Why Trump’s Presidency Stirs Anxiety in Nigeria
Donald Trump’s presidency has sent ripples across the globe, and Nigeria is no exception. From potential shifts in immigration policies affecting the Nigerian diaspora to trade policies that could disrupt vital economic ties, his “America First” agenda raises pressing questions about Nigeria’s future, writes Festus Akanbi
No power transition in any part of the world in recent times has ruffled feathers in the magnitude of that of the United States of America, where Donald Trump was sworn in as the 47th President, taking over from his predecessor, Joe Biden last week.
As it is, Nigeria is not left out in the emerging economic alignments and the ongoing global geopolitics in preparation for the Trump presidency and his confrontational style of governance.
Former Nigerian Ambassador to the United States, Joe Keshi, who spoke on the development said, “Several world leaders would be strategising on how best to deal with Donald Trump in the next four years.
“America has a global influence and most world leaders must find a way to work with him. The truth of the matter is that it’s going to be a stormy four years,” he stressed.
True to predictions, his inauguration has been trailed by positive disruption in the international economy as the International Centre for Investigative Reporting (ICIR) reported last week that global stock markets, dollar, and oil price appreciations at the international market have all been touted as the major impact of Trump’s electoral victory.
Shaping International Commerce with a 4-Point Agenda
Speaking after his inauguration on Monday, Trump laid out his new administration’s “America First” economic agenda focusing on fighting inflation, promoting oil drilling instead of green energy, taxing foreign trade, and deporting unauthorised immigrants.
He said he would issue executive orders to promote domestic oil production and reverse Biden’s policies promoting green energy and electric cars. “Today I will also declare a National Energy Emergency,” he said. “We will drill, baby, drill.”
Trump said he would establish an “External Revenue Service,” that would collect tariffs on goods imported from other countries. Meanwhile, he has pledged to impose high tariffs on foreign trade, including on Mexico, Canada, and China.
He said he would issue executive orders on immigration, a major focus of his campaign rhetoric, including deporting immigrants. Experts said the restriction on immigrants could one way or the other affect the Diaspora remittances to Nigeria.
The Central Bank of Nigeria revealed that diaspora remittances processed through International Money Transfer Operators reached $4.22bn between January and October 2024. This figure nearly doubles the $2.62bn recorded during the same period in 2023.
On the morning of Tuesday, 21 January 2025, Marco Rubio was sworn in as the 72nd Secretary of State at 9:15 a.m., addressing State Department staff shortly thereafter. In his remarks, Rubio emphasised the administration’s overarching foreign policy goals: the Trump administration was on “a very clear mission” concerning foreign policy. He said, “And that mission is to ensure that our foreign policy is centred on one thing, and that is the advancement of our national interest, which they have clearly defined through his campaign as anything that makes us stronger or safer or more prosperous, and that will be our mission.” Secretary Rubio’s words set the tone for an assertive approach to global engagement, one that prioritises American interests above multilateral considerations.
Already, experts are worried the US’ exit from WHO will undermine her capacity and the world to be prepared and able to respond to health emergencies.
As American people settle for the reality of a regime change, Nigeria and other African countries are being forced back into the drawing board to rejig their plans in line with the emerging dispensation in the international arena.
Threat to Nigeria’s Fiscal Sustainability
In the first instance, analysts are worried that Trump’s energy policy could likely threaten Nigeria’s fiscal sustainability in a country where some 90 per cent of its revenue is dependent on oil. This is the position of SB Morgen Intelligence.
In its latest report titled ‘The Ripple Effect: How Trump’s Policies Will Impact Africa’, the Lagos-based research firm stated that Nigeria’s assumption of an oil price target of $75 per day may also be punctured with Trump at the White House.
“Nigeria’s 2025 budget, which hinges on an ambitious oil price target of $75 per barrel, faces significant risks,” it said.
Trump’s “Drill, baby, drill” mantra indicates a substantial escalation in US oil production, a move expected to boost domestic drilling, asserting US energy independence as a dominant oil exporter. This surge in supply could create downward pressure on global oil prices, affecting countries dependent on oil revenues.
A fall in oil prices would undermine the economic growth projections of Nigeria, leading to potential cuts in government spending and delayed infrastructure projects.
Lower oil prices mean increased borrowing to cover budget gaps at rather outrageous interest rates for a country whose debt is expected to rise further to N187 trillion this year, according to investment and research firm Cardinalstone.
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf, said that Trump’s sweeping policy on the restart of oil drilling in the US and drive for investment would impact global oil supply, impacting Nigeria’s crude revenue and the naira.
“It will negatively impact Nigeria’s oil revenue. However, it may be positive for businesses because the reduction in crude price typically reduces the cost of energy locally. AGO, PMS, and jet fuel prices will be reduced. It is a double-edged sword,” he said.
Disruption to Global Trade
On his part, the Chairman, of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that the external revenue service announced by Trump could disrupt global trade. Writing on his X handle, Oyedele said: “During his inauguration, Trump made true his plan for external revenue service, adding, “Instead of taxing our citizens to enrich other countries, we tariff and tax other countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties, and revenue.
“This move could disrupt international trade and further complicate the already complex global tax system, highlighting the importance of our ongoing tax reforms.”
Some analysts also believe that if Trump can calm down the conflict between Russia and Ukraine, (Russia is a major oil and gas producer)- and he has the potential to do that— then we are likely to see more production of oil; if that happens, oil production will increase and prices will drop.
“It will affect Nigeria’s oil revenue, but it will benefit businesses because the local price of energy will drop. That is the nexus between what will happen with Trump’s policy and Nigeria’s domestic economy.”
Higher Dollar
Analysts fear that Trump’s “America First” agenda, which from an economic perspective means prioritising US issues is bound to produce a stronger dollar, which by definition means a relatively weaker naira—especially since the naira is often defined by its exchange rate with the dollar. A weaker Naira, in turn, leads to relatively higher prices for internationally traded goods like fuels and staple foods, all else being equal.
Likely Cut in Global Interest Rate
On the macroeconomic level, “America First” might lead to a slower global economy, which could prompt interest rate cuts around the world. This would be beneficial for Nigeria and other countries facing foreign debt challenges. It could also result in lower crude oil prices, which may have mixed effects for Nigeria: negative if we see ourselves as a net petroleum exporter, but positive if we prioritise our role as a net consumer wanting lower energy prices.
Analysts said no one can determine Trump’s stance on the African Growth and Opportunity Act (AGOA) for now, given his emphasis on America. There is the fear that this policy which has helped surge Nigeria’s bilateral trade with the United States to over $10.6bn could be halted as a result of Trump’s disposition to discontinue the policy in 2025.
There is also a growing concern that these benefits could be eliminated or significantly modified when the law is to be renewed later this year.
Elder statesman and former minister of foreign affairs, Professor Bolaji Akinyemi, has advised President Bola Tinubu to be wary of adopting a confrontational approach to issues involving Trump.
“That’s the advice I will give President Tinubu: try and avoid having a confrontation with him even if that means that he does things that annoy or does things that step on the interests of Nigeria. There are ways in which you could address his reaction without confrontation,” he stated.
