The global backlash triggered by U.S. President Donald Trump’s sweeping tariffs is hitting Nigerian financial markets harder than many anticipated, setting off fresh volatility in both the currency and debt markets while exposing the deep vulnerabilities in Nigeria’s export structure.
By Monday morning, as trading opened across the globe, the tremors were already visible in Nigeria. The naira came under renewed pressure, weakening sharply even as the Central Bank of Nigeria (CBN) tried to contain the situation with back-to-back dollar sales. In an early intervention that appeared coordinated and urgent, the CBN sold $124 million into the market at exchange rates ranging between N1,595 and N1,611 to the dollar. This followed a similar intervention of $197 million on Friday, taking the central bank’s total FX injection in just three trading sessions to a staggering $321 million.
However, the naira failed to hold its ground, a reflection of how thin liquidity and swelling demand are colliding with global uncertainty to overwhelm the central bank’s short-term defenses. Market participants reported heightened anxiety, with many buyers scrambling to cover obligations as rates rose further across multiple FX windows. The offshore market, which often signals broader investor sentiment, turned even more bearish, suggesting that local authorities may need more than cash to steady the tide.
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While pressure on the naira has become a familiar storyline, the real shock came from the bond market. Prices of Nigeria’s Eurobonds plunged by as much as $5 on Monday, pushing yields as high as 12 percent.
Traders and analysts blamed the selloff not on any deterioration in Nigeria’s economic data, but on a sweeping wave of investor risk-aversion spurred by Trump’s revived trade-war rhetoric. The announcement of new U.S. tariffs, an across-the-board 10 percent levy on all imports, along with targeted hikes on Chinese and Mexican goods, sent global markets into freefall.
From Hong Kong to Frankfurt to Wall Street, investors dumped risk, triggering one of the worst global corrections since the early months of the COVID-19 pandemic. The Hang Seng in Hong Kong suffered a historic 13 percent plunge, the worst single-day loss this century. In Europe, the Stoxx 600 shed nearly 6 percent, while Germany’s DAX and the U.K.’s FTSE 100 were down 6.4 and 5.1 percent, respectively. In the U.S., futures tracking the S&P 500 and Nasdaq fell more than 3 percent each, pointing to a bruising open. For emerging markets like Nigeria, which are already contending with rising debt costs, currency instability, and weak investor confidence, the timing couldn’t be worse.
But beyond market gyrations, Nigeria is also coming to terms with the structural impact of the new tariffs on its trade relationship with the United States. In a statement released on Sunday, the Federal Government acknowledged the severity of the situation. Signed by the Honourable Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, the statement confirmed that the administration views the new tariff regime as a serious challenge, particularly for Nigeria’s nascent non-oil exports.
Dr. Oduwole pointed out that while crude oil continues to dominate Nigeria’s export profile to the U.S., making up more than 90 percent of the total trade value, the new tariff policy threatens to roll back gains made under the African Growth and Opportunity Act (AGOA), a U.S. trade preference program designed to support African countries by granting duty-free access for a wide range of goods.
Nigeria’s non-oil exports to the U.S., including fertilizers, urea, processed agricultural goods, and metals like lead, account for less than 5 percent of total trade, but have been crucial to the government’s diversification drive.
According to Dr. Oduwole, the Tinubu administration is treating the development with pragmatism rather than panic. She said government officials are exploring how to turn the disruption into an opportunity to rethink Nigeria’s place in global trade, expand partnerships beyond the West, and strengthen economic fundamentals to make exporters more competitive. The administration, she added, is “fully aware of the challenges but focused on long-term resilience rather than short-term fixes.”
However, economists say the pace and scale of the disruption far outstrip the government’s ability to respond in real-time. The immediate effects are already cascading through Nigeria’s trade corridors. For small and medium-sized enterprises (SMEs) that had tailored their production to meet AGOA standards, the new tariffs amount to a sudden shutout from a market they had worked hard to access.
The frustration among exporters is growing. Many feel blindsided by a global decision made in Washington, which they say leaves them without recourse.
Even more concerning is Nigeria’s continued reliance on crude oil. Although the product remains largely shielded from the new tariff structure, that protection is far from permanent. If global crude oil prices fall, something that is not inconceivable amid slowing global demand and jittery markets, Nigeria’s already precarious fiscal position could become untenable. Oil revenues remain the mainstay of both government financing and foreign exchange inflows. Any sustained dip in crude prices would make it harder for Nigeria to service its rising external debts or fund its ambitious infrastructure plans.
Already, Nigeria is battling with the consequences of an ambitious budget predicated on external borrowing. With Eurobond yields surging, the cost of raising funds from the international market could rise beyond what is economically feasible, forcing the government to either shelve key projects or turn to more expensive domestic borrowing. Neither option is attractive.
As the pressure builds, market analysts warn that a more comprehensive policy response will be needed. While the CBN’s dollar sales are buying time, they are no substitute for a coordinated trade, fiscal, and industrial strategy that positions Nigeria to weather global headwinds.