…It’s time to strengthen AfCFTA – Ndolo
…Nigeria should have roundtable with U.S. – Obhiosa
… We must rejuvenate our manufacturing sector – Ikot-Osin
As the global trade war unleashed by America’s President, Donald Trump, continues, BENJAMIN SAMSON in this report speaks to experts on its impacts on the Nigerian and Africa economies, and the way out of the quagmire.
It’s no longer news that the Trump’s administration has imposed tariffs of different percentages on exports to the U.S. by various countries, with China and other advanced economies retaliating and that the trade war has triggered uncertainties in the global economy.
Oil price
Speaking with this reporter on the impact on the Nigerian economy, an analyst at Rystad Energy, Osagie Pedro, warns that Chinese oil demand growth from Nigeria, previously projected at 50,000-100,000 bpd, would drop significantly.
He said, “The imposition of increased U.S. tariffs on Chinese imports, coupled with China’s retaliatory measures, fuelled fears of a prolonged trade war, dampening global economic growth and, consequently, oil demands. Chinese oil demand growth, previously projected at 50,000-100,000 bpd, faces significant curtailment and OPEC’s decision to increase production by 411,000 bpd in May further exacerbated supply-side pressures. Goldman Sachs forecasts Brent to fall to $62 by the end of 2025 and $55 by the end of 2026.
“For Nigeria, heavily reliant on oil revenues which is 80% of the government revenues and 95% of foreign exchange, this price downturn poses a substantial economic risk. The current oil prices are significantly below Nigeria’s 2025 budget benchmark of $75 per barrel, potentially leading to increased budget deficits, higher borrowing, and pressure on the foreign exchange market. The surplus outlook and narrow Brent spread could also deter upstream investment, particularly in high-cost deepwater projects.
“However, a slight counterpoint emerged from the American Petroleum Institute’s report, revealing an unexpected 1.1-million-barrel drawdown in U.S. crude inventories, suggesting some resilience in demand.”
Exporters divided
However, Nigerian exporters who spoke with this reporter on the impact of the tariff expressed mixed reactions.
They said the global trade war could either leave Nigerian products vulnerable to a downturn in demand or be the exact opposite.
The Secretary of the Manufacturers Association of Nigeria Export Promotion Group, Dr. Benedict Obhiosa, said that higher tariffs triggered by the U.S. often come with a global chain reaction.
“Whenever there is an imposition of higher tariffs by a major trading partner, it is often a call for concern. There are speculations that other major export destination countries of Nigerian products in Europe and Asia may toe the route. Should that be the case, it will hugely impact negatively on the Nigeria non-oil export volume for the remaining part of the year, except something urgent is done about it.
“Although Nigeria’s direct trade with the U.S. is relatively low, and for the duration of the three-month pause, tariffs sit at a baseline of 10 per cent, Nigerian exporters may suffer slight collateral damage in markets where the U.S. holds influence,” he said.
However, Obhiosa said exporters were already considering new strategies to stay afloat.
“One possible strategy is how to now begin to consider other markets where they can sell their products besides the US.
“Obviously, from the tariff imposition, exporters from Nigeria will not be competitive, especially considering the high cost of production, infrastructural deficiency, and exchange rate fluctuation in our domestic economy,” he said.
He advised the federal government to take urgent diplomatic steps to resolve the crises.
“My advice would be that the Nigerian government should have a roundtable with the U.S. government on the imposition for a re-think of their action.
“Crude oil export to the US market will also be affected. That would help to pave the way for the exporters who are playing in the non-oil export sector as well,” he said.
However, an Economist at Edmund Group, Dr. Ann Osakwe, offered a contrasting view, describing the development as a potential opportunity for Nigeria.
She said, “Nigeria’s trade with the USA is minimal; so, the Trump tariffs will not impact the country severely. The ripple effects are not going to be negative, but more likely to be positive as global suppliers are now seeking alternative destinations for their goods and are increasingly turning their attention to Africa.
“Sweden opened their trade office in Lagos. Switzerland, Poland, and a couple of countries are already positioning to increase their sales of goods and services to Nigeria.
“This is because they see there is a market there; they are now going to pay a lot more attention.”
She noted that the current global realignment could benefit Nigerian exporters willing to pivot to previously underutilised markets.
“We are going to put more effort into exporting to Canada, to Australia, to Japan, to India and other countries,” she added.
Africa
Speaking on the impact on the African economy, a lead consultant to the ECOWAS Commission, Prof. Edward Ndolo, in an interview with this reporter, said Africa will be affected by the global ‘tariff war’ triggered by Trump.
He said Africa must look inwardly and strengthen the African Continental Free Trade Agreement (AfCFTA) to hedge against the fallout of the tariff war.
He said, “Though China remains the target of Trump’s tariffs war, the rest of the world would ultimately feel the impact, Africa inclusive.
“China has been the producer of most products and goods used by people around the world and it is targeted by the tariff imposition by President Trump.
“For Africa, this policy is going to affect their whole macro-economy due to their high dependency on importation.”
Likewise, a trade analyst, John Elaigwu, said, “There’s nowhere the impact will be more profound than in Africa, particularly in Nigeria and the nascent African Continental Free Trade Area (AfCFTA).
“Trump’s tariff plan is framed as a protectionist measure designed to boost American manufacturing and reduce dependence on foreign imports. However, history suggests that such aggressive policies tend to spark retaliatory measures, further fragmenting global trade. The last time Trump imposed steep tariffs, China responded in kind, deepening trade hostilities. This time, a broader blanket tariff could trigger countermeasures from Europe, China, and even developing economies, leading to a global slowdown.”
According to him, “Nigeria, Africa’s largest economy, is deeply embedded in global trade dynamics. While the country is not a direct target of U.S. tariffs, the secondary effects could be significant.”
Elaigwu said further that, “The African Continental Free Trade Area (AfCFTA), launched in 2021, is Africa’s most ambitious economic integration project. It aims to create a $3.4 trillion market by removing intra-African trade barriers. However, its success depends on stable global trade conditions.
“Many African economies, including those within AfCFTA, source goods and machinery from China. If Chinese exports become more expensive, it could slow industrialisation efforts across the continent. Global investors might hesitate to commit to Africa if economic uncertainty rises, preferring to keep capital in safer, more predictable markets. If Trump extends his protectionist policies beyond China, African exports especially those benefiting from the African Growth and Opportunity Act (AGOA) could face new barriers, limiting access to the American market.
“Furthermore, Trump’s tariff strategy could re-define the structure of global trade. While major economies may retaliate with counter-tariffs, emerging markets like Nigeria have fewer options.
“Rather than waiting to react, African nations must take proactive steps to strengthen regional trade, boost industrialisation, and reduce dependency on volatile global markets.
“The AfCFTA, if implemented effectively, could serve as Africa’s best defense against external trade shocks. But time is running out. The continent must act decisively, or risk being caught in the crossfire of another geopolitical trade war – one that could set back Africa’s economic ambitions for years to come.”
Negotiations
However, a trade negotiator at PricewaterhouseCoopers (PwC), Dr. Jide Akinyemi, urged the federal government to negotiate instead of retaliation.
He said, “Following the catastrophic effects of these tariffs on stock markets which sparked fears of recession, Trump decided to offer 90 days of grace within which all countries that had not taken retaliatory measures against the US would pay 10 per cent pending negotiations.
“For a country like China, which retaliated over the initial 34 per cent tariff with 84 per cent on U.S. imports, Trump jerked its tariff to 125 per cent and ruled that China would not benefit from the 90 days of grace.
“In response, China enforced import tariffs of 125 per cent on U.S. products, calling on the United States to completely cancel its reciprocal tariffs, following Washington’s recent decision to grant exemptions.
“But it is a different ball game for Nigeria. Retaliating with outright ban of some U.S. products coming into Nigeria means the country may not benefit from the 90-day waiver. Indeed, the United States Trade Representative (USTR) in Nigeria protested against the ban on an “X” platform post that it would reduce market access for U.S. businesses looking to expand reach in Nigeria.”
Akinyemi also said, “For clearer insight, the Nigerian Bureau of Statistics (NBS) showed that between 2015 and 2024, the Nigeria-U.S. trade was worth N31 trillion, with Nigeria enjoying a trade surplus of N1.6 trillion. Trump imposed extra tariffs on countries that benefited from this type of trade advantage over his country.
“Although Nigerian officials have assured that they are negotiating with the U.S. on this trade dispute, I question the rationale behind the ban of categories of U.S. goods imported into Nigeria. If it was an impulsive reaction to the tariffs, I dare say that the officials did not exercise enough prudence, more so as Nigeria is a beneficiary of trade surplus with the U.S.
“Nigeria may not enjoy the 90 days of lowered tariff pending negotiations, and this will hurt our own exporters of goods to the U.S. We hope this ban will not elicit a further punitive tariff hike by the U.S.
“In particular, it will have a negative effect on the over one million Nigerians in the US and other Africans who have come to love and depend on Nigeria to ship our staple foods to America.
“More experienced countries resisted the urge to retaliate against Trump’s tariffs because of the effects on their economies. They immediately sent delegations to negotiate. This is the best way forward.
“Our government officials should always put the interests of Nigeria first in reacting to change in world affairs.”
Remedies
Also, a professor of Economics, Umo Ikot-Osin, said the way out for Nigeria in the trade war lies in the rejuvenation of the manufacturing sector in the country.
“For countries like Nigeria, the path to economic rejuvenation is a level of protectionism that would broaden the country’s manufacturing base, create much-needed jobs, and set the country on the path to self-reliance.
“So, at a time of global economic uncertainty, countries like Nigeria should endeavour to go back to the basics by rejuvenating the manufacturing base that made the economy strong in the past.
“The manufacturing sector in most countries is a huge employer of labour, but China, more than any other country in the world, has taken advantage of globalisation, turning itself into a factory for the world and flooding the global market with cheap goods while creating jobs and wealth for its huge population,” he said.
Continuing, he said, “Nigeria has not taken advantage of its huge population, and the poverty level in the country is growing exponentially. Nigeria is weak economically because it has not been producing most of the things it consumes, and has turned itself practically into a consumer country. Therefore, Nigeria must give more to the world than it takes.
“So, there must be conscious efforts for Nigeria to revive sectors like the textile and garment sector to drive economic growth and maximise the advantages in the agricultural sector. Nigeria spends $4 billion annually on garment imports.
“The federal government should implement policies to revive the textile sector, among others. It should not be bothered by America’s hypocritical complaints.”