From Terhemba Daka (Abuja) and Tobi Awodipe (Lagos)
• MAN worries over U.S. tariff, predicts N2tr loss from agro export
• Analysts see sustained oil prices dip undermining Nigeria’s economic reforms

Chief Executive Officer of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, yesterday, attributed the recent slump in global crude oil prices to the renewed wave of aggressive tariff policies rolled out by United States President, Donald Trump.
 
On his part, the Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, expressed worry over the imposition of a 14 per cent tariff on Nigerian exports, saying it would significantly undermine the competitiveness of locally manufactured goods in the U.S. market.
 
A sustained drop in the price of crude oil could undermine recent progress on economic reforms and even reverse progress in Nigeria, analysts said. This steep drop in crude oil prices largely due to Trump’s tariffs have been squeezing budgets of emerging market oil exporters, including Nigeria.
 
During a briefing in the State House, Abuja, Ahmed warned that Trump’s reintroduced protectionist trade policies, particularly new tariffs targeting key global economies, were fuelling uncertainty in international oil markets, driving volatility and dampening investor confidence.
 
He said: “The global oil market today is reacting sharply to the erratic tariffing policies of the new American government. These tariffs are not only aimed at China but are sweeping across multiple countries and regions. They are unsettling the balance of demand and supply, particularly in the energy sector.”
  
The NMDPRA boss explained that the unpredictability surrounding the U.S. government’s economic direction was forcing investors and traders into short-term, high-risk decisions.
 
“The problem is not just the tariffs,” Ahmed explained: “It is the inconsistency. One day, a major policy is announced; the next, it is reversed or escalated. This kind of back-and-forth has made it almost impossible for investors to make long-term plans.”
 
Ahmed’s remarks came at a time Nigerian authorities were already grappling with forex pressures, slow subsidy reforms, and efforts to attract investment under the Petroleum Industry Act (PIA).

DECRYING that MAN members who are exporters in agro-processing, chemicals and pharmaceutical, basic metal, iron and steel, non-metallic mineral products and other light industrial manufacturing rely heavily on the U.S. for market access, he said with increased costs for American buyers due to the tariffs, demand for Nigerian products is expected to decline significantly.

According to the National Bureau of Statistics (NBS), agricultural exports accounted for over N4.42 trillion in 2024, with the U.S. being one of the top destinations. The tariff could potentially wipe out N1 trillion to N2 trillion of that figure yearly.
 
Adding that the U.S remains one of Nigeria’s most significant trade partners, accounting for approximately seven per cent of non-oil exports, he said last year, bilateral trade between the two countries stood at N9.59 trillion, representing 6.9 per cent of Nigeria’s total trade volume.
  
“Of this, Nigerian exports to the U.S. amounted to N5.52 trillion, while imports from the U.S. stood at N4.07 trillion. The new tariff regime directly threatens this trade dynamic, particularly in a year Nigeria is projecting an ambitious N55 trillion budget and facing the downward trend in global crude oil prices, which have already fallen below the government’s benchmark of $75 per barrel.
 
“The tariff hike, therefore, comes at a vulnerable moment when the country is just recovering from the impact of the government policy mix that has had negative effects on the manufacturing sector,” he said.
  
He pointed out that Nigeria’s manufacturing sector, which contributed 8.64 per cent to the Gross Domestic Product (GDP) in 2024, is one of the most predisposed sectors of the economy when it comes to trade policy shifts.
  
“In addition to revenue losses, the new tariffs pose a significant disincentive to firms investing in value-added manufacturing. Over the past decade, manufacturers have made concerted and strategic efforts to support the country’s transition from exporting raw commodities to semi-processed and finished goods. However, higher market-entry costs because of higher tariffs on Nigerian products reduce the profitability of such investments, making it more attractive for firms to revert to exporting raw materials. This is counter-productive to Nigeria’s industrialisation agenda and compromises the long-term goal of achieving export diversification under platforms such as the African Continental Free Trade Agreement (AfCFTA),” he said.

CONCERNS about the impact of trade war on global growth and demand for oil sent Brent crude prices plummeting by more than 20 per cent within a week to a four-year low after Trump announced his sweeping tariffs on April 2.  Oil accounts for about 90 per cent of Nigeria’s exports, and crude earnings were set to fund 56 per cent of this year’s budget.
 
The Federal Government forecasted oil at $75 a barrel in the 2024 budget; however, it has been forced to change its plan. Although prices have since recovered some ground to around $66 per barrel from below $60, they are well below the average budget assumptions of $69 across main oil exporters’ year-ahead projections, as calculated by Morgan Stanley.