Tinubu’s Toughest Test: Government Mulls Budget Revisions Amid Trump’s Economic Sanctions

This new tariff, part of a broader trade dispute between the two countries, threatens to undermine Nigeria’s $6 billion annual export revenue from the U.S., potentially worsening existing economic issues like inflation and the devaluation of the naira. Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, acknowledged the economic repercussions of the U.S. tariff and voiced concerns about its impact.

Speaking at the inaugural Corporate Governance Forum in Abuja, Edun revealed that Nigeria’s economic management team, which includes both public and private sector stakeholders, will closely monitor the situation and devise strategies to mitigate the risks associated with the tariff.

“We are responsible for analyzing various scenarios and advising the government accordingly,” Edun said, adding that the government is likely to reassess key assumptions in the 2025 budget, including oil price benchmarks and projected revenues, in light of the evolving global trade dynamics.

The tariff, imposed by former President Donald Trump, is a retaliatory measure for Nigeria’s 27% tariff on American goods. However, exports related to oil and minerals have been excluded from the new tariff policy. Despite the tariff, Nigeria has maintained a trade surplus with the U.S. over the past three years, with oil and mineral exports forming the bulk of the country’s total exports.

Edun noted, “While the tariff will affect exports, the impact will remain minimal if Nigeria can sustain its oil and mineral export volumes.” He also stressed that the real challenge lies in the volatility of oil prices, which could further strain the nation’s economy. The government is already focused on boosting crude oil production and increasing non-oil revenue through the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.

In response to the ongoing trade tensions, Edun hinted at a potential strategic realignment of Nigeria’s economy, which may include a review of the national budget. The government is particularly focused on reforming State-Owned Enterprises (SOEs) that play vital roles in sectors like energy, telecommunications, infrastructure, and financial services. However, inefficiencies and poor governance in these enterprises have hindered their capacity to drive economic growth and job creation.

To address these issues, the Ministry of Finance Incorporated (MOFI) has launched a corporate governance scorecard aimed at improving transparency, accountability, and efficiency in SOE management.

“The lack of corporate governance best practices has led to fiscal leakages, reduced public trust, and undermined investor confidence. We are committed to reforms that will reposition SOEs for value creation,” Edun emphasized.

Edun commended MOFI’s efforts and called for continued strategic interventions to institutionalize the Corporate Governance Scorecard, enhance fiscal oversight, and encourage public-private partnerships (PPPs). He also highlighted the need for reforms in legal and regulatory frameworks to foster Nigeria’s economic growth.

“State-owned enterprises must adopt strong corporate governance frameworks to ensure operational excellence and financial sustainability,” Edun concluded, underscoring the importance of strengthening Nigeria’s economic institutions in response to the shifting global trade environment.