Feb 5 (Lagos) - As President Trump starts applying the tariffs against major trading partners, wall street has made it clear it does not like them. Stock indices fell sharply before rebounding after there was a break in the ice with Canada and Mexico.
China has retaliated with their own tariffs after US went ahead with a 10% tariff. The retaliation is being perceived as better than expected and that has calmed the markets. If tariffs stand like this, the markets seem to be acceptable and maybe some manufacturing will return to the US as the President expects.
How does all this affect us in Nigeria?
Number one issue is crude oil prices. An agreement between US and Canada could lower global crude oil prices. Nigeria being a top crude oil exporter could see pressure on currency and it has absorbed a lot of pressure over the past 10 years. Production is on the up again and the Country could re-claim any loss in revenue with an increase in output.
The US Dollar has strengthened against other currencies. Naira has seen some strength over the past month appreciating against the Dollar. However this is backed by Dollar sales by the Federal Government and if that can continue then there could be recovery here. In absence of those sales, there could be headwinds.
Inflation has continued its relentless march in the real economy especially in food items. CBN has increased its benchmark lending rate in a bid to control it but seems like even more needs to be done at least in the short term.
reporting for easykobo.com on Wednesday, Feb 5 2025 from Lagos, Nigeria