In the ever-evolving theatre of global trade, policy decisions taken in Washington can ripple across the globe—from Wall Street to the markets of Lagos, Kano, and Port Harcourt. President Donald Trump’s return to office has brought a renewed wave of protectionist fervour, marked by an expanded tariff regime that reflects his “America First” worldview. While global attention has largely focused on the United States, China, and the European Union, it is imperative that countries such as Nigeria respond not with reactive diplomacy but with a deliberate, forward-looking strategy grounded in domestic economic reform and long-term competitiveness.
The recent decision by the United States government to impose a 14% tariff on most Nigerian exports—excluding oil and gas—has introduced a new layer of complexity to Nigeria’s already delicate trade outlook. Although the affected export categories represent a relatively small share of total trade volumes, the sectors involved—agriculture, textiles, leather, and light manufacturing—are among the most promising for future diversification and industrial development. The tariff announcement has, therefore, sparked concern not only for its immediate commercial implications but for what it signals about the shifting architecture of global trade. For Nigeria, a country that has historically relied on preferential trade access to key markets, the move is a wake-up call. It underscores the urgent need to wean the economy off its dependence on externally dictated terms and to recalibrate trade relationships based on mutual competitiveness rather than asymmetrical concessions. This development also reflects a broader pattern: the growing fragility of long-standing trade arrangements such as the African Growth and Opportunity Act (AGOA), and the return of transactional bilateralism that places domestic political priorities above multilateral cooperation. Nigeria’s response to this shift must be grounded not in appeals for exemptions, but in a sober assessment of its structural vulnerabilities—and a decisive strategy to address them.
Nigeria’s reliance on instruments such as AGOA has provided short-term access to U.S. markets but has not translated into long-term structural competitiveness. While AGOA created openings in sectors like apparel and agro-processing, the country’s utilisation rates have remained consistently low compared to peers such as Kenya, Lesotho, and Madagascar. This underperformance is rooted in domestic constraints—ranging from poor infrastructure and regulatory inefficiencies to the absence of scale economies in manufacturing. Over the years, trade with the United States has remained heavily skewed in favour of crude oil exports, with limited progress in developing a robust non-oil export base. U.S. imports from Nigeria have largely reflected commodity cycles, while Nigerian imports from the U.S. consist mainly of high-value machinery, vehicles, and refined products. The result is a structurally imbalanced relationship in which Nigeria remains a supplier of raw inputs and a consumer of industrial outputs. With the reintroduction of tariffs and the global trend towards protectionism, the logic of dependency on preferential schemes is becoming increasingly untenable. Nigeria must now focus on enhancing its supply-side capabilities, improving export readiness, and negotiating trade relationships that reflect mutual benefit rather than structural subordination.
The shifting dynamics of global trade often mirror the clash of economic giants, where smaller economies bear the unintended consequences of disputes they did not initiate. Yet Nigeria can no longer afford to remain the grass trampled underfoot in such conflicts. The time has come to reposition itself—not as a passive observer, but as a strategic actor capable of shaping outcomes in its favour. This requires shedding the posture of vulnerability and embracing a new economic diplomacy grounded in capability, coherence, and confidence. As global alliances realign and preferences erode, Nigeria must assert itself not on the margins but at the table.
This moment presents an opportunity—indeed, a necessity—for Nigeria to pivot decisively toward production-driven growth. The structural imbalances exposed by recent trade developments cannot be addressed through tactical trade negotiations alone; they require a deeper commitment to building domestic industrial capacity. Central to this transformation is the development of light manufacturing, which offers a viable entry point for industrialisation in a resource-constrained environment. Sectors such as garments, footwear, and agro-processing are particularly well-suited to Nigeria’s labour force and resource base. They demand modest capital investment, have proven export potential, and are capable of absorbing a growing pool of underemployed youth. A focus on these industries would not only diversify Nigeria’s export portfolio but also reduce its reliance on volatile commodity cycles, improve value retention, and expand the formal sector. To move in this direction, however, Nigeria must confront the foundational barriers that have long undermined industrial growth—chief among them infrastructure deficits, inconsistent policy execution, and a regulatory environment that remains cumbersome and unpredictable.
The most immediate concern lies in the disproportionate role of crude oil in Nigeria’s export earnings. While oil has been excluded from the new tariffs, it remains a single point of vulnerability in our external sector. Any future shift in policy or deterioration in global demand could have serious implications for public revenue and foreign exchange stability. That the Central Bank of Nigeria was compelled to intervene with a $198 million injection to stabilise the naira following the tariff announcement speaks to how deeply exposed our economy remains to decisions taken elsewhere.
Nigeria continues to operate a trade model that privileges the export of raw materials and the import of finished goods. It is a model inherited from a colonial past that constrains job creation, weakens domestic value chains, and stunts industrial growth. Whether it is cocoa exported in bulk and re-imported as chocolate or cashew nuts shipped raw and returned as packaged snacks, the pattern is the same. We generate little value domestically and, in doing so, limit both fiscal space and developmental outcomes.
To begin to shift this pattern, Nigeria must prioritise light manufacturing and agro-processing as first steps toward industrialisation. These sectors are labour-intensive, offer strong linkages with agriculture, and do not require the scale of investment or infrastructure that heavy industry demands. Textiles, garments, footwear, and processed food products can all serve as entry points for job creation and export diversification. With the right mix of policy support and market access, they could help reverse the deindustrialisation that has characterised Nigeria’s economic story in recent decades.
Realising this potential, however, requires more than rhetoric. It demands practical steps to address the long-standing bottlenecks that hinder industrial activity. These include unreliable power supply, poor logistics infrastructure, fragmented regulatory frameworks, and limited access to affordable credit. Investors—both domestic and foreign—require greater policy clarity, macroeconomic stability, and regulatory coherence. Where reforms have been attempted, implementation has often faltered. This time must be different.
Institutional capability is equally important. Nigeria’s trade institutions must be fit for purpose. Agencies such as the Nigerian Office for Trade Negotiations and the Nigerian Export Promotion Council should be adequately funded, professionally staffed, and empowered to lead the country’s engagement in global and regional trade negotiations. Trade policy can no longer be seen as an appendage of foreign policy; it must be understood as a core element of national economic strategy.
Domestically, efforts to stimulate demand for Nigerian-made goods must continue. Public procurement policies can play a critical role in this regard. If government at all levels commits to sourcing locally manufactured goods—from furniture and uniforms to building materials and ICT components—it can help drive production, improve standards, and support enterprise development. Beyond procurement, public campaigns to promote local consumption must be backed by consistent quality assurance and consumer protection. Patriotism alone cannot sustain demand if products do not meet expectations.
Trade strategy must also include a regional lens. Nigeria’s location and market size give it a comparative advantage within West Africa and across the African continent. The African Continental Free Trade Area (AfCFTA) offers the scale, proximity, and policy framework to expand intra-African trade, build regional value chains, and deepen industrial linkages. Yet Nigeria has not fully leveraged this platform. Fragmented customs procedures, non-tariff barriers, and inadequate transport corridors continue to limit the volume and value of regional trade. At the same time, Nigeria’s long-standing membership in the Economic Community of West African States (ECOWAS) provides an additional layer of opportunity. As the region’s largest economy and a founding member of ECOWAS, Nigeria is well-positioned to lead the harmonisation of trade standards, infrastructure development, and policy alignment across West Africa. The ECOWAS Trade Liberalisation Scheme (ETLS), if implemented effectively, can provide an immediate boost to cross-border commerce by eliminating tariffs on qualified goods and reducing transaction costs for small and medium-sized enterprises. Coordinating Nigeria’s leadership across both AfCFTA and ECOWAS is not merely diplomatic; it is a strategic imperative to anchor the country as the linchpin of continental trade integration.
To operationalise this vision, Nigeria must invest in border infrastructure, digitise customs procedures, and support logistics corridors that connect its manufacturing hubs to key ECOWAS markets. The Lagos–Abidjan corridor, for instance, remains underutilised due to weak enforcement of trade protocols and poor transport connectivity. Beyond infrastructure, regulatory consistency is essential. Disparate product standards, bureaucratic delays, and overlapping authorisations often frustrate traders and discourage formal commerce. Nigeria must work closely with regional partners to streamline cross-border processes, foster mutual recognition agreements, and ensure that trade facilitation commitments are implemented in practice, not just on paper. These reforms will not only enhance Nigeria’s regional competitiveness but also increase its attractiveness to global investors seeking access to African markets.
Strategic diversification also calls for stronger engagement with emerging markets. As global supply chains shift due to geopolitical tensions and evolving cost dynamics, countries like Nigeria must position themselves as credible alternatives. With reforms in infrastructure, logistics, and regulation, Nigeria could attract investment as a manufacturing base for regional and even global markets. This will not happen overnight, but the groundwork must be laid now.
There are valuable lessons to draw from elsewhere. The success of South Korea, Taiwan, and Malaysia in developing robust manufacturing sectors was not accidental. It followed years of deliberate policy, targeted support, and investment in education, infrastructure, and institutional capacity. More recently, African countries such as Rwanda and Ethiopia have shown that investor confidence can be built through transparent governance, stable policy frameworks, and focused industrial development strategies. Nigeria can learn from these examples while tailoring its approach to local realities.
The trade challenges triggered by President Trump’s new tariff regime are not without precedent, but they come at a time when Nigeria is already grappling with a fragile macroeconomic environment, fiscal pressures, and high unemployment. These conditions heighten the urgency of reform. Yet they also provide the political justification to act boldly. Policymakers must not wait for perfect conditions. The imperative is to begin—strategically, incrementally, and with sustained commitment.
If Nigeria responds with clarity and purpose, the current moment can be a turning point. The 90-day pause is not a reprieve; it is a deadline. It is a chance to articulate and defend our interests with confidence, and to anchor our trade and industrial policy in a framework that prioritises resilience, competitiveness, and inclusive growth. The decisions we take now will shape our ability to navigate an increasingly unpredictable global economy. The choice is ours to make.
Dr Tope Fasoranti is an Economist, Banker, and Consultant on Digital Transformation
