US tariff hike could hurt Nigeria’s export earnings, industrial growth – MAN

The Manufacturers Association of Nigeria (MAN) has warned that the 14 per cent tariff on Nigerian exports imposed by the United States could hurt the country’s manufacturing sector, reduce export earnings, and derail efforts to grow the economy.

In a statement issued on Tuesday, signed by the Director General, Segun Ajayi-Kadir, MAN said the policy would affect agro-processed goods, chemical and pharmaceutical products, and other value-added exports.

It warned that Nigeria could lose between N1 trillion and N2 trillion in annual agricultural export earnings as a result.

“Undoubtedly, the United States remains one of Nigeria’s most significant trade partners, accounting for approximately 7 percent of its non-oil exports.

“The imposition of a 14 percent tariff on Nigerian exports significantly undermines the competitiveness of locally manufactured goods in the U.S. market,” he said.

President Donald Trump announced a 10 per cent import tariff from 5 April, raising Nigerian export duties to 14 per cent. But by 9 April, he paused the tariffs for 60 countries — Nigeria included — for 90 days, excluding China.

According to MAN, the move could set back progress made in building up local industries and increasing exports of value-added products.

In 2024, total trade between Nigeria and the US stood at N9.59 trillion, with Nigeria’s exports to the US valued at N5.52 trillion. While crude oil makes up the bulk of exports, Nigeria has been pushing to grow non-oil trade, especially in agriculture and light manufacturing.

Mr Ajayi-Kadir said many of the affected products, including cocoa derivatives, sesame, and ginger, were already facing global competition. The new tariff could discourage manufacturers and farmers from adding value before exporting, and push them back toward shipping out raw commodities.

He said the situation will not only discourage investment in value-added production, but also encourage export of raw materials, which is inimical to the country’s industrialisation policy and job creation objectives.

MAN said that reduced export earnings would also weaken Nigeria’s economy.

“This will have immediate implications for the nation’s balance of payments and could result in a drawdown of foreign reserves, putting further pressure on the exchange rate. The Central Bank of Nigeria may be forced to intervene more aggressively in the forex market, thereby reducing its buffer for managing other macroeconomic shocks,” the statement read.

The group said it is also concerned that Nigeria may face pressure to reduce tariffs on American goods in return, which could hurt local industries.

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Mr Ajayi-Kadir said any reduction in tariff on imports from the US may further open the Nigerian market to influx of goods, and further strangulate the domestic manufacturing sector.

He warned that such trade decisions must take into account Nigeria’s current economic realities.

Considering the country’s low level of industrialisation, weak infrastructure, and high production cost, MAN said Nigeria should negotiate trade agreements that are strategic, and not premature and hasty.

It called on the Nigerian government to urgently review its trade policy with the US, engage in dialogue with American authorities, and protect local manufacturers from the effects of the tariff hike.