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Is Nigeria ready for a right wing America (Trump 2.0)
America’s 47th president, Donald Trump, in his inaugural speech on January 20, 2025, confidently declared the beginning of a “golden age” for America. However, for Nigerians, the idea of not being classified as a shi— country should be uppermost in our mind. As Trump seeks to deport more aliens, Nigeria must be determined to be more economically resilient.
Trump swiftly acted on his campaign promises. Among the executive orders to be enacted immediately are stricter border control, increased oil and gas production, and an upward review of tariffs. While deportations could potentially affect some Nigerians in diaspora, the likely decline in oil prices following increased U.S. oil production is a key concern for Nigeria, particularly as over 80% of the country’s export earnings come from oil and gas.
Although lower global crude prices could reduce PMS prices in Nigeria, the potential drop in export earnings and government revenue could undermine macroeconomic stability. There has never been a more critical time for Nigeria to accelerate its economic diversification
A stronger dollar & a flat naira is more likely in 2025
Donald Trump is expected to prioritize strengthening the U.S. dollar, ensuring its continued dominance on the global stage. Typically, such a shift would exert downward pressure on emerging market currencies, including the naira. However, according to the Economist Intelligence Unit (EIU), the naira is projected to strengthen through 2025, with only modest volatility despite the dollar’s global resilience.
This optimistic outlook for the naira is largely underpinned by recent economic reforms that have improved external financing conditions and boosted foreign exchange liquidity. These reforms, together with prudent monetary policies aimed at curbing inflation, are expected to support a more stable and stronger currency. Furthermore, the anticipated rise in Nigeria’s current account surplus is expected to enhance investor confidence, stabilize the foreign exchange market, and create a favorable environment for capital flow. In turn, this will likely foster macroeconomic stability and sustainable growth
In this latest edition of the Prism, the FDC Think Tank takes a deep dive into recent economic developments and their impact on your business and corporate strategy.
Enjoy your read!
