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NIGERIA’S BALANCE OF TRADE COULD WORSEN UNDER TRUMP – ECONOMIST
President Donald Trump on Monday became the 47th president of the United States, marking his second time as the country’s top leader. The President has also taken sweeping steps to reimagine the country’s relationship with immigration, its economy, global health, among others. Prof. Godwin Oyedokun, a don at Lead City University in Ibadan, spoke to DAILY POST in an exclusive interview on Monday, discussing how these will affect Nigeria’s economic and health sectors. Excerpts:
President Trump announced the US will start drilling oil again, and Nigeria majorly relies on oil for its foreign exchange earnings, any implication for Nigeria?
The US decision to ramp up oil production could significantly impact Nigeria, as oil constitutes over 80% of its foreign exchange earnings.
Increased US production would add to the global oil supply, likely depressing prices. This would reduce Nigeria’s oil revenue and worsen foreign exchange constraints, given its dependence on crude oil exports.
Also, US shale oil often competes directly with Nigeria’s light crude. A higher supply from the US could lead to reduced demand for Nigeria’s oil in the global market, potentially worsening Nigeria’s trade balance.
Does this extend to the implementation of the 2025 Nigeria’s budget?
Nigeria’s 2025 budget is likely based on projected oil revenue and price benchmarks. If oil prices fall due to US production increases, Nigeria could face revenue shortfalls and increased borrowing. This could affect the implementation of critical infrastructure, social welfare programs, and debt servicing commitments.
The government may also resort to further borrowing, exacerbating Nigeria’s already concerning debt profile.
There’s also an executive order by Trump ending birthright citizenship in the country, some argue it will benefit Nigeria against corrupt politicians, how true is this?
If Trump ends birthright citizenship, its direct impact on Nigeria would revolve around curbing the “birth tourism” trend among wealthy Nigerians, especially politicians who seek US Citizenship for Children. Ending automatic citizenship may discourage corrupt politicians and elites from using national wealth to facilitate expensive deliveries in the US.
In the long term, it could encourage investment in Nigeria’s healthcare sector as fewer Nigerians seek birth tourism.
However, it may also harm the diaspora community, as Nigerians already in the US might face increased immigration challenges. Furthermore, ordinary Nigerians seeking better opportunities might feel the brunt of stricter immigration rules.
Last year, the US spent about $1b in Nigeria through USAID. Now Trump has said the US will reevaluate and realign its foreign aid, what’s your take on this?
The US spending $1 billion in Nigeria last year highlights its commitment to supporting sectors like health, education, and security. However, a potential revaluation under Trump could mean reductions in aid. A scaled-down foreign aid budget could negatively impact critical programs such as health campaigns (e.g., polio eradication), educational initiatives, and anti-terrorism support.
While challenging, Nigeria may need to find alternative funding sources or develop more sustainable domestic solutions to address key developmental issues.
The realignment could also mean a shift in priorities, such as focusing aid more on security cooperation rather than health or education, depending on US strategic interests in the region.
How would you react to the US withdrawing from WHO and What are the possible implications on Nigeria’s health sector?
The US’s withdrawal from the World Health Organization (WHO) could have ripple effects on Nigeria’s health sector. Key concerns include funding gap, and weaker health infrastructure.
The US is one of the largest contributors to the WHO. Its withdrawal could reduce global health funding, potentially affecting programs in Nigeria supported by the WHO, such as malaria, tuberculosis, and HIV/AIDS eradication efforts.
Nigeria relies heavily on international aid and technical assistance to combat health challenges. Reduced funding from WHO could slow progress in tackling major diseases and health emergencies.
Opportunities for Nigeria:
In addition, Nigeria may need to increase budgetary allocation to healthcare to mitigate these impacts.
However, strengthening partnerships with other countries and organizations like the European Union and the African Union could also help fill the gap left by the US withdrawal.
Your final thoughts on what Nigeria should expect under Trump presidency
While the US policies under Trump may create significant challenges for Nigeria, they also present opportunities for introspection and reform. Nigeria will need to: diversify its economy away from oil to minimize exposure to global oil price volatility, strengthen domestic healthcare and educational infrastructure to reduce dependency on foregners.
