Naira’s Sharp Depreciation Amid Trump’s Trade Tariffs

Naira Faces Significant Depreciation from Trade Policies

​The Nigerian naira has experienced a significant depreciation against the U.S. dollar, reaching N1,552.53 per dollar on April 3, 2025, down from N1,531.25 the previous day. This N21.28 drop marks the steepest single-day decline since March 22.

This depreciation coincides with the announcement of new U.S. tariffs under President Donald Trump, which has raised concerns about potential impacts on global trade and emerging markets like Nigeria. These tariffs have led to increased demand for U.S. dollars, further pressuring the naira.

Despite Nigeria’s net foreign exchange reserves reaching $23.11 billion at the end of 2024—the highest in over three years—the naira remains vulnerable to external shocks, including changes in U.S. trade policy. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, noted that these tariffs could signal the end of the African Growth and Opportunity Act (AGOA), potentially affecting Nigeria’s export dynamics and the naira’s stability.

While the direct impact of U.S. tariffs on Nigeria’s economy may be limited, with estimates suggesting a potential 0.1% GDP reduction if exports decline by 5%, the immediate effect on the naira has been pronounced. Analysts suggest that the global demand for oil, Nigeria’s primary export, may mitigate some adverse effects, as crude oil remains in high demand worldwide.