Trump’s Trade Wars Cast Shadow Over Nigeria’s Economic Outlook: WTO Warns of ‘Catastrophic’ Global Impact
Abuja, Nigeria – As the United States enforces new tariffs under former President Donald Trump’s renewed trade policies, Nigeria faces increasing economic uncertainty. With its complex trade relationships spanning both the U.S. and countries targeted by these tariffs, Nigeria risks significant disruptions to its economy. The World Trade Organization (WTO) has warned that these escalating trade wars could have “catastrophic” consequences for global growth, heightening concerns about their ripple effects on developing economies.
Nigeria’s Vulnerability
Nigeria has long-standing trade ties with both China and the U.S., making it particularly vulnerable to the fallout from these tariffs. The U.S. was Nigeria’s fourth-largest trading partner in 2024, with imports including machinery, vehicles, mineral fuels, and cereals. In the same year, trade between the two nations amounted to over $7 billion. With China and the European Union—Nigeria’s largest trading partners—also affected by U.S. tariffs, the country’s oil and non-oil exports are likely to suffer as global trade shifts in response.
Impact on Imports
The ripple effects of tariffs imposed on Canada and Mexico are expected to increase costs for U.S. companies, which in turn will impact the prices of American goods exported to Nigeria. This is particularly concerning given Nigeria’s heavy reliance on U.S. imports, including vehicles valued at $580 million in 2022. The situation is further worsened by the naira’s depreciation, which saw an 82% drop in value in 2024, making imports even more expensive and straining consumer purchasing power.
Dangote Refinery and Crude Oil Trade Flows
The commencement of full-scale operations at Nigeria’s Dangote Refinery introduces another layer of complexity. As the refinery ramps up production, it could reduce the volume of Nigerian crude available for export, particularly to Europe. Meanwhile, the Nigerian National Petroleum Corporation (NNPC) is working to boost crude production to meet both domestic demand and existing export commitments, placing additional pressure on the country’s oil sector. Any disruptions in global oil demand, especially from major buyers affected by U.S. tariffs, could pose further challenges for Nigeria’s economy.
Nigeria Seeks Trade Diversification
At the World Economic Forum in Davos 2025, Nigerian policymakers have intensified efforts to diversify trade and reduce reliance on traditional partners. In 2024, the Nigerian Economic Summit Group (NESG) reported a trade surplus of $8 billion—an improvement from the $1 billion surplus recorded in 2023—indicating progress in expanding non-oil exports. However, experts caution that diversification efforts must accelerate to counterbalance the instability caused by shifting global trade policies.
Expert Opinions and Concerns
Economic analysts warn that the renewed Trump administration’s trade stance, marked by aggressive tariff impositions and potential bans, could significantly impact Nigeria’s export revenues. The potential for further geopolitical disputes—ranging from NATO spending obligations to tensions over Taiwan—raises the risk of additional sanctions and restrictions, all of which could further destabilize Nigeria’s economic outlook.
Context
Nigeria enters 2025 grappling with multiple economic headwinds, from falling crude oil prices to the indirect effects of global trade wars. Addressing structural weaknesses, curbing inflation, and intensifying economic diversification efforts will be crucial in mitigating the adverse effects of these global developments on the nation’s economic stability.
