The Bola Tinubu-led government is considering a major reset of its economic strategy in response to a 14% tariff imposed on Nigerian exports by the United States.
The tariff, which comes as part of a broader trade dispute between the two nations, threatens to affect Nigeria’s $6 billion annual exports to the U.S., exacerbating existing economic challenges such as inflation and a weakened naira.
Wale Edun, Nigeria’s Coordinating Minister of the Economy and Minister of Finance, acknowledged the new U.S. tariff’s economic ramifications and voiced concerns about how it would affect the nation.
Speaking at the first-ever Corporate Governance Forum in Abuja, Edun disclosed that Nigeria’s economic management team, which includes both public and private sector stakeholders, will keep a careful eye on the situation’s development and suggest ways to reduce the risks associated with the tariff.
“It is our responsibility to examine the different options and scenarios and advise the government accordingly,” Edun said.
In order to adjust to the new dynamics of international commerce, he continued, the government will probably reevaluate key assumptions that underpin the 2025 budget, such as benchmarks for oil prices and anticipated revenues.
President Donald Trump announced the U.S. tariff in retaliation for Nigeria’s 27% duty on American imports.
Nigerian exports pertaining to minerals and oil, however, are not subject to the new tariff policy. Over the last three years, Nigeria has maintained a trade surplus with the United States in spite of the tariff; the bulk of Nigeria’s overall exports are made up of minerals and oil.
“Even though the tariff will affect exports, the impact will be negligible if Nigeria continues to export large quantities of minerals and oil,” Edun said.
The unpredictability of oil prices, he noted, is the true problem and might put additional pressure on the economy. The Nigerian government is already working harder to raise non-oil revenue and crude oil production through the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.
Edun alluded to a possible budget realignment as part of a strategic reorganization of Nigeria’s economy in light of the ongoing trade war.
Enhancing State-Owned Enterprises (SOEs), which are important in vital industries including energy, telecommunications, infrastructure, and financial services, is a top priority for the government. However, these businesses’ ability to spur economic expansion and job creation has been hampered by inefficiencies and bad governance.
A corporate governance scorecard was introduced by the Ministry of Finance Incorporated (MOFI) to increase accountability, efficiency, and transparency in SOE administration.
“We are starting reforms to reposition SOEs for value creation,” Edun stated. “Historically, the lack of corporate governance best practices has resulted in fiscal leakages, diminished public trust, and an erosion of investor confidence.”
Edun commended MOFI’s reform initiatives and advocated for additional strategic measures to strengthen budgetary monitoring, encourage public-private partnerships (PPPs), and institutionalize the Corporate Governance Scorecard. In order to promote the nation’s economic expansion, he also emphasized the necessity of changing the legal and regulatory structures.
“To attain operational excellence and financial sustainability, state-owned enterprises must implement strong corporate governance frameworks,” Edun said in closing, highlighting the significance of fortifying Nigeria’s economic institutions in reaction to the changing global trade environment.