U.S. tariffs pose significant threat to Nigeria’s economy, others, IMF warns, Renaissance Capital Africa disagree

International Monetary Fund’s managing director, Kristalina Georgieva, has expressed concerns over new U.S. tariffs, calling them a major risk to the global economy amid ongoing economic sluggishness. She expressed the concerns in a statement, following Tuesday’s announcement of the tariff measures. “We are still assessing the macroeconomic implications of the announced tariff measures,” Ms Georgieva said. She stated that these tariffs pose a “significant risk to the global outlook” during a period of slow economic growth. However, according to a recent report by Renaissance Capital Africa, titled, “The African Continent is immune to Trump’s Tariffs”, Nigeria’s exports to the United States account for approximately 2% of the country’s Gross Domestic Product (GDP). The report suggests that African countries, including Nigeria, might be relatively insulated from the effects of these tariffs, given their diversified trade networks. Still on the other hand, the report indicates that Nigeria, Algeria, and Angola could be somewhat affected due to their oil exports. However, unlike manufactured goods that may struggle to find new markets, crude oil remains in global demand and can be redirected if the US market becomes less viable. 
The commodity experts noted that the US runs the largest trade deficits with Africa’s biggest commodity exporters. While over half of South Africa’s exports to the US consist of precious metals, diamonds, jewelry, and platinum; Nigeria, Algeria, and Angola primarily export oil to the US. Now, let’s focus on why the US matters less for Nigeria.  Still going by the report, the US does not trade significantly with Africa, importing $39 billion worth of goods from the continent in 2024 – an amount that is roughly equivalent to what the US imports from Mexico or Canada in just over a month. To be clear, the US imports more from Mexico or Canada in a single day (over $1 billion) than it imports from about 40 African countries in a year. 
The IMF chief underscored the necessity of avoiding actions that could further damage the world economy. She urged the United States and its trading partners to engage in constructive dialogue. “We appeal to the U.S. and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” she said. Uncertainty in trade policies, she suggested, could further weaken investment and growth. Ms Georgieva’s remarks come as concerns grow over the impact of protectionist policies. Tariffs often lead to retaliatory measures, disrupting global supply chains and elevating costs for businesses and consumers. The U.S. announced on Wednesday a 14 per cent tariff on goods from Nigeria. The move, part of President Donald Trump’s broader protectionist trade policy, triggered uncertainty in financial markets, with Wall Street, European indices, and Asian markets all seeing turbulence.
Mr Trump’s decision to impose new tariffs on Nigeria follows months of trade tensions, with the U.S. president arguing that Nigeria has benefited unfairly from U.S. trade policies. The specific levies, which took effect immediately, include duties on key Nigerian exports such as agricultural products and manufactured goods. While the specifics of the U.S. tariffs remain under analysis, similar measures in the past have led to tensions with major trading partners. Ms Georgieva confirmed that the IMF will release a full assessment of the tariffs’ impact in the World Economic Outlook. This report will be published during the upcoming IMF/World Bank Spring Meetings. The meetings, scheduled for later this month, will bring together global financial leaders.
Many experts argue that heightened trade barriers could stifle economic progress. They caution that supply chain disruptions and increased costs could further strain fragile economies. This development also comes amid broader concerns about global economic health. With high inflation in several major economies and tightening monetary policies, additional trade tensions could exacerbate existing challenges. U.S. officials have defended their tariff policies, arguing they are necessary for protecting domestic industries. However, critics warn that such measures often lead to unintended economic consequences. The IMF has long advocated for open trade and multilateral cooperation. It believes that removing trade barriers and resolving disputes through negotiation benefits global economic stability and growth. Many leaders are urging restraint as the global economy is still recovering from multiple shocks. NAN