The Centre for the Promotion of Private Enterprise has outlined strategies to lessen the potential negative effects of United States President Donald Trump’s policies on Nigeria’s economy.
In a statement issued on Sunday, February 16, CPPE’s director and chief executive officer, Muda Yusuf, highlighted the significant changes brought about by the Trump administration in global trade dynamics, economic outlook, and geopolitical trends. According to the CPPE, the U.S. economy is undergoing unprecedented disruptions in its trade, political, and governance systems, which could have far-reaching consequences for the Nigerian economy.
The CPPE pointed out that these developments would result in both immediate and long-term impacts on various aspects of Nigeria’s economy, including energy prices, trade relations, economic diplomacy, macroeconomic stability, donor funding, and capital flows.
The statement further noted that the effects of these changes would be particularly evident in the Nigerian government’s revenue, crude oil budget benchmark, foreign exchange earnings, and inflation rates. The CPPE expressed concern that a likely drop in oil prices could reduce government revenue and foreign exchange earnings, which would, in turn, affect fiscal outlooks, government debt, and exchange rates.
The organisation also noted that with Trump’s policies, the U.S. dollar’s strength is expected to rise, leading to a weaker naira. This would result in higher import costs for domestic investors, contributing to inflationary pressures. The CPPE also warned that the Trump administration’s tariff policies could drive up import costs to the U.S., potentially prompting the U.S. Federal Reserve to tighten its monetary policy, thereby creating a high interest rate environment. This situation, the organisation warned, could lead to capital flow reversals, posing a risk to Nigeria’s exchange rate.
In light of these potential disruptions, the CPPE urged the Nigerian government to prioritize policies that promote self-reliance, especially in key sectors like energy, food, pharmaceuticals, and security. The organisation cautioned that overdependence on imports poses a significant risk to the country’s economic and social security.
The CPPE emphasized the importance of learning from past disruptions, such as the COVID-19 pandemic, which underscored the dangers of being overly reliant on other countries for strategic needs. The organisation stressed that government policies should focus on ensuring economic resilience and minimizing vulnerabilities to external shocks. Furthermore, the CPPE advocated for the localization of supply chains, as the new global economic order is increasingly shifting towards economic nationalism, deglobalization, and fragmentation.
