The strengthening of the U.S. dollar under the leadership of President Donald Trump poses significant challenges for Nigeria’s economy, particularly in maintaining the stability of the naira and attracting foreign investments. Analysts have raised concerns about the ripple effects of Trump’s policies on global energy prices, remittances, and Nigeria’s fiscal revenue.
During his inaugural speech, President Trump outlined a series of policies aimed at bolstering the U.S. economy. He emphasized reducing energy costs by increasing crude oil and gas production, revoking electric vehicle mandates, and shifting away from environmentally focused programs such as the Green New Deal. Trump declared a “national energy emergency” and stressed his intent to make the U.S. a manufacturing hub powered by its abundant oil and gas reserves.
These policy directions could significantly influence global oil prices. As Abiola Rasaq, former economist and head of investor relations at United Bank for Africa Plc, explained, “Trump’s policies are likely to drive down global oil prices, which would reduce Nigeria’s fiscal revenue from oil exports.”
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), identified two key ways Trump’s presidency could impact the naira:
- Stronger U.S. Dollar: Trump’s policies are expected to strengthen the dollar due to improved investor confidence in the U.S. economy. A stronger dollar would likely weaken the naira, further exacerbating currency challenges.
- Rising U.S. Interest Rates: Trump’s trade and tariff policies could lead to inflation in the U.S., prompting monetary authorities to raise interest rates. Higher U.S. interest rates may reverse portfolio flows from emerging markets like Nigeria, putting additional pressure on the naira.
Yusuf also noted that Trump’s influence on global energy policies and OPEC could lead to increased energy output, potentially driving down crude oil prices. This would reduce Nigeria’s earnings from oil exports, creating further strain on the naira.
While these external pressures present challenges, analysts highlight factors that could buffer the naira from the full impact of Trump’s policies. Olatunde Omolegbe, CEO of Arthur Stevens Management Limited, emphasized the potential for economic resilience in Nigeria. According to Omolegbe, economic growth in 2025 is expected to remain robust, supported by both the oil and non-oil sectors. Government initiatives to curb oil theft and improve transparency in the oil industry, such as the Audit of Upstream Measurement Equipment and Facilities (AUMEF) and the Advance Cargo Declaration Solution (ACDS), are projected to boost domestic oil production.
The non-oil sector is also anticipated to grow, driven by improved performance in services and stronger domestic economic activity. An emerging trend among countries seeking to reduce reliance on the U.S. dollar in trade transactions has gained momentum. BRICS nations—Brazil, Russia, India, China, and South Africa—have been at the forefront of this movement. By adopting local currencies for cross-border trade, these economies aim to bolster their domestic currencies and reduce exposure to dollar-driven volatility.
Despite concerns about the impact of Trump’s policies, analysts such as Ayokunle Olubunmi, head of financial institution ratings at Agusto Consulting, suggest a wait-and-see approach. He emphasized the need to observe how these policies evolve and their eventual outcomes on global markets and Nigeria’s economy.
While Nigeria faces potential pressures from falling crude oil prices and changes in global trade dynamics, improved domestic oil production and strategic economic reforms could provide a buffer for the naira. As Nigeria continues to navigate these challenges, a balanced approach to fiscal management and diversification of revenue streams will be essential for maintaining economic stability.
