In a move that has sent shockwaves through global markets, President Donald Trump announced on April 2, 2025, a sweeping tariff strategy imposing a 10% blanket duty on all U.S. imports, with country-specific hikes on select nations deemed to have “unfair trade advantages.” Among those caught in the crosshairs is Nigeria, which faces a 14% tariff on its exports to the United States. The decision, critics argue, is not merely an act of economic protectionism—it is a direct blow to vulnerable economies ill-prepared for such aggression.
Nigeria’s predicament is compounded by a long-standing overdependence on crude oil, which constitutes over 90% of its foreign exchange earnings. With U.S. refiners now eyeing cheaper oil from non-tariffed suppliers, Nigeria risks losing its competitive edge in one of its few major export markets. The immediate consequence has been felt in currency markets. As the naira came under renewed pressure, the Central Bank of Nigeria injected $200 million to stabilize the exchange rate—a short-term measure that underscores long-term structural fragility.
For years, policymakers have paid lip service to diversification without backing rhetoric with strategy. Agriculture, which once held the promise of becoming Nigeria’s non-oil economic backbone, has suffered from inconsistent policy, insecurity in food-producing regions, and a lack of investment in storage, irrigation, and value addition. Similarly, the country’s manufacturing sector remains stunted, plagued by erratic power supply, high production costs, and a chronic infrastructure deficit that chokes local industry before it can compete globally.
Beyond oil, the tariffs have cast uncertainty over the future of the African Growth and Opportunity Act (AGOA), a trade initiative that has allowed Sub-Saharan African countries, including Nigeria, duty-free access to the U.S. market since 2000. With AGOA set to expire later this year, Trump’s tariffs may serve as a prelude to a more isolationist U.S. trade stance, eroding what little preferential access African countries have enjoyed. For Nigeria, this could spell the end of already modest gains in sectors like apparel, cocoa, and leather—areas where the country had begun to show export potential under AGOA’s umbrella.
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Trade analysts, including voices from the Atlantic Council, have pointed to broader risks. If global demand for oil dips amid shrinking trade volumes, prices may fall further, driving oil-reliant economies like Nigeria into deeper fiscal crises. Without structural changes, Nigeria is staring down the barrel of not just a tariff war but a full-blown economic contraction.
This crisis must be a turning point. It is time Nigeria finally broke its cycle of reactive economic management and began to act with foresight and urgency. Three actions are imperative:
First, Nigeria must aggressively develop and support value-added agricultural exports. It is not enough to ship raw cocoa and cashews. The country must invest in processing plants, modern logistics, and trade infrastructure. For instance, exporting finished cocoa products—like chocolate or cocoa butter—would not only create jobs but also fetch significantly higher revenue on the international market.
Second, the government must revive and modernize the manufacturing sector, starting with industries where Nigeria already has a comparative advantage, such as textiles and leather. This requires a mix of policy incentives: lower tariffs on imported machinery, reliable power infrastructure (including off-grid renewable solutions), and tax holidays for export-oriented manufacturers.
Third, Nigeria must rethink its global diplomacy. Trade relationships cannot be left to chance or occasional bilateral meetings. A full-fledged economic diplomacy strategy is needed—complete with trade envoys, dedicated policy units in embassies, and active engagement with multilateral trade forums. Nigeria should push not just for exemptions to the Trump tariffs but for a post-AGOA trade deal that reflects Africa’s role in the global economy.
President Trump’s tariff shock has exposed, yet again, the fragility of Nigeria’s economic model. But in this crisis lies an opportunity: to build an economy that does not crumble at the whim of foreign powers. The moment calls for action, not words.
