The U.S. 14 percent tariffs on Nigeria’s exports, which has been paused for 90 days, will derail the momentum of value-added manufacturing in Africa’s most populous country, the Manufacturers Association of Nigeria (MAN) says.
The manufacturers association also warned in an April 15 note that the tariffs would shrink Nigeria’s export volumes to the world’s largest economy and undermine its efforts to diversify away from oil.
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MAN noted that the 14 percent tariffs on Nigerian exports significantly undermine the competitiveness of locally manufactured goods in the U.S. market, stressing that Nigerian manufacturers rely heavily on the world’s biggest economy for market access.
“With increased costs for American buyers due to the tariffs, demand for Nigerian products is expected to decline,” said Segun Ajayi-Kadir, director general of MAN.
“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,” he explained.
Citing data from the National Bureau of Statistics, he noted that the country’s agricultural exports accounted for N4.42 trillion in 2024, with the U.S. being one of the top destinations. He said the tariff could “potentially wipe out N1 to N2 trillion of that figure annually.”
In addition to revenue losses, MAN noted that the tariffs pose a significant disincentive to businesses investing in value-added manufacturing.
Kadir added that several manufacturers have made concerted and strategic efforts to support Nigeria’s transition from raw commodities export to semi-processed or finished goods within the last decade.
“Higher market-entry costs because of higher tariffs on Nigerian products reduce the profitability of such investments, making it more attractive for firms to revert to exporting raw materials.”
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“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).”
The MAN director-general explained that the implications on employment in the manufacturing sector are dire, noting that a drop in export revenue translates to a reduction in workforce and production to cut costs.
According to him, contract manufacturers, small-scale industrialists, and firms operating in special economic zones targeting the U.S. market are likely to be the worst hit.
This, he said, 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.
“Nigerian firms that are part of regional or global supply chains—particularly in pharmaceuticals, chemicals, foods and beverages and motor vehicle assembly—stand to lose their competitive edge, as their products become less attractive to U.S. companies seeking sourcing partners.”
On the economy, he said the U.S. protectionist measure has a direct impact on the country’s trade balance, noting that Nigeria is already grappling with a fragile external sector and any reduction in exports will erode the current trade surplus.
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“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 Central Bank of Nigeria may be forced to intervene more aggressively in the forex market, thereby reducing its buffer for managing other macroeconomic shocks.”
