‘US Tariff Might Gradual Nigeria’s Financial Progress Prospects’
Nigeria’s financial progress prospects in 2025 face a possible slowdown as a result of a newly imposed 14 per cent reciprocal tariff by the US on Nigerian imports.
This was indicated within the newest ‘Nigeria Financial Outlook – April 2025’ report by PwC.
The tariff, a part of a broader set of measures dubbed the “Liberation Day Tariffs” by the US, is designed to deal with commerce imbalances via reciprocal actions. Nonetheless, US President Donald Trump has ordered a 90-day pause on its implementation.
In accordance with famend economist and Managing Director of Financial Associates, Dr Ayo Teriba, Trump could not return to the tariffs as a result of influence on the American economic system and folks.
Over a chat, Teriba stated, “I don’t suppose he’s going to come back again to it ever, except he needs the American economic system to break down. America is the largest debtor on the earth. The individuals he’s imposing tariffs on are a few of their greatest collectors.”
In the meantime, the PwC report highlights that this 14 per cent levy might considerably influence Nigeria’s commerce dynamics with the US, doubtlessly hindering the projected marginal Gross Home Product progress of three.4 per cent for 2025.
This tariff might make Nigerian exports to the US much less aggressive, doubtlessly resulting in lowered export volumes and decrease earnings for Nigerian farmers and exporters in sectors like agriculture.
The Producers Affiliation of Nigeria estimates this might erase roughly N2tn from Nigeria’s annual agricultural exports.
The US transfer comes amidst current considerations concerning the way forward for the African Progress and Alternative Act, a preferential commerce programme that has allowed eligible African nations, together with Nigeria, to export 1000’s of merchandise to the US duty-free.
In 2024, Nigeria was the second-largest exporter to the US below AGOA, with exports valued at $1.76bn. A good portion of those exports consists of essential sectors resembling oil and agricultural merchandise.
The report particularly factors out that the 14 per cent tariff is more likely to make Nigerian agricultural merchandise costlier for American customers, resulting in a possible lower in demand and lowered export volumes. This might translate to decrease earnings for Nigerian farmers and exporters.
Whereas the oil and fuel sector is at the moment exempt from the reciprocal tariff, PwC means that elevated US home oil manufacturing plans might result in lowered demand for Nigerian crude oil, which constituted a considerable 88.9 per cent of Nigeria’s exports to the US in 2024.
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A mixture of tariffs on non-oil exports and doubtlessly lowered oil demand might considerably influence Nigeria’s overseas trade earnings.
As an import-dependent nation, with imports accounting for 43.8 per cent of complete commerce as of December 2024, Nigeria might additionally expertise rising prices of imported inputs as a result of broader US commerce insurance policies inflicting international provide chain disruptions. This could drive up manufacturing and operational bills for native producers, additional exacerbating home inflation.
The PwC report outlines a number of methods through which these US insurance policies, together with the 14 per cent tariff, might negatively influence Nigeria’s total GDP progress.
“Decrease demand for Nigerian exports as a result of tariff and potential lack of AGOA advantages could result in a decline in overseas trade inflows, affecting the soundness of the naira. Tariffs on items from different international locations, pushed by US protectionist insurance policies, might elevate the price of imported items, together with equipment and uncooked supplies, impacting Nigerian companies and contributing to inflation.”
The report notes that rising protectionism and international coverage uncertainty could scale back international Overseas Direct Funding flows, making buyers extra cautious about rising markets like Nigeria.
The Nigeria Financial Outlook – April 2025 report emphasizes the necessity for strategic responses from the Nigerian authorities and companies.
These responses embrace, “Advocate for extension and improved concessions below the African Progress and Alternative Act to increase Nigerian export alternatives. Broaden alliances past the US. Promote Nigerian exports throughout Africa by leveraging AfCFTA to focus on key markets for Nigerian-made items and discover commerce agreements with extra international locations to cut back dependency on a number of companions.
“Enhance non-oil exports and home manufacturing. Enhance non-oil export by supporting agro-processing, strong minerals, and lightweight manufacturing via focused export incentives and introduce incentives for producing key inputs regionally, particularly these beforehand.”
The specialists additionally urged the Federal Authorities to “Mobilise long-term infrastructure financing through situation long-tenure infrastructure bonds to boost capital for large-scale public initiatives. Strengthen Infrastructure Funding and supply funding ensures and authorized protections to draw credible non-public sector participation.
“Keep a transparent, clear pipeline of viable initiatives to information investor curiosity and facilitate funding. Guarantee infrastructure offers are structured round clear, truthful threat allocation between the private and non-private sectors to boost undertaking bankability. Use PPPs to construct extra seaports on the southern coast, particularly within the Niger Delta and Southeastern states bordering the ocean, just like the Construct, Personal, Function and Switch Lekki Deep Sea Port in Lagos.”
