An economist, Dr Muda Yusuf, has said that the impact of the current trade war by the U.S. President Donald Trump on Nigeria’s economy is likely to be limited.
Yusuf said on Thursday in Lagos that the impact could be limited because Nigeria’s external trade to the U.S. averaged about 10 per cent.
According to him, in 2024, Nigeria’s total merchandise export was valued at $50.4 billion and Nigeria exports to the U.S. the same year were worth $5.7 billion (11.3 per cent).
He noted that Nigeria’s major exports to the U.S. were crude oil, petroleum gas and nitrogenous fertiliser, while major U.S. exports to Nigeria were vehicles, wheat and fuel.
Yusuf, however, said that Nigeria’s economy might be affected indirectly by the tariff war as the Trump administration had practically closed the African Growth and Opportunity Act (AGOA) trade window.
“The trade war and the subsequent retaliatory tariffs would trigger inflationary pressures in the United States.
“This may result in elevated costs for imports into Nigeria from the United States.
“We are likely to witness some levels of disruptions in global supply chains resulting from the tariff war.
“This could dampen the global growth outlook and affect crude oil price, and a decline in oil price would impact Nigeria’s foreign reserves and revenue,” he said.
Yusuf added that the worsening inflation outlook for the U.S. economy might trigger monetary tightening by the U.S. federal reserve.
According to him, this may lead to higher interest rates and trigger portfolio flow reversals in emerging economies and could have implications for Naira exchange rate.
“However, there are also opportunities for new trade partners globally.
“Many countries that are victims of the current trade war would seek new bilateral trade relationships which may create opportunities for Nigeria,” he said.
