TUESDAY April 8, 2025 |
By thenewsdesk.ng
The Federal Government is reassessing economic strategies and exploring potential scenarios to mitigate the possible negative impact of the United States tariffs on the Nigerian economy.
According to TheNATION newspaper reports, a multi-sectoral economic management team is critically analysing data, revenues, projections, opportunities and weak points in response to the recent 14 per cent tariff imposed by the U.S. on all products imported from Nigeria.
Minister of Finance and Coordinating Minister of the Economy Mr. Wale Edun and the Ministry of Foreign Affairs yesterday in Abuja allayed any worries over President Donald Trump’s trade policies, which continue to rattle global stakeholders.
Edun spoke at a launch of a corporate governance scorecard for government-owned enterprises, said members of the economic management team are re-evaluating national economic assumptions in the light of the new tariff regime.
The Ministry of Foreign Affairs said the government would consider all possibilities and respond appropriately.
Edun said the economic team was reviewing current projections and the underlying assumptions in the budget, particularly those for the first quarter of the year, to assess how the new external trade dynamics could impact fiscal performance and trade volumes.
According to him, the US tariffs could be a mixed bag of opportunities and challenges, and the country would respond in strategic ways that prioritise the sustainable growth of the economy.
In a wide range of tariffs targeted at the country’s trading with the U.S., President Donald Trump last week slammed a 14 per cent levy on imports from Nigeria.
The announcement sent capital across the world, including the U.S., tumbling.
Another side effect is the crash in the price of crude which is now between $65 and $67.
Edun said: “We are going back to the drawing board to look at our budget all over again.
“We have to see what changes have occurred in the assumptions that underlay the production of that budget and compare them to the reality observed in the first quarter, as well as projections.
“It’s not too bad, especially compared to countries like Vietnam that are facing 46 per cent tariffs. This situation presents Nigeria with an opportunity.
“Given our relatively stable economy and attractive investment environment, if production is becoming unfeasible in countries like Vietnam, companies can consider Nigeria instead.”
While the newly imposed tariffs are not expected to affect Nigeria’s oil and mineral exports to the U.S.—sectors that form a major component of the country’s export revenue—non-oil exports have been affected by a 14 per cent tariff, a development that calls for strategic repositioning.
Edun noted that Nigeria remains open for investors, offering competitive exchange rates, export potential, and market size.
He pointed out that Nigeria had already been applying a 27 per cent tariff on U.S. exports even before the U.S. imposed its own.
A spokesperson for the Ministry of Foreign Affairs, Kimiebi Ebienfa, said relevant stakeholders were studying the situation.
“Countries impose tariffs, which are generally taxes on imported goods, for several economic, political, and strategic reasons.
“These include the protection of domestic industries and promotion of job creation, increase in government revenue, retaliation against unfair trade practices, correcting trade imbalances, etc.
“Relevant stakeholders are studying the situation. Rest assured that the government will critically analyse the impact of the new tariffs on the nation’s economy and respond appropriately in the interest of the country,” he said.
Other countries, like China, Canada, and the EU, among others, have responded to Trump’s tariffs slammed on them, which took effect on Saturday.
Minister of Foreign Affairs, Ambassador Yusuf Maitama Tuggar had last Friday engaged the U.S. Deputy Secretary of State, Christopher Landau virtually.
A statement from the Ministry was however silent on whether the new tariffs issue was part of the discussions.
But Tuggar and Landau were said to have stressed the importance of strengthening commercial ties, enhancing security collaboration, and deepening diplomatic engagements.
Landau was said to have reiterated U.S. commitment to a strong and enduring partnership with Nigeria.
“During the meeting, Tuggar and Landau highlighted key areas of cooperation, including energy, technology, trade, human capital development, security, religious freedom, and immigration.
“Minister Tuggar reaffirmed Nigeria’s readiness to partner with the Trump administration to foster shared goals and enhance bilateral relations,” a statement from the Ministry of Foreign Affairs stated.
Govt committed to economic reforms
Edun reiterated the government’s commitment to ongoing economic reforms and sustainable private sector-led growth.
He pointed out that while the Federal Government accounts for just 10 per cent of Nigeria’s Gross Domestic Product (GDP), the private sector makes up the remaining 90 per cent.
He said the government was focusing on initiatives that leverage private sector investment through public-private partnerships (PPPs) and asset optimisation strategies.
According to him, one such initiative is the Highway Development and Management Initiative, which is facilitating private sector investment in key road infrastructure.
Edun highlighted the Benin-Asaba expressway project, which is expected to slash travel time from four hours to one, as a prime example of the model’s success.
He also mentioned that other road projects covering approximately 1,000 kilometres are ready for immediate concession to private developers.
He added that the Federal Government is encouraging joint ventures between state-owned enterprises and private sector players, collaborations that are intended to bring in capital and operational efficiency while also improving returns for the government.
According to him, as part of the broader reforms, the government is transitioning from a reliance on debt financing to a model that focuses more on equity and internally generated revenue.
He said the shift has been aided by the improved revenue performance of state-owned enterprises and the automation of revenue collection processes.
According to him, the Nigerian economy has shown signs of recovery over the past 18 months under the Tinubu Administration.
He cited positive metrics such as economic growth rates of between 3.8 per cent and 4.0 per cent, stabilising inflation, and declining food and fuel prices.
He explained that the corporate governance scorecard was part of a broader initiative led by the Ministry of Finance Incorporated (MOFI) to improve transparency, accountability, and performance in government-owned enterprises.
He emphasised that corporate governance must be at the heart of any organisation aspiring to go public, including entities like the Nigerian National Petroleum Company Limited (NNPC), which is considering an Initial Public Offering (IPO).
“The NNPC is the crown jewel of the Nigerian corporate sector. For it to go public, corporate governance must be at its core,” Edun said.
Power sector poor corporate governance
Minister of Power, Mr. Adebayo Adelabu, said many government-owned generating plants, despite their combined installed capacity of over 4,000 megawatts, are operating at less than 20 per cent efficiency.
“These plants, owned by the Niger Delta Power Holding Company, have failed to perform compared to privately owned plants like Azura, Transcorp, and Pacific. The difference lies in governance,” Adelabu said.
He also criticised inefficiencies at the Transmission Company of Nigeria (TCN), the only entity in the electricity value chain that is wholly government-owned.
According to him, over 100 transmission projects remain incomplete, wasting billions of naira in public funds and stalling energy reliability across the country.
Said he: “Power infrastructure must be 100 per cent complete before energisation. If 125 of those projects had been completed, the impact on power stability would have been profound.”
Managing Director of MOFI, Mr. Armstrong Takang, said only 20 out of 52 portfolio companies have audited their financial statements for the past three years.
Despite these challenges, he noted positive developments.
One of MOFI’s portfolio companies, the Bank of Industry, raised Euro 1.879 billion in the international market last year—resources that are being used to support critical sectors of the economy.
Takang urged enterprise leaders to act decisively, warning that inaction or delay in making key decisions can significantly hamper economic growth.
World Bank Country Director, Mr. Ndiyame Diop, acknowledged Nigeria’s vast portfolio of strategic assets and its potential to use them more effectively to achieve economic transformation.
He praised the Finance Ministry’s policy that ensures a portion of revenues from state-owned enterprises is immediately transferred to the federal purse—an approach that is already improving public finances.
However, Diop raised concerns over transparency, pointing out that less than half of MOFI’s portfolio companies had published audited financial statements by the end of 2023.
He called for greater adherence to governance best practices, including appointing competent board members, preparing annual financial reports, and conducting independent audits.
Doing so, he said, would help clarify the true fiscal risks associated with government-owned enterprises and enable the country to better allocate public resources.
He said the launch of the MOFI Corporate Governance Portal represented an important step toward increased transparency and value creation within Nigeria’s public enterprise sector.
