Tightened US Immigration Policies Will Affect Nigeria’s Diaspora Remittances – CPPE

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has highlighted the extensive economic consequences of U.S. President Donald Trump’s policies on Nigeria.

The shift in U.S. trade, energy, and monetary policies could significantly impact oil prices, trade relations, government revenue, the exchange rate, and donor funding in Nigeria, Yusuf said.

In a statement sent to THE WHISTLER on Sunday, the CPPE boss warns that falling oil prices as a result of the Trumps order could weaken government revenue.

It said, “The United States has maintained its position as the world’s largest oil producer, accounting for 22 per cent of global production. Trump’s commitment to increasing U.S. oil output and pressuring OPEC to boost production raises the likelihood of lower crude oil prices in the near term.

“If Trump successfully mediates an end to the Russia-Ukraine war, it could further expand global oil supply as Russia contributes about 10 million barrels per day.

“This increases the risk of oil prices falling below Nigeria’s 2025 budget benchmark of $75 per barrel, potentially weakening government revenue and foreign exchange earnings.”

Additionally, he said Trump’s withdrawal from the Paris Climate Accord signals less commitment to climate change policies, allowing for increased fossil fuel investments.

While this may benefit global energy consumers with lower prices for diesel, PMS, and gas, Yusuf stresses that as an oil-dependent economy, Nigeria, faces serious “fiscal risks.”

Speaking further, Yusuf said the Trump administration’s push for economic nationalism and protectionism could disrupt global trade relations.

The potential termination of the African Growth and Opportunity Act (AGOA) puts Nigerian exports at risk, although Nigeria has yet to fully maximize its benefits.

He said, “The ongoing tariff war with major U.S. trading partners create both risks and opportunities. While some global supply chain disruptions may open gaps Nigerian businesses can fill, high inflation in the U.S. due to import tariffs could lead to costlier imports for Nigeria, worsening inflationary pressures.

“There is also a strong likelihood that new global trade alliances will emerge in response to the U.S. stance. Nigeria must be strategic in positioning itself within this evolving trade landscape.”

Highlighting the risk of a weaker currency, Yusuf noted that the Trump administration’s tariff policies and trade restrictions may trigger inflation in the U.S, prompting the Federal Reserve to tighten monetary policy.

This, he said, would push interest rates higher, strengthening the U.S. dollar.

“There is an inverse relationship between a strong dollar and weaker global currencies, including the naira. A stronger dollar will make imports more expensive for Nigerian businesses, increasing production costs and inflationary pressures.”

“Additionally, higher U.S. interest rates could lead to capital flow reversals, as investors pull funds from emerging markets like Nigeria back to the U.S., further straining Nigeria’s foreign exchange reserves.”

Subsequently he warned that diaspora remittances at risk due to ommigration crackdown as undocumented Nigerians in the U.S. face higher risks of deportation.

“With an estimated 500,000 Nigerians living in the U.S., any reduction in remittance inflows would have serious implications for household incomes and Nigeria’s foreign exchange inflows.

“In 2023, the U.S. Agency for International Development (USAID) provided Nigeria with $1.02bn in funding for critical areas such as healthcare, education, water, and sanitation.”

“The possible suspension or termination of these aid programs would create significant financing gaps, particularly in the health sector. Government agencies are already working on strategies to mitigate the impact, but a funding shortfall could slow progress in combating diseases and improving governance transparency.”

Outlining solution to build economic resilience in Nigeri, Yusuf noted that the global economy is shifting towards economic nationalism, deglobalization, and fragmentation, Nigeria must respond by deepening self-reliance in critical sectors such as energy, food, pharmaceutical, and security.

“The lessons from Trump’s policies reinforce the importance of reducing import dependence. Over-reliance on foreign economies for strategic needs leaves Nigeria vulnerable to external shocks.”

“To strengthen economic resilience, the government must intensify backward integration, promote domestic production, and protect local industries from unfair foreign competition. There should be a strong focus on achieving food security, energy security, and industrial growth through local resources,” it added.

Tightened US Immigration Policies Will Affect Nigeria’s Diaspora Remittances – CPPE is first published on The Whistler Newspaper