Manufacturers Association of Nigeria (MAN) said the 14 per cent tariff imposed on Nigerian exports to the United States of America (USA) by the President Donald Trump administration would result in a loss of between N1 trillion and N2 trillion in Nigeria?s agricultural exports to the North American country.

Likewise, Chief Executive Officer of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, yesterday, blamed the recent slump in global crude oil prices on Trump?s inconsistent tariff policies.

Ahmed said the renewed wave of aggressive tariff policies rolled out by Trump since he assumed office in January 2025 was having an adverse effect on global crude oil prices.

Director General of MAN, Mr. Segun Ajayi-Kadir, disclosed the association?s position in a statement yesterday, titled, ?MAN Position on the U.S Tariff Hike on Nigerian Manufacturing Sector and the Broader Economy.?

Ajayi-Kadir stated that the reciprocal tariffs could halt Nigeria?s industrialisation journey and transition from exporting raw commodities to semi-processed and finished goods.

Trump recently announced a complete three-month pause on all ?reciprocal? tariffs he had imposed on several countries, with the exception of China.

MAN said the hike in tariff could pose significant disincentive to firms investing in value-added manufacturing in Nigeria and constrain them to revert to exporting raw materials.

Ajayi-Kadir explained, ?MAN members who are exporters in agro-processing, chemicals and pharmaceutical, basic metal, iron and steel, non-metallic mineral products and other light industrial manufacturing rely heavily on the U.S. for market access.

?With increased costs for American buyers due to the tariffs, demand for Nigerian products is expected to decline.

?For instance, processed agricultural goods such as cocoa derivatives, sesame seeds, and ginger, which have gained modest penetration in U.S. markets, are likely to witness a drop in export volume.

?According to the National Bureau of Statistics, agricultural exports accounted for over N4.42 trillion in 2024, with the U.S. being one of the top destinations. The tariff could potentially wipe out N1 to N2 trillion of that figure annually.?

The MAN director-general stated that Nigeria?s manufacturing sector, which contributed 8.64 per cent to the country?s GDP in 2024, was one of the most predisposed sectors of the economy when it came to trade policy shifts. He added that the imposition of a 14 per cent tariff on Nigerian exports would significantly undermine the competitiveness of locally manufactured goods in the U.S. market.

He stated, ?In addition to revenue losses, the new tariffs pose a significant disincentive to firms investing in value-added manufacturing.

?Over the past decade, manufacturers have made concerted and strategic efforts to support the country?s transition from exporting raw commodities to semi-processed and finished goods.

?However, higher market-entry costs because of higher tariff on Nigerian products reduce the profitability of such investments, making it more attractive for firms to revert to exporting raw materials.

?This is counterproductive to Nigeria?s industrialisation agenda and compromises the long-term goal of achieving export diversification under platforms such as the African Continental Free Trade Agreement (AfCFTA).?

Ajayi-Kadir also stated that the implications of the tariff hike on employment in the manufacturing sector were dire, adding that it may cause many companies to reduce their production scale or downsize workforce to cut costs as export revenues fall.

He said, ?Contract manufacturers, small-scale industrialists, and firms operating in special economic zones targeting the U.S. market are likely to be worst hit.

?This could lead to job losses at a time when the national unemployment rate remains high, and youth underemployment continues to pose a socio-economic threat.?

Ajayi-Kadir added that Nigerian firms that were part of regional or global supply chains, particularly in pharmaceuticals, chemicals, foods and beverages and motor vehicle assembly, stood to lose their competitive edge as their products became less attractive to U.S. companies seeking sourcing partners.

Commenting on the effect of the tariff hike on the broader Nigerian economy, MAN stressed that there could be direct impact on Nigeria?s trade balance.

It stated that with Nigeria already grappling with a fragile external sector, any significant reduction in exports to the U.S. would erode the current trade surplus Nigeria enjoyed in its trade relations with the USA and potentially push the balance into deficit.

Ajayi-Kadir said, ?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 CBN may be forced to intervene more aggressively in the foreign exchange market, thereby reducing its buffer for managing other macroeconomic shocks.?

He also stated that the timing of the tariff decision was particularly difficult for the federal government, which had tied much of its 2025 budgetary projections to optimistic revenue assumptions.

Ajayi-Kadir stated, ?The budget, pegged at N55 trillion, assumes oil prices will average $75 per barrel throughout the fiscal year. However, the reality of the global oil market is starkly different, with current prices already falling below $60 per barrel.

?If export earnings from non-oil sectors such as manufacturing also decline due to the new U.S. tariffs, the government will face greater shortfall in revenue.

?This could lead to cuts in capital expenditures, delays in infrastructure projects, and an increase in borrowing?all of which could undermine economic growth and stability.?

The director general of MAN also said there was the inflationary dimension to consider, warning, ?As the trade environment becomes more uncertain and foreign exchange earnings dwindle, monetary authorities may be compelled to raise interest rates in a bid to control inflation and stabilise the naira.

?However, higher interest rates will increase the cost of borrowing for businesses, including manufacturers, and could stifle domestic investment.

?The ripple effects will be felt by consumers, as firms pass on higher costs through increased prices for goods and services. This will exacerbate the cost-of-living crisis and further strain household incomes.?

MAN stated that the tariff hike would halt investors? confidence in Nigeria?s economy, which had been striving to position itself as a manufacturing hub in West Africa, partly by attracting foreign direct investment from firms interested in tapping into both domestic and export markets.

Ajayi-Kadir said, ?The new tariff regime makes Nigeria a less attractive proposition for such investors, particularly those who view access to the U.S. market as a key strategic advantage.

?In 2023 alone, Nigeria?s manufacturing sector attracted over $1.6 billion in capital importations. That figure could decline significantly in 2025 if investor confidence is not restored through robust policy responses.?

Ajayi-Kadir also said MAN was wary of potential pressure on Nigeria to reciprocate by reducing its tariffs on U.S. goods in the name of so called fair trade.

But the reality, according to him, was that lowering tariffs on U.S. imports could flood the Nigerian market with subsidised goods, thereby undermining local producers.

He stated, ?Another key concern is the risk of policy diversion. Nigeria has, in recent years, made commendable strides toward achieving self-sufficiency in several manufacturing segments and diversifying away from oil.

?However, succumbing to external pressures to liberalise trade prematurely would reverse these gains. Instead of supporting domestic production, such actions would signal to investors and industrialists that Nigeria lacks a coherent long-term trade and industrial policy.

?Furthermore, the absence of institutional capacity to engage in sophisticated trade negotiations places Nigeria in a vulnerable position. While countries with advanced legal and economic institutions may be able to negotiate favourable terms, Nigeria is at a disadvantage due to capacity constraints. This could lead to suboptimal agreements that serve foreign interests more than domestic development objectives.? (THISDAY)

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