US Tariff Shocks Require CBN’s Forex Stabilization Measures – Report

The Bashir Adeniyi Centre for International Trade and Investment (BACITI), a research and policy advisory hub under the Nigerian Institute of International Affairs (NIIA), has emphasised that the recent imposition of U.S. tariffs presents a critical inflection point for Nigeria’s economic future.

The Centre, in a report titled ‘BACITI Economic Insight – Trump 2.0 – Implications of the New US Trade Regime’, asserts that Nigeria must treat this development as a catalyst for deep structural reforms, particularly in its foreign exchange (forex) management and trade policy frameworks.

In response to the tariff shocks, BACITI is calling on the Central Bank of Nigeria (CBN) to adopt proactive measures to stabilise the naira and mitigate potential disruptions to foreign exchange inflows, especially those tied to non-oil exports.

The Centre recommends a coordinated macroeconomic strategy where the CBN gradually adjusts the exchange rate to avoid sudden shocks, curbs speculative forex demand, and ensures adequate foreign reserves to maintain liquidity for manufacturers and exporters.

Given the direct impact of tariffs on export volumes, the CBN is expected to play a central role in cushioning exporters and stabilising the macroeconomic environment.

This includes deploying a suite of FX management tools, maintaining transparent forex allocation systems, and ensuring timely access to foreign exchange for priority sectors such as manufacturing, agro-processing, and digital services.

BACITI further stressed that Nigeria’s over-reliance on crude oil exposes the economy to external shocks. Diversification is imperative—not just in terms of revenue sources, but also in building a robust export base that is less vulnerable to foreign trade policies.

The organisation recommends scaling up investment in priority sectors such as agro-processing, solid minerals, digital services, and value-added manufacturing.

Infrastructure development, especially affordable electricity and digital tools, is deemed critical to enhancing competitiveness in global markets.

BACITI highlights the urgent need to develop Special Economic Zones (SEZs) and Export Processing Zones (EPZs) with an emphasis on local input sourcing, which would help reduce inflationary pressures from imported goods.

To further shield Nigerian exporters from tariff-related losses, BACITI proposes that the government roll out financial support mechanisms.

These could include export rebates, low-interest credit, and tax reliefs. Such initiatives should be implemented in collaboration with the Nigerian Export Promotion Council (NEPC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to help exporters identify alternative markets and boost the resilience of small and medium-sized enterprises (SMEs).

On the fiscal front, BACITI recommends that government authorities plan for potential revenue shortfalls due to declining oil exports to the U.S.

This includes reprioritising expenditures, accelerating non-oil revenue collection, and pushing forward with critical fiscal reforms to strengthen the national budget and economic resilience.

Particular emphasis was placed on the full implementation of the Petroleum Industry Act (PIA) as a means to boost efficiency and output in the oil sector while maintaining global competitiveness.

Private sector stakeholders were also advised to play a more active role in the national response. The organised private sector—including the Lagos Chamber of Commerce and Industry (LCCI), the Nigerian Economic Summit Group (NESG), and others—should gather data on how the tariffs are impacting local businesses.

This information will be instrumental in formulating evidence-based policy proposals to the government, advocating for support measures such as logistics subsidies, temporary tax reliefs, and trade facilitation strategies.

BACITI noted that although the new U.S. tariffs may appear to be a setback, they present a strategic opportunity for Nigeria—and Africa at large—to deepen intra-African trade and fast-track the implementation of the African Continental Free Trade Area (AfCFTA).

The disruption should serve as a wake-up call for collective action towards building a more integrated, self-reliant, and resilient economic architecture across the continent.

US Tariff Shocks Require CBN’s Forex Stabilization Measures – Report is first published on The Whistler Newspaper