As U.S. tariffs loom, Nigeria braces for a shifting trade landscape with declining imports, volatile oil exports, and growing concern over non-oil sectors.
In the initial two months of 2025, goods valued at $643.1 million were imported from Nigeria to the United States, just prior to the introduction of a new tariff system by the Trump administration scheduled for April 9. Although oil and mineral exports will remain exempt, providing some protection for Nigeria's primary export products, analysts and government representatives caution that there may be significant impacts on other sectors.
Tariffs Set to Redefine Nigeria’s Trade with the US
The 14% tariff, though lower than those levied on countries like Vietnam (46%) and China (34%), has sparked concerns about the future of Nigeria’s $10 billion annual export volume to the United States. The policy threatens to undermine non-oil exports, especially agricultural and manufactured goods, which had enjoyed preferential treatment under the African Growth and Opportunity Act (AGOA).
Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, sought to downplay the alarm during the Corporate Governance Forum in Abuja, stating that the tariff’s impact would be “negligible” due to the dominance of oil and minerals, which account for 92% of Nigeria’s exports to the U.S.
“Fortunately, oil and mineral exports amounted to N5.08 trillion in 2024 out of a total N5.5 trillion in exports. The effect of tariffs is negligible if we maintain our current oil export volume,” Edun noted.
However, he also confirmed that Nigeria's economic management team is reassessing national budget assumptions in response to global economic shifts triggered by escalating trade conflicts.
Imports from Nigeria Slide Sharply Before Tariff Implementation
Trade data from the United States International Trade Commission (USITC) shows a 32.4% year-on-year decline in imports from Nigeria on a customs basis—from $951.6 million in 2024 to $643.1 million in 2025 for the January-February period. On a Cost, Insurance, and Freight (CIF) basis, imports also dropped 32%, from $979.6 million to $666.3 million over the same period.
The most substantial drop occurred in February 2025, with imports down to $286.3 million, compared to $423.6 million in February 2024. While February typically reflects a seasonal dip, the sharp year-on-year fall suggests market caution in anticipation of the impending tariffs.
Oil: Nigeria’s Lifeline in US Trade
Crude oil remains Nigeria’s trade cornerstone with the US, contributing 64.3% of total exports in early 2025. The US imported 5.3 million barrels of crude oil, valued at $413.6 million, in January and February combined.
However, February saw a significant month-on-month decline in crude oil exports: 1.8 million barrels ($142.2 million), down from 3.5 million barrels ($271.4 million) in January—representing a 47.6% drop in value.
Even though oil remains tariff-exempt, analysts warn that a weakened US demand, spurred by global trade friction and rising oil inventories, could threaten Nigeria's oil revenue in the medium term.
Export Recovery and Trade Balance Shift
Despite declining imports, Nigeria’s export performance rebounded in February. Exports totaled $474 million, up 121.5% from $214 million in January, helping to reverse a trade deficit seen earlier in the year.
The US recorded a trade deficit of $143 million with Nigeria in January, which flipped to a $187 million surplus in February. On a year-to-date basis, the balance swung from a $158.8 million deficit in 2024 to a $44.3 million surplus in 2025—a remarkable 127.9% improvement.
Outlook: A Fragile Buffer and an Uncertain Future
While Nigeria’s oil dominance in US-bound exports offers a cushion from the latest tariff pressures, non-oil sectors face significant headwinds. Experts fear a slump in competitiveness, rising costs, and reduced demand, especially in agriculture and manufacturing.
Trade experts and associations also raised alarms about a possible global trade war, pointing to consumer price hikes, a slowdown in manufacturing, and disruption of trade chains as potential consequences.
Dr. Jumoke Oduwole, Nigeria’s Minister of Industry, Trade, and Investment, echoed these concerns, emphasizing that Nigeria’s non-oil exports could be severely affected if alternative markets are not aggressively pursued.
10-Year Snapshot: Nigeria-US Trade History
Between 2015 and 2024, Nigeria’s trade with the US totaled N31.1 trillion, with N16.4 trillion in exports and N14.71 trillion in imports, according to the National Bureau of Statistics. Notable highlights include:
- 2020 exports dropped to N382.2 billion due to COVID-19.
- 2024 saw a record-high export value of N5.52 trillion, largely driven by oil.
Conclusion: A Call for Diversification
As the Trump administration’s tariffs take effect, Nigeria’s continued reliance on oil exports has provided short-term relief, but it exposes the economy to volatility. The situation underscores the urgent need for economic diversification, trade policy reform, and the development of new export markets—especially for non-oil sectors vulnerable to protectionist policies in key trade destinations like the United States.