By Merit Ibe
With President Donald Trump’s tariffs threatening Nigeria’s N323.96 billion non-oil, non-energy exports to the United States, the Lagos Chamber of Commerce and Industry (LCCI) has recommended an urgent review of Nigeria’s national trade policy to reflect emerging global realities.
The chamber believes that a strategic, measured, and proactive response from the government is imperative, as the trade, tax, and customs regimes must be modernised to align with WTO rules and safeguard Nigerian interests.
President of LCCI, Gabriel Idahosa, expressed this view during the chamber’s state of the economy review, where he enjoined the government to intensify diplomatic efforts through relevant ministries to seek clarity on the rationale for the tariffs and explore pathways for reversal or renegotiation.
Idahosa said Nigeria can lead the conversations around the Africa Growth and Opportunity Act (AGOA) and other multilateral platforms to sustain the opportunities.
He emphasised that the nation must reduce over-dependence on a few trade partners by expanding bilateral trade agreements with emerging economies in Asia, Latin America, and Africa, noting the need for intra-African trade under the AfCFTA (African Continental Free Trade Area) to be aggressively promoted.
The President of the chamber said in view of the global developments due to America’s tariffs, the chamber urged the federal government to incentivise local production and value addition in agriculture, mining, and manufacturing, noting that exporting commodities in their primary state must give way to processed, finished Nigerian goods that command higher global value.
The Chamber also called on the government to build local competencies in the country’s areas of competitive advantage, particularly agriculture, solid minerals, oil & gas, etc., to build the economy to withstand the global shocks or risks that may arise from the trade war.
“In addition, we must leverage emerging opportunities to diversify the country’s exports and expand our network of trading partners to explore other potential markets.
“With the global oil market facing multiple uncertainties and prices trending downwards (currently below the budget benchmark of $75), the government needs to develop a fiscal response to address potential revenue gaps in the budget and the country’s foreign exchange earnings.
“The continued weak growth in manufacturing and agriculture suggests that the Government should give more attention to the sectors by incentivising investment in the agriculture and agro-processing sectors and addressing factors contributing to the high cost of production, including high inflation, interest rate, volatile exchange rate, and huge infrastructural gaps.
“Despite the decline recorded in food inflation, the government must remain focused on boosting food production through ongoing policy reforms and expected quick actions with the declaration of a national emergency on food security.
“During the emergency period, we expect the government to pay more attention to agricultural production infrastructure, boost food processing potentials, and sustain the fight against insecurity in affected areas.
“With the headline inflation rising again, the hope of seeing a reduction in the interest rate may go dim if the rising inflationary pressures are not controlled. With estimated disruptions to global trade becoming a concern to many and a depreciating currency, we may begin to see another phase of unabated rising inflation driven mainly by food, energy, and logistics costs.”
The chamber is sad that businesses and households have continued to suffer under a double whammy of generating their own electricity with expensive fuels and paying higher tariffs.
“Due to debt overhang, the weak financial position of the DISCOs and GENCOs has continued to overwhelm their performance. The Chamber again called on the government to sustain its reforms in the sector through an aggressive metering programme, attracting more investment into the renewable energy space, and creating an enabling environment for the states to drive electricity generation in their respective domains.
“Without fixing the power sector to perform at optimal levels, our aspiration to achieve a $1 trillion economy may remain a dream with no reality. We urge the government to remain committed to commercial partnerships signed with various renewable energy investors by granting them required licenses, providing a robust and competitive regulatory environment, and driving local content provisions in those energy projects.
“With the states now empowered to generate power in their domains, we expect to see more states becoming aggressive, like we already see in a few states. With more states depending less on the national grid, we would generate more power nationwide and improve power supply in the medium to long term.”
Commenting on the recent Gross Domestic Product (GDP) report, the President of LCCI said Nigeria’s real GDP grew consistently in all four quarters of 2024, recording 3.84 per cent growth in Q4 2024, which was the highest in three years.
He submitted that even though Nigeria’s GDP growth was positive and above IMF and World Bank projections, “Our growth figures still remain insufficient to absorb our growing labour force or significantly reduce poverty.”
He argued that the real economy or the productive sectors must be well supported to create jobs for our teeming youth population.
According to him, “The real growth of the oil refining subsector showed significant recovery after 23 quarters of contraction since Q1 2019. The government needs to sustain the achievements recorded in the oil refining sector.
“The continued weak growth in manufacturing and agriculture suggests that the government should give more attention to the sectors by incentivising investment in the agriculture and agro-processing sectors and addressing factors contributing to the high cost of production, including high inflation, interest rate, volatile exchange rate, and huge infrastructural gaps.”