Economist and Chief Executive Officer , Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has said that Nigeria’s economic vulnerability to shocks of the current trade war unleashed by President Donald Trump of the United States may be very limited.
His submission is based on Nigeria’s external trade exposure to the US, which he said is averagely about 10 per cent.
Nigeria major export to the US are crude oil, petroleum gas, nitrogenous fertiliser, while major US export to Nigeria are mainly vehicles, wheat, and fuels.
Other major export destinations for Nigeria products are Spain, France, Netherlands, and Italy. Oil and gas products account for close to 90 per cent of Nigeria export. This has being the position for about three decades.
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“In 2024, Nigeria’s total merchandise export was valued at $50.4 billion and Nigeria export to the United States same year was $5.7 billion, which was 11.3 per cent,” he explained.
However, Yusuf warned that the Nigeria economy may be affected indirectly in some other ways. For instance, the CPPE boss noted that the Trump administration has practically brought closure to the African Growth Opportunities Act (AGOA) trade window.
Besides, he noted the trade war and the subsequent retaliatory tariffs would trigger inflationary pressures in the United States.
This, he warned, may result in elevated costs for imports into Nigeria from the United States. He added that there are likely going to be some level of disruptions in global supply chains resulting from the tariff war.
“This could dampen the global growth outlook and affect crude oil price. A decline in oil price would impact Nigeria’s foriegn reserves and revenue.
“The worsening inflation outlook for US economy may trigger monetary tightening by the US Federal reserve. This may lead to higher interest rates and trigger portfolio flow reversals in emerging economies. This could have implications for naira exchange rate,” Yusuf warned.
Nonetheless, the CPPE boss hinted that there are also opportunities for new trade partners globally. “Many countries that are victims of the current trade war would seek new bilateral trade relationship which may create opportunities for Nigeria investors,” he submitted.