A member of the Organised Private Sector (OPS) has said that President Donald Trump’s actions are already making the US economy experience disruptions, which are going to have multidimensional implications for the Nigerian economy, in both the near and long terms considering the role US plays in global trade.
The Chief Executive Officer (CEO) of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, stated this while speaking on Trump’s one-month presidency and its effect on the Nigerian economic outlook in Lagos, yesterday.
He said that there are immediate and remote consequences for energy prices, trade relations, economic diplomacy, macroeconomic stability, donor funding and capital flows. He emphatically stated that the inception of the Trump administration has remarkably changed the dynamics of global trade, global economic outlook and geopolitical trajectory. While speaking on the implications for energy prices, Dr. Yusuf said:
“The US has been the largest oil producer globally for the past six years. In 2023, for instance, the USA produced an average of 21.91 million barrels per day, which is about 22 per cent of the global oil production. The US is, therefore, in a good position to influence global oil output and prices. “The Trump administration is committed to increasing oil output to reduce energy prices in the USA and globally.
The country also has the global diplomatic clout to get OPEC to boost oil production. “To this end, Trump has signed an Executive Order creating a National Energy Dominance Council to drive the country’s energy dominance agenda.”
Additionally, he continued: “The Trump administration is committed to moderating the current global geopolitical tension, especially the RussianUkraine war, and possibly the Israeli Hamas war. “If Trump succeeds in ending the war, especially the Russian-Ukraine war, the prospects for growth in global oil output would be considerably heightened as Russia supplies about 10 mbd of oil to the global oil market.
“There is also a good chance that the current sanctions on Russia by the USA may be lifted thereafter as the relationship between the two countries normalises.” On Nigeria’s economic outlook, the CPPE boss explained that “In light of these, the scenario of a weakening of crude oil prices in the near term is therefore very high. In this context, the crude oil price benchmark of $75 per barrel in the 2025 budget may not hold.
This would impact the outlook for government revenue and foreign exchange earnings in 2025. “The decision of President Trump to opt out of the Climate change agreement the Paris Accord) also has far reaching consequences for the global oil market.
This signals less commitment to climate change concerns and the acceleration of more investment in fossil fuels by the USA. “Additionally, the sweeping imposition of trade tariffs on major US trading partners may weaken the global economic growth outlook, dampen global oil demand and depress oil prices.
“However, the upside is that energy prices would drop globally – the price of diesel, PMS Jet fuel, gas etc. This would gladden the hearts of many economic players in the country. “The transmission effect would be very fast because of the deregulated regime of the oil and gas sector.”
