Nigeria Can Target Zero Tariffs with America: But Challenges Remain
By Natasha H Akpoti
Recent discussions with key U.S. policymakers, including Mark Meadows, former Chief of Staff to President Trump, reveal a unique opportunity for Nigeria to deepen trade ties with America despite current challenges. The U.S. faces over 100 million “functionally unemployed” citizens and aims to boost domestic production by sourcing raw materials and relocating some manufacturing to countries with cheaper labor. Nigeria, with its abundant natural resources and fertile lands, is well-positioned to capitalize on this shift.
Nigeria’s Untapped Potential Beyond Oil
Nigeria’s vast reserves of rare earth minerals such as monazite, columbite-tantalite (coltan), bastnasite, and xenotime—found across states like Kogi, Adamawa, and Plateau—are critical for the global Fourth Industrial Revolution. These minerals are essential for sustaining cyber-physical systems worldwide. Unfortunately, conflicts in some resource-rich areas suggest that resource control, not religion, is often the root cause.
Agriculture is another promising sector. Nigeria’s climate is free from hurricanes, frost, wildfires, and earthquakes, making it an ideal source of organic products for the U.S. market. Companies like Neutrogena could partner with Nigerian shea butter cooperatives, similar to how France’s L’Occitane and the Body Shop work with Burkina Faso and Ghana, respectively.
In Information Technology, Nigeria’s large labor force could be harnessed to establish smart hubs, potentially capturing call center jobs currently dominated by India, as Nigerians generally speak with clearer accents.
Opportunities and Challenges
The U.S. recently imposed a 14% tariff on Nigerian imports as part of a broader “Liberation Day Tariffs” initiative to address trade imbalances, which could slow Nigeria’s economic growth and reduce export competitiveness. However, this tariff also presents an opportunity for Nigeria to add value to its mineral and agricultural exports and negotiate better trade terms.
The African Growth and Opportunity Act (AGOA), which grants duty-free access to the U.S. market for eligible African countries, is set to expire in 2025. Nigerian government advocacy for its renewal and expansion is crucial to maintain and grow trade benefits.
What Nigeria Must Do
- Renew and Expand AGOA: Push for longer-term renewal beyond 2025 to provide trade stability.
- Deepen Trade Dialogues: Revise and strengthen the 2000 U.S. Trade and Investment Framework Agreement (TIFA).
- Regulate Extractive Industries: Implement laws to ensure environmental protection, social impact assessments, and local beneficiation to stop illegal mining and ensure Nigerians benefit from their resources.
- Business-Oriented Diplomacy: Appoint ambassadors skilled in business and investment facilitation to attract American investors.
- Political Will and Trust: Establish a stable and transparent political environment to attract and retain foreign investments.
Conclusion
The U.S.-Nigeria trade relationship holds immense potential if Nigeria leverages its mineral wealth, agricultural capacity, and human capital effectively. With strategic reforms, Nigeria can become a key supplier and manufacturing hub for the U.S., creating jobs and reducing poverty at home. The world is indeed Nigeria’s oyster, and with the right investments in human capital and entrepreneurship, Nigeria can lead in global trade partnerships.
Key Context from Recent Developments:
1.The U.S. 14% tariff on Nigerian imports threatens to reduce export volumes but also pushes Nigeria to add value to its exports and negotiate better terms.
2.The U.S. has supported over 5 million Nigerian farmers through partnerships aimed at enhancing food security and agricultural productivity, signaling strong bilateral cooperation in agriculture.
3.Renewing AGOA is critical, with bipartisan support in the U.S. Congress to extend it beyond 2025, ensuring continued duty-free access to American markets for Nigerian goods.
4.Strategic U.S.-Africa partnerships on critical minerals are increasing due to global supply chain vulnerabilities, offering Nigeria a chance to become a key supplier in this sector.
Senator Natasha H Akpoti Uduaghan
Kogi Central to the world 🌍
