Economic analysts have called on the Federal Government to ramp up local production and take full advantage of the African Continental Free Trade Agreement (AfCFTA) following the imposition of a 14 per cent tariff on Nigerian exports by the United States.
The tariff, announced last week by US President Donald Trump, is part of new trade policies affecting over 185 countries, including Nigeria. The move is already sparking concerns about Nigeria’s export earnings and overall economic resilience, especially for non-oil exports.
The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, confirmed the development and admitted that it poses a threat to Nigeria’s key exports such as crude oil, natural gas, agricultural produce, and manufactured goods.
The U.S. government defended the tariff by citing a longstanding trade imbalance. According to them, while Nigeria imposes a 27% tariff on U.S. goods, America has been more lenient — a move President Trump said had become unsustainable for American businesses and consumers.
In a report released by Meristem Securities, analysts warned that the new tariff would hurt Nigeria’s foreign exchange inflows, increase the cost of doing business for exporters, and limit the country’s access to the U.S. market.
“This may strain export revenues and FX inflows in the short term,” the report said. “But it could also push Nigeria to focus more on local production, reduce dependence on traditional markets, and accelerate engagement with AfCFTA.”
Experts at Cowrywise Asset Management shared similar views. They said the tariffs could destabilise what remains of Nigeria’s fragile trade partnership with the U.S. and might push Nigeria to pursue deeper ties with China, the European Union, and BRICS nations (Brazil, Russia, India, China, South Africa).
“If not managed properly, this could lead to broader economic and diplomatic friction,” Cowrywise said in its commentary.
According to Cowrywise, the tariff could aggravate existing economic issues such as foreign exchange shortages, inflation, and weakened consumer purchasing power. Nigeria could also face rising costs in importing essential goods like pharmaceuticals, wheat, and industrial machines from other markets, worsening the FX crisis and fuelling inflation.
“Small businesses, especially those relying on U.S. buyers under AGOA, will be hit the hardest,” Dr. Oduwole added in her Sunday statement.
The African Growth and Opportunity Act (AGOA), which has since 2000 granted Nigeria and other sub-Saharan countries duty-free access to the U.S. market, now hangs in the balance. Nigeria, a major beneficiary, had grown its exports in areas like apparel and agriculture under AGOA, but the new 14% tariff threatens to erase those gains.
A report by Renaissance Capital Africa argued that while Nigeria will feel the sting of the U.S. tariff, the broader African continent may remain relatively immune due to its low trade volume with the U.S.
“Africa contributes a tiny portion to America’s total imports — $39 billion in 2024 — far less than what the U.S. gets from Mexico or Canada in just one month,” the report noted.
It said Nigeria and South Africa account for more than half of what the U.S. imports from Africa, but still, only 9% of Nigeria’s exports go to America, suggesting room for market diversification.
