THURSDAY April 10, 2025 |
By thenewsdesk.ng
United States, US, President Donald Trump’s 14% tariff may affect Nigeria’s implementation of its 2025 budget, according to Mr. Lukman Otunuga, a Senior Market Analyst at Forextime (FXTM).
He said this imposition would also negatively affect the country’s economy and impede its growth. Otunuga stated this on Wednesday in a statement.
Otunuga insisted that the current 14 percent imposition by the U.S, may complicate the government’s ability to implement the budget based on its projection of $75 per barrel.
Otunuga emphasised that Nigeria’s exports to the U.S have ranged between $5 billion and $6 billion annually in recent years.
He explained that crude oil had shed over 13 percent in April, thereby dragging year-to-date losses closer to 15 percent in Nigeria.
He expressed that some analysts could argue that Nigeria was insulated from the trade war due to the fact that over 90 percent of its exports consisted of crude oil and gas products only, but warned the trade war may result in a global economic recession.
According to him, this was a major risk for emerging markets, especially Nigeria. He added: “Beyond trade developments, Nigeria remains exposed to volatile oil prices.
Last week, Brent and West Texas Intermediate (WTI) both recently logged their steepest weekly losses in over a year. Oil prices remain pressured by deepening trade tensions and OPEC+ announcing an unexpectedly large supply boost.
“The sharp selloff in oil could mean more pain for the naira, which is among the worst performing emerging market currencies. Naira has shed 4 percent year-to-date versus the dollar and may extend losses if lower oil translates to falling foreign exchange reserves.”
Otunuga pointed out that while the Federal Government was expected to release its latest inflation figures in mid-April, in February, its annual inflation rate dropped to 23.2 percent to its lowest level since June 2023.
Within the same period, food inflation also dropped to 23.5 percent – its lowest rate since September 2022.
