Producers Affiliation of Nigeria (MAN) says the 14 per cent tariff imposed on Nigerian exports to the USA of America (USA) by the President Donald Trump administration would end in a lack of between N1 trillion and N2 trillion in Nigeria’s agricultural exports to the North American nation.
Director Basic of MAN, Mr. Segun Ajayi-Kadir, disclosed the affiliation’s place in an announcement yesterday, titled, “MAN Place on the usTariff Hike on Nigerian Manufacturing Sector and the Broader Economic system.”
Ajayi-Kadir said that the reciprocal tariffs might halt Nigeria’s industrialisation journey and transition from exporting uncooked commodities to semi-processed and completed items.
Trump just lately introduced a whole three-month pause on all “reciprocal” tariffs he had imposed on a number of nations, except China.
MAN mentioned the hike in tariff might pose important disincentive to companies investing in value-added manufacturing in Nigeria and constrain them to revert to exporting uncooked supplies.
Ajayi-Kadir defined, “MAN members who’re exporters in agro-processing, chemical compounds and pharmaceutical, primary steel, iron and metal, non-metallic mineral merchandise and different gentle industrial manufacturing rely closely on the U.S. for market entry.
“With elevated prices for American consumers because of the tariffs, demand for Nigerian merchandise is anticipated to say no.
“As an illustration, processed agricultural items resembling cocoa derivatives, sesame seeds, and ginger, which have gained modest penetration in U.S. markets, are more likely to witness a drop in export quantity.
“In line with the Nationwide Bureau of Statistics, agricultural exports accounted for over N4.42 trillion in 2024, with the U.S. being one of many high locations. The tariff might doubtlessly wipe out N1 to N2 trillion of that determine yearly.”
The MAN director-general said that Nigeria’s manufacturing sector, which contributed 8.64 per cent to the nation’s GDP in 2024, was one of the crucial predisposed sectors of the financial system when it got here to commerce coverage shifts. He added that the imposition of a 14 per cent tariff on Nigerian exports would considerably undermine the competitiveness of regionally manufactured items within the U.S. market.
He said, “Along with income losses, the brand new tariffs pose a big disincentive to companies investing in value-added manufacturing.
“Over the previous decade, producers have made concerted and strategic efforts to assist the nation’s transition from exporting uncooked commodities to semi-processed and completed items.
“Nonetheless, larger market-entry prices due to larger tariff on Nigerian merchandise cut back the profitability of such investments, making it extra enticing for companies to revert to exporting uncooked supplies.
“That is counterproductive to Nigeria’s industrialisation agenda and compromises the long-term objective of reaching export diversification beneath platforms such because the African Continental Free Commerce Settlement (AfCFTA).”
Ajayi-Kadir additionally said that the implications of the tariff hike on employment within the manufacturing sector have been dire, including that it might trigger many firms to cut back their manufacturing scale or downsize workforce to chop prices as export revenues fall.
He mentioned, “Contract producers, small-scale industrialists, and companies working in particular financial zones concentrating on the U.S. market are more likely to be worst hit.
“This might result in job losses at a time when the nationwide unemployment charge stays excessive, and youth underemployment continues to pose a socio-economic menace.”
Ajayi-Kadir added that Nigerian companies that have been a part of regional or world provide chains, significantly in prescription drugs, chemical compounds, meals and drinks and motorcar meeting, stood to lose their aggressive edge as their merchandise turned much less enticing to U.S. firms looking for sourcing companions.
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Commenting on the impact of the tariff hike on the broader Nigerian financial system, MAN harassed that there might be direct affect on Nigeria’s commerce stability.
It said that with Nigeria already grappling with a fragile exterior sector, any important discount in exports to the U.S. would erode the present commerce surplus Nigeria loved in its commerce relations with the USA and doubtlessly push the stability into deficit.
Ajayi-Kadir mentioned, “This can have quick implications for the nation’s stability of funds and will end in a drawdown of international reserves, placing additional strain on the change charge.
“The CBN could also be compelled to intervene extra aggressively within the international change market, thereby lowering its buffer for managing different macroeconomic shocks.”
He additionally said that the timing of the tariff determination was significantly troublesome for the federal authorities, which had tied a lot of its 2025 budgetary projections to optimistic income assumptions.
Ajayi-Kadir said, “The price range, pegged at N55 trillion, assumes oil costs will common $75 per barrel all through the fiscal 12 months. Nonetheless, the fact of the worldwide oil market is starkly completely different, with present costs already falling beneath $60 per barrel.
“If export earnings from non-oil sectors resembling manufacturing additionally decline because of the new U.S. tariffs, the federal government will face higher shortfall in income.
“This might result in cuts in capital expenditures, delays in infrastructure initiatives, and a rise in borrowing—all of which might undermine financial development and stability.”
The director basic of MAN additionally mentioned there was the inflationary dimension to contemplate, warning, “Because the commerce surroundings turns into extra unsure and international change earnings dwindle, financial authorities could also be compelled to lift rates of interest in a bid to regulate inflation and stabilise the naira.
‘Nonetheless, larger rates of interest will improve the price of borrowing for companies, together with producers, and will stifle home funding.
“The ripple results can be felt by customers, as companies cross on larger prices by elevated costs for items and companies. This can exacerbate the cost-of-living disaster and additional pressure family incomes.”
MAN said that the tariff hike would halt buyers’ confidence in Nigeria’s financial system, which had been striving to place itself as a producing hub in West Africa, partly by attracting international direct funding from companies fascinated by tapping into each home and export markets.
Ajayi-Kadir mentioned, “The brand new tariff regime makes Nigeria a much less enticing proposition for such buyers, significantly those that view entry to the U.S. market as a key strategic benefit.
“In 2023 alone, Nigeria’s manufacturing sector attracted over $1.6 billion in capital importations. That determine might decline considerably in 2025 if investor confidence just isn’t restored by sturdy coverage responses.”
Ajayi-Kadir additionally mentioned MAN was cautious of potential strain on Nigeria to reciprocate by lowering its tariffs on U.S. items within the identify of so referred to as honest commerce.
However the actuality, in line with him, was that reducing tariffs on U.S. imports might flood the Nigerian market with subsidised items, thereby undermining native producers.
He said, “One other key concern is the danger of coverage diversion. Nigeria has, in recent times, made commendable strides towards reaching self-sufficiency in a number of manufacturing segments and diversifying away from oil.
“Nonetheless, succumbing to exterior pressures to liberalise commerce prematurely would reverse these good points. As an alternative of supporting home manufacturing, such actions would sign to buyers and industrialists that Nigeria lacks a coherent long-term commerce and industrial coverage.
“Moreover, the absence of institutional capability to interact in refined commerce negotiations locations Nigeria in a weak place. Whereas nations with superior authorized and financial establishments could possibly negotiate beneficial phrases, Nigeria is at a drawback as a result of capability constraints. This might result in suboptimal agreements that serve international pursuits greater than home improvement targets.”
