The African Growth and Opportunity Act (AGOA) has been the foundation of trade relations between the United States and Africa since its enactment on 18 May 2000 by the U.S. Congress. Still, a wave of reciprocal tariffs that take effect today threatens to stifle the benefits. This ultimately means that Nigeria’s Minister of Industry, Trade, and Investment, Dr. Jumoke Oduwole, is immediately concerned with stronger protection for local businesses, so how will she do that?

It had happened that the United States President, Donald Trump, on Wednesday 2 April at the Rose Garden located at the White House placed levies on over 180 countries and territories, including a baseline 10 percent tariff on all imports, with higher rates for countries that the U.S. claims have significant trade surpluses or impose high barriers on American which unfortunately named Nigeria.

Africa’s largest crude oil exporter, Nigeria, has had a 14 percent import levy imposed on it, and this is supposed to be half of the rates that the Trump government deemed were the charges anytime an American company wants to export goods there.

While announcing the decision last week at the Rose Garden on an eventful Liberation Day, the president tried to emphasise what his reciprocal tariffs imply. That means: they do it to us and we do it to them. Very simple. Can’t get any simpler than that.

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Nigeria’s Minister of Industry, Trade, and Investment, Oduwole, now has her job cut out, and the focus is to protect all those vulnerable industries in her country, especially in the area of agriculture. Over in the United States, the government there also wants to protect farmers, so now who will gain the upper hand as the 14 percent tariff begins its shelf life this Wednesday?

Oduwole, in an ARISE NEWS interview published yesterday, admitted that the U.S. continues to be a vital trading partner for Nigeria, but we have to also think about our second-largest urea fertilizer lead.

Those are businesses that have been growing in market share, she adds. This gives them uncertainty; this gives them disruption to their operations, so we are working with those types of businesses.

For the past 25 years, AGOA has allowed sub-Saharan African countries like Nigeria to export nearly 7,000 products duty-free to the United States and serves as an incentive to adopt policies that strengthen the industrial capacity of African nations and to produce value-added exports, thereby giving those products a competitive edge in the US market, but will that continue under the circumstances?

The African Growth and Opportunity Act will be due for expiry by September, which is why Nigeria’s trade minister is picturing broader continent-based strategies.

So we have looked at that demographic and we identified the AfCFTA because it speaks to the women-led businesses, youth-led businesses; it speaks to the informal sector, formalising it. It speaks to MSMEs and how they can attract foreign exchange by exporting across the continent.

In essence, while AGOA aims to assist West African economies from Cameroon, Ghana, down to Nigeria, become less dependent on oil and other commodity exports, enhance their integration into the global economy, Trump 2.0 seems the appropriate time to wean off it.

There have been arguments concerning the moral fabric of the Liberation Day tariffs, as economic analysts sum up the disproportionality of it.

Bill Reinsch, a senior economics adviser with the Center for Strategic and International Studies (CSIS) told DW that everybody knows it’s nonsense and bears no relationship to what they said they were going to do, which was to be reciprocal and factor in actual trade barriers, including tariffs, but also non-tariff barriers.

There’s no evidence that they made the slightest effort to do that, says Reinsch, just around the moment Nigeria’s Minister of Industry, Trade, and Investment, Dr. Jumoke Oduwole is thinking that it’s time to really put your trade policy and your investment policy and your investment attraction strategy to play because she believes this puts you in a position where you can respond with confidence to situations like 14 percent tariffs.

Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.