The first two months of 2025 witnessed significant trade activity between the United States and Nigeria, totaling approximately $1.33 billion. This period, just preceding the implementation of new US tariffs, saw Nigeria export $687.4 million worth of goods to the US, a 13.3% decrease compared to the same period in 2024. Conversely, US imports from Nigeria amounted to $643.1 million, a steeper decline of 32.4% year-on-year. The data, presented both on a customs basis (excluding insurance and freight) and a CIF basis (inclusive of insurance and freight), consistently showed a downward trend in US imports from Nigeria. Despite this decline, Nigeria’s trade balance with the US improved considerably, shifting from a deficit in 2024 to a surplus of $44.3 million in the first two months of 2025. This positive shift was primarily attributed to the robust export figures, particularly in February, and the simultaneous decrease in imports.
A detailed examination of the trade data reveals significant fluctuations in the monthly figures. While US imports from Nigeria decreased from $357 million in January 2025 to $286 million in February 2025, Nigerian exports to the US saw a dramatic increase from $214 million in January to $474 million in February, a remarkable 121.5% surge. This surge in exports, coupled with the dip in imports, reversed the trade deficit the US experienced with Nigeria in January, resulting in a surplus of $187 million in February. This monthly volatility underscores the dynamic nature of the trade relationship and the influence of external factors, including impending tariff changes and global market conditions.
Crude oil plays a dominant role in Nigeria’s export portfolio to the US. During the first two months of 2025, crude oil exports accounted for approximately 64.31% of Nigeria’s total exports to the US, amounting to $413.6 million. However, a closer look at the monthly figures reveals a substantial decline in crude oil exports from January to February. Both the volume and value of crude oil shipments decreased significantly, with the value dropping by 47.6%. This decline, despite the overall positive trade balance for Nigeria, highlights the vulnerability of relying heavily on a single commodity and underscores the need for diversification of exports.
The impending US tariffs, scheduled to take effect in April 2025, have raised concerns regarding their potential impact on Nigeria’s economy. While the tariffs exempt oil and mineral exports, which constitute the bulk of Nigeria’s exports to the US, other sectors, such as agriculture and manufacturing, are likely to face challenges. These sectors, which previously benefitted from preferential trade agreements like the African Growth and Opportunity Act (AGOA), may experience increased competition and higher costs, potentially impacting their competitiveness in the US market.
Nigerian Finance Minister Wale Edun, however, downplayed the potential negative impact of the tariffs. He argued that the 14% tariff imposed by the US is relatively low compared to tariffs faced by other countries, such as Vietnam and China. He further emphasized that the exclusion of oil and minerals, which comprise the vast majority of Nigeria’s exports to the US, significantly mitigates the potential economic impact. Maintaining the current volume of oil and mineral exports, he asserted, would render the tariff’s effect negligible. Nevertheless, he acknowledged the need for continuous monitoring of the global trade situation and a reassessment of the national budget to account for changing economic realities.
Despite the minister’s reassurances, experts and trade associations have expressed concerns about the potential ripple effects of the tariffs. They predict a potential disruption to the $10 billion annual trade flow between the two countries, impacting key sectors and potentially weakening demand for Nigerian oil in the US, one of its primary markets. The National Bureau of Statistics reported a combined N31.1 trillion trade volume between Nigeria and the US over the past decade, with Nigeria consistently maintaining a trade surplus. However, the new tariffs, coupled with global trade uncertainties, could significantly alter this dynamic and pose challenges for Nigeria’s long-term economic growth and stability. The situation requires careful monitoring and strategic planning to mitigate potential negative consequences and explore opportunities for diversification and strengthening other sectors of the Nigerian economy.
