cut back reliance on exterior enablers.”
There’s a silver lining too. Francis Ogbuka, VP of gross sales at blockchain funds firm Zone, believes the US-China rift may open new commerce corridors for African nations. “The US and China are the world’s largest importers and exporters, respectively. The disruption will open new commerce flows for Africa, however the continent wants extra environment friendly cross-border fee methods.”
SWIFT isn’t constructed for pace or low-cost transfers. That is an space the place blockchain and stablecoins can show their real-world utility and assist resolve FX liquidity challenges, stated Ogbuka.
Telecom sector faces oblique dangers
The telecommunications sector is dependent upon imports of apparatus and infrastructure from China, the US, and components of Europe. It’s unlikely to be instantly affected by export tariffs.
“It received’t have an effect on the business a lot as a result of the operators import every little thing they use. They don’t export,” stated Tony Emoekpere, President of the Affiliation of Telecommunication Corporations of Nigeria (ATCON).
The oblique results of this commerce coverage, nonetheless, may nonetheless be problematic. For example, modifications in international alternate earnings, inflation, and client spending patterns may affect telecom operators’ means to handle rising operational prices and preserve reasonably priced companies.
“There isn’t any {hardware} that we export, however there could be points with charging worldwide calls by native operators. If the Worth Added Tax (VAT) on calls within the US will increase, native operators might want to modify to the charges,” stated Gbenga Adebayo, President of the Affiliation of Licensed Telecommunication Operators of Nigeria (ALTON).
The US tariff pause might supply a short sigh of reduction, however for Nigerian startups, it’s a reminder that world commerce shifts can hit near house. From rising prices to cautious traders, the ripple results are actual.
