U.S. tariffs and Nigeria’s export economy: Risks and opportunities

The recent imposition of a 14 percent tariff by the United States on Nigerian exports has raised concerns about its impact on the country’s economy. While Nigeria’s trade volume with the U.S. is relatively small—valued at about $10 billion last year—the new tariff threatens to make its exports less competitive in an already challenging global […]

The recent imposition of a 14 percent tariff by the United States on Nigerian exports has raised concerns about its impact on the country’s economy. While Nigeria’s trade volume with the U.S. is relatively small—valued at about $10 billion last year—the new tariff threatens to make its exports less competitive in an already challenging global market.

Prior to this development, many Nigerian goods entered the U.S. duty-free under the African Growth and Opportunity Act (AGOA), which was designed to boost trade between the U.S. and eligible sub-Saharan African countries. However, with these new tariffs in place, exporters fear that their access to the American market will shrink, forcing Nigeria to rethink its trade strategies.

 

Oil exports and the global energy market

Nigeria’s economy is heavily dependent on crude oil, which accounts for approximately 75 percent of its total exports. With the U.S. imposing tariffs on oil imports from other major suppliers such as Canada, analysts say global oil prices could rise, potentially benefiting Nigeria.

Energy analyst, Olabode Showumi, however, warns that Nigeria must do more than just rely on higher prices.

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“It is good we see ourselves in a positive light, but we are not yet maximizing our capacity to add value in that sense. For now, we are just producing enough to sell, and any amount we produce, we will still sell,” he said.

Nigeria’s crude oil production had risen to 1.75 million barrels per day in early 2025, up from 1.5 million barrels per day late last year. While the country may find alternative buyers, such as China, industry players argue that Nigeria needs to increase local refining capacity to reduce its vulnerability to global trade fluctuations.

 

Agriculture and export diversification

With U.S. tariffs affecting global trade flows, China has been increasing its purchases of Nigerian agricultural commodities such as cocoa and sesame seeds. This shift provides Nigeria with an opportunity to strengthen its position as a key supplier to China.

Exporter, Ajisafini Ayodeji, believes the government should take this further by ensuring that Nigeria processes more of its agricultural products locally.

“China coming to Nigeria to seek and buy our cocoa and sesame seed is a good thing for us, but if I were in the position of policymaking, I would prefer to add value to these products. I would invite the Chinese people to Nigeria to come and establish their factories here,” he said.

Nigeria’s agricultural exports remain largely unprocessed. Official statistics show that in 2023, the country exported nearly $670 million worth of cocoa beans but only $27 million worth of chocolate. The same trend applies to sesame seeds, which are exported raw instead of as higher-value processed products like sesame oil or butter.

Senator Ahmed Abdullahi Malam Madori says this is an area where Nigeria must improve.

“This, for me, is a good opportunity for us to put on our thinking cap and to invest heavily in the agricultural sector and export finished products. Instead of exporting raw cocoa, we should be exporting chocolate. Instead of exporting raw sesame seeds, we should be exporting sesame oil or butter. These are areas we need to take advantage of while the current face-off between the U.S., China, Canada, and other countries is going on,” he said.

 

Currency devaluation and the export sector

The recent depreciation of the naira has had a mixed impact on exporters. On one hand, it has made Nigerian products cheaper in international markets, increasing their attractiveness to foreign buyers. On the other hand, the rising cost of imported raw materials and production inputs has made it harder for local manufacturers to remain competitive.

Merchant exporter, Dele Ayemibo, sees the naira’s devaluation as an advantage.

“The devaluation of the currency is actually a good one for exporters like myself. I export value-added agro products, processed foods generally. I am a merchant; I don’t have a factory, but I have a number of SMEs that produce different products. So when I get contracts from my buyers in Europe, I buy from different people and aggregate for export. The devaluation has really helped,” he said.

Soybean exports, for instance, are projected to increase significantly from 7,000 metric tons last year to 212,000 metric tons this year, according to the U.S. Department of Agriculture. This growth is driven by higher demand for non-genetically modified soybeans, which Nigeria produces in large quantities.

Ayemibo suggests that Nigeria should secure long-term export deals with China to take full advantage of the current trade realignment.

“Nigeria can increase its forex earnings from soybean exports alone. After all, we have a lot of deals with China, so we can ask China to commit to buying at least $10 billion worth of soybeans from Nigeria and give them the same worth in contract terms. Then we can go to work and produce the commodity en masse. China’s import of soybeans is about 60 percent of the global demand,” he said.

 

The China factor: Opportunities and risks

China remains Nigeria’s largest trading partner, with a trade volume of over $20 billion, according to the National Bureau of Statistics. While this relationship presents opportunities, Nigerian exporters still face stiff competition from cheaper Chinese goods, both at home and abroad.

Economist Professor Ken Ife notes that Nigeria must address key trade and investment challenges to fully benefit from shifting global dynamics.

“Foreign Direct Investment is highly competitive. People go where they spend less and experience less hassle. So, these things are affecting our capacity to export and the success of our products in the international market,” he said.

 

What lies ahead for Nigeria?

While the U.S. tariffs pose immediate challenges for Nigerian exporters, they also present an opportunity for the country to rethink its trade strategies. The government and private sector must work together to address infrastructure bottlenecks, support local manufacturing, and expand into new markets.

Experts warn that without swift policy action, Nigeria risks being left behind in the ongoing global trade realignment. Whether the country emerges stronger from this shift will depend on how well it navigates both the risks and opportunities that lie ahead.