US trade tariffs: High time FG diversified exports — Adeseyoju

By Tunde Oso

DataPro Limited, a leading Nigeria rating agency, has said the U.S. President Donald Trump’s ‘reciprocal tariffs’ on Nigeria  makes it imperative for  the Federal Government  to  diversify exports, broaden financing sources, and prepare for an era where global politics weigh as heavily on credit conditions as local fundamentals.

Vanguard recalls that President Trump, early last month slammed a 15 per cent import tariff on Nigeria, along with some other African countries as part of a modified reciprocal tariff rates policy disclosed by the White House

In its Monthly Rating Brief for September sent to Vanguard, signed by its Managing Director, Abimbola Adeseyoju, DataPro said while Trump’s intention was to shield American industries, the ripple effects extend well beyond U.S. borders,  unsettling global trade flows, investment decisions, and the credit environment.

“For global markets and particularly for emerging economies like Nigeria and Africa at large, the consequences are both immediate and long-term.

“Trade tensions dampen export prospects. Global demand weakens when protectionism rises, and that directly affects commodity-driven economies.

“Nigeria, still heavily dependent on crude oil (over 80% of export revenues), is vulnerable to any decline in oil demand or pricing volatility. Likewise, African agricultural exporters seeking to expand into U.S. or European markets risk losing competitiveness in an environment of rising trade barriers and cautious consumer spending,” he stated.

Speaking on the global trade shocks and African realities, Adeseyoju said: “Tariffs on steel, aluminum, and a wide range of Chinese goods sparked retaliatory measures worldwide. This escalation disrupted supply chains, lifted import costs, and heightened inflationary pressures.

“While global corporates grapple with rising costs, African businesses face an added challenge: foreign exchange volatility and import dependency. In Nigeria, for instance, manufacturers reliant on imported machinery and inputs are squeezed by both higher dollar costs and weaker naira liquidity.

“Beyond trade, credit markets are feeling the tremors. Analysts note that tighter credit spreads, inflation, and slower global growth are leaving little room for error. While U.S. corporate defaults may remain stable, emerging markets face a riskier road.

“For Nigeria and other African sovereigns, this translates into higher borrowing costs in the Eurobond market and closer scrutiny from credit rating agencies. With debt sustainability already a top concern across the continent, trade-related shocks could tilt the balance for vulnerable economies.”

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