The Federal Government has established a subcommittee to evaluate the direct and indirect effects of the recent US trade tariffs on Nigeria’s economy.
In a statement issued on Friday, Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance, disclosed that the Economic Management Team (EMT), led by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, met earlier this week to assess the fiscal and economic implications of the new US tariff measures.
The meeting included key ministries and agencies responsible for economic policy and management.
The statement noted, "The focus was on the recent US tariff measures and their potential impact on Nigeria’s economy. Although crude oil, Nigeria's primary export, was not directly targeted, the EMT acknowledged the resulting decline in international oil prices."
To ensure evidence-based policymaking, the EMT decided to create a subcommittee tasked with conducting a thorough review of the economic consequences of these tariffs, as well as global fluctuations in commodity prices.
The newly-formed subcommittee includes representatives from the Federal Ministry of Finance, the Ministry of Budget and Economic Planning, including the Budget Office of the Federation, and the Central Bank of Nigeria. Manga added that the subcommittee held its first meeting this week and will present its findings to the full EMT promptly.
He emphasized that the subcommittee’s formation highlights the government’s commitment to assessing economic policies and international developments, ensuring proactive management of risks to Nigeria’s economy.
Although the US tariffs did not specifically target crude oil, concerns have arisen regarding their indirect effects on oil prices and market sentiment. Global economic developments, particularly the US tariffs, have contributed to a significant decline in oil prices, dropping below Nigeria’s fiscal breakeven level of around $60 per barrel. Analysts warn that prolonged lower oil prices could lead to a current account deficit and further weaken the naira.
JP Morgan recently cautioned about potential declines in foreign portfolio investments due to global economic uncertainties, underscoring the urgency of Nigeria's response.
The Federal Government’s swift action in forming this subcommittee reflects an awareness of the challenges posed by global economic shifts and highlights efforts to ensure timely, well-informed policy decisions.
The subcommittee is expected to deliver its report soon, providing crucial insights and recommendations for Nigeria’s economic strategy in navigating the ongoing global volatility.
