MAN: US Tariff Hike to Wipe Out N2trn from Nigeria’s Agric Exports

•Says firms in EPZs targeting United States market to be worst hit 

•Farouk Ahmed: Blame Trump’s inconsistent tariff policies for reduction in crude oil prices 

•Reveals Nigeria recorded 67% drop in petrol imports

Deji Elumoye in Abuja and Dike Onwuamaeze in Lagos

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.”

Farouk Ahmed: Blame Trump’s Inconsistent Tariff Policies for Reduction in Crude Oil Prices

Briefing newsmen at  State House, Abuja, Ahmed warned that Trump’s reintroduced protectionist trade policies – particularly new tariffs targeting key global economies – were fuelling uncertainty in international oil markets, driving volatility and dampening investors’ confidence.

He said, “The global oil market today is reacting sharply to the erratic tariffing policies of the new American government.

“These tariffs are not only aimed at China but are sweeping across multiple countries and regions. They are unsettling the balance of demand and supply, particularly in the energy sector.”

Ahmed emphasised that the unpredictability surrounding the U.S. government’s economic direction was forcing investors and traders into short-term, high-risk decisions.

According to him, “The problem is not just the tariffs. It’s the inconsistency. One day, a major policy is announced; the next, it is reversed or escalated. This kind of back-and-forth has made it almost impossible for investors to make long-term plans.”

The NMDPRA boss said many oil traders were now operating on a “daily strategy,” buying and selling within 24 hours due to fears of sudden policy swings from Washington.

“We’re seeing traders close out by the end of each day because they’re unsure what tomorrow’s news from the U.S. will bring. This isn’t healthy for the global market,” Ahmed said.

He also raised concerns that the Trump administration’s energy posture appeared to favour lower crude oil prices – possibly below the $50-per-barrel mark – through a combination of aggressive domestic drilling and strategic manipulation of global supply lines.

Ahmed explained, “There is a policy direction from the U.S. president to push crude oil prices down.

“Part of that includes encouraging massive domestic exploration and placing pressure on international suppliers through tariffs and trade negotiations.”

He warned that the drive could have ripple effects for oil-dependent economies like Nigeria, which rely heavily on crude exports for revenue and foreign exchange inflows.

Nigeria, which exports nearly 90 per cent of its crude oil, is particularly vulnerable to price fluctuations driven by external shocks.

The 2025 budget was benchmarked on a projected oil price of $74 per barrel, meaning the country could face revenue shortfalls if prices dropped significantly below that mark.

Ahmed’s remarks came at a time when the federal authorities were already grappling with forex pressures, slow subsidy reforms, and efforts to attract investment under the Petroleum Industry Act (PIA).

He warned, “The volatility we’re seeing today is not just market-driven – it’s policy-driven, coming from one of the world’s most influential economies. And for countries like Nigeria, that’s a serious concern.”

Though, Ahmed acknowledged that the oil market was naturally dynamic – affected by geopolitical tensions, regional conflicts, and OPEC+ decisions – he called for greater coordination among global powers to avoid actions that might destabilise energy markets.

The call came in the wake of a significant decline in petrol importation by Nigeria, as local refineries began to play a more active role in meeting domestic fuel demand.

According to the NMDPRA boss, the Nigeria’s petrol imports dropped from 44.6 million litres per day in August 2024 to just 14.7 million litres per day by April 13, 2025 – a reduction of nearly 30 million litres daily.

The agency attributed the sharp decline to increased production from domestic refineries, particularly the gradual restart of the Port Harcourt Refining Company and contributions from modular refinery operators.

Ahmed described the development as a positive shift towards energy self-sufficiency.

According to him: “After contributing virtually nothing in August, local refineries ramped up production to 26.2 million litres per day by early April. This marks a significant jump from just 3.4 million litres recorded in September – the first month with measurable output.”

He stated that local supply rose by a remarkable 67 per cent over the period under review, driven primarily by the resumption of operations at the Port Harcourt refinery and increased activity among modular refineries.

Despite the improvement, Ahmed pointed out that Nigeria’s total daily PMS supply surpassed the government’s benchmark consumption target of 50 million litres only twice in the past eight months—56 million litres in November 2024 and 52.3 million litres in February 2025.

He explained, “In March, supply slightly dipped below the target at 51.5 million litres per day, and in the first half of April, it further dropped to 40.9 million litres.”

Ahmed also emphasised that NMDPRA only issued import licenses based on actual supply needs, stating that the authority remains committed to balancing domestic output with strategic imports to maintain market stability.

The significant drop in petrol imports was seen as a critical step toward reducing Nigeria’s dependence on foreign fuel, strengthening energy security, and conserving scarce foreign exchange.

Ahmed stated, “Obviously, we see a downward trajectory, like I said earlier, in terms of products pricing and crude oil pricing. So we are happy, of course, as consumers of the derivatives of pricing that the price is coming low.

“But we look at globally as a nation, it’s not good for our economy, because our revenue inflow is also impacted. If the crude oil price like what happened previous week, Fridays, where they dropped in one day from about $74 $73 a barrel to 60. You can see that in terms of our production of crude oil, our revenue is impacted severely.

“So you can look at the revenue inflow into the country were compounded with the problem of vandalism and illegal bunkering and the low protection. Because recently, we just had a report from OPEC that Nigerian protection has come down to about 1.4 million barrels a day. And then, if we lose the price to by $10, you can see the negative impact to our economy, to our national reserves, as well as across the strength of our naira.”

He added, “But again, when you look at the products market, we are happy to say, Oh, the price is coming down.

“So this volatility will continue, because as recent as yesterday, when President Trump again exempted some sectors from tariff, particularly to China, like in terms of vehicular tariffing, You saw the market again, started to go up. So this is how it will continue to show. Just to give you a general perspective of the oil industry.”

On refining operations, the NMDPRA CEO explained that six licenced private and four public refineries currently produced 1.12 million barrels per day.

According to Ahmed, “Six licensed private plants account for 679,500 bpd of the total. The Dangote single train complex refines 650,000 bpd.

“Other modular sites include Aradel (11,000 bpd), OPAC (10,000 bpd) and Waltersmith (5,000 bpd), Duport Midstream Limited (2,500 bpd) and Edo Refining and Petrochemicals Company Limited (1000 bpd).

“State owned facilities add 445,000 bpd. The refurbished Port Harcourt complex (150,000 bpd), Warri (125,000 bpd), Kaduna (110,000 bpd) and the old Port Harcourt unit (60,000 bpd) make up the Nigerian National Petroleum Company Limited’s share.”

The NMDPRA boss said it had issued 47 licences to Establish (LE) covering 1.75 million bpd and 30 Licences to Construct (LC) for 1.23 million bpd. Only four plants currently held Licenses to Operate, and these together gave a 27,000 bpd in steady output.

Ahmed said five LTC projects, with a combined capacity of 689,500 bpd, were at the commissioning or construction stage, including Dangote with 650,000 bpd. Smaller builds included AIPCC Energy’s 30,000 bpd plant and Waltersmith’s 5,000 bpd second train..