Nigeria’s export sector faced a significant setback in the first quarter of 2025, with trade data revealing a 20.2% year-on-year decline in exports to the United States, according to a recent report by the United States Census Bureau.
The drop, driven primarily by fluctuations in crude oil shipments, underscores Nigeria’s persistent vulnerability to global oil market dynamics and highlights the urgent need for economic diversification.
The US International Trade in Goods and Services report, published in March 2025, detailed a contraction in US imports from Nigeria, which fell from $1.401 billion in Q1 2024 to $1.118 billion in Q1 2025—a $283 million reduction.
Crude oil, which constitutes over 90% of Nigeria’s exports to the US, was the primary driver of the decline. The report noted that the US imported 8.43 million barrels of crude oil from Nigeria in Q1 2025, valued at $663.8 million.
Although March saw a month-on-month increase, with 3.17 million barrels imported at a customs value of $250.2 million (or $257 million on a CIF basis, including cost, insurance, and freight), the quarterly total failed to match the previous year’s levels.
Analysts attribute the volatility to global oil market fluctuations, including shifts in US domestic energy production and a growing pivot toward cleaner energy alternatives in major economies. “Nigeria’s heavy reliance on crude oil exports leaves it exposed to external shocks,” said Dr. Aisha Bello, an economist at Lagos-based Trade Dynamics Consulting. “The data reflects not just market dynamics but also the broader challenge of Nigeria’s undiversified export base.”
In contrast, Nigeria’s imports from the US surged, rising from $1.205 billion in Q1 2024 to $1.418 billion in Q1 2025. This shift flipped the trade balance, resulting in a $300 million trade surplus in favor of the US, compared to a $195 million surplus for Nigeria in the same period last year.
A significant portion of US exports to Nigeria comprised motor vehicles and parts, with $231 million recorded year-to-date in Q1 2025. In March alone, the US exported $99 million worth of vehicles and parts, including $73 million in passenger cars, $7 million in trucks and special-purpose vehicles, and $20 million in parts.
The growing trade deficit has raised concerns about Nigeria’s economic resilience, particularly as dollar liquidity tightens. The Central Bank of Nigeria (CBN) has faced mounting pressure to stabilize the naira, intervening in the foreign exchange market with a $200 million sale following recent trade disruptions.
Compounding Nigeria’s trade woes, former US President Donald Trump, in April 2025, reintroduced a 14% reciprocal tariff on Nigerian exports, citing Nigeria’s import restrictions on 25 product categories, including agricultural produce, pharmaceuticals, and consumer goods.
The tariff posed a direct threat to Nigeria’s non-oil exports, which, though a small fraction of total exports, are critical to the country’s diversification efforts.
According to the Ministry of Industry, Trade, and Investment, non-oil exports such as agricultural commodities, urea, and manufactured goods risked significant losses under the tariff regime.
The CBN’s intervention in the forex market was partly a response to the tariff’s impact, which exacerbated pressure on the naira and threatened to deepen Nigeria’s trade deficit. However, in a temporary reprieve, the Trump administration suspended the tariffs for 90 days to allow for diplomatic negotiations. This suspension offers Nigeria a critical window to renegotiate trade terms and address the underlying issues.
WHAT YOU SHOULD KNOW
The trade data underscores a long-standing challenge for Nigeria: its overreliance on crude oil exports. With global energy demand shifting toward renewables and geopolitical alignments reshaping trade patterns, Nigeria’s economic vulnerabilities are increasingly exposed.
ALSO READ TOP STORIES FROM VERILY NEWS
