As Nigeria gains from Trump’s tariff enigma

The Nigerians sigh and genetic the overwhelming weight of double -digit inflation inflation that has exhausted the purchasing power of the Naira in everyone’s pocket. Ironically, the international community is seeing luminous investment opportunities in Nigeria at the same time.

Direct investors and foreign wallets are falling on each other in the hot scramble to invest in Nigeria.

It is a rather strange development triggered by underground wars in the Middle East and by the war on the beer trade generated by the enigmatic tariff excursions of Donald John Trump, Pugnace American president. The global investment climate has become very unpredictable due to the wars in the Middle East and Trump’s tariff war. The price of crude oil has been floating in recent months due to these developments.

The price of crude oil collapsed from $ 75 to $ 65 per barrel a few weeks after the declaration of Trump Tariff War against dozens of countries including American allies in Canada and the European Union (EU).

The prevalent fears that punitive tariff excursions would lit a commercial war and forced the consumption of crude oil by main industrial nations such as China were behind the fallen prices of crude oil.

Together with the drop in crude oil prices, it was a marked decline of the main equity markets from all over the world.

There were fears that the war on the beer trade would have evoked huge drop in the financial returns of the corporate bodies that led to considerably low returns on investments.

Consequently, the World Bank has downgraded its growth expected for most of the countries developed for 2025 due to uncertainty in global economic prospects.

Just as Trump’s tariff war was putting to the test the prices of global oil, Israel launched huge strikes on Iranian nuclear sites together with attacks aimed at the high military command of the country that impoverished the military leadership of Iran.

The raw prices suddenly increased when market observers have concluded that Israel will eliminate the Iranian oil production plants and cut the global daily production of at least 2 million barrels.

America has supported Israel by hitting Iran’s nuclear sites with bombs that burst into bunkers weighing 15 tons each. When Iranian oil systems were spared, oil prices collapsed from $ 75 to the barrel to $ 65 per barrel. Direct foreign investors and their counterparties in the investments in portfolio have been suspicious of global developments and are afraid of investing in developed economies and in the Middle East due to the prevalent uncertainties.

As a result, global share markets have collapsed significantly. Ironically, the development in Nigeria has challenged both the uncertainty triggered by the war in the Middle East and the Trump tariff war together with the double -digit inflation that afflicts the country internally.

Foreign portfolio investors see Nigeria as a strangely safe country for their money at the moment. The developments in the country’s economy seem to justify the perception of direct investors and foreign portfolio.

The double -digit inflation of Nigeria is heading to the south. Inflation is now around 21 %, falling 34 % in February 2025. The production of crude oil of the country which collapsed at 1.4 million barrels per day has resumed 1.7 million barrels per day.

This is the beginning of the refining of crude oil and the consequent export of refined oil products by the trail refinery have combined to improve the gain capacity in Nigeria foreign currency.

The country’s foreign reserves have increased from the endemic rate by $ 33 billion over the decades to a record of $ 40 billion in November 2024.

As a result, foreign portfolio investors are climbing to invest in the Nigerian stock market. The market then challenged the journey to the south of the global share markets while its capitalization increases. The market capitalization of the Nigerian bag (NGX) is threatening in a record of N79.7 trillion. Last Friday the NGX capitalization increased by n1.07 trillion in one day.

During the first half of 2025, foreign portfolio investors pumped a record of $ 8 billion in the NGX. The figure should double by the end of the year. The return to NGX investments during the first half of 2025 increased to 32.2 percent. The perception is that no other capital market has recorded these earnings during the period.

The fixed income tools of Nigeria as the titles of the Federal Government have become very interesting for investors all over the world.

Cardinaldstone, one of the main investors in the global financial system, examined its evaluation of the fixed income tools of Nigeria upwards.

While the World Bank has recently downgraded its growth projections for most developed countries, the International Monetary Fund (IMF) has updated its growth projections for Nigeria in 2025 from three percent to 3.4 percent after completing its consultations of article 4 with Nigeria.

Investments in Nigeria are on the rise even if the country is afflicted by one of the most catastrophic infrastructure deficits in the world. Nigeria generates a miserable 5,000 megawatt (MW) of electricity for its population of 218 million.

Adebayo Adelabu, Minister of Power of Nigeria, recently complained of the fact that private generators produce 40,000 MW of electricity every day, while public energy structures are limited to chips in scarce 5,000 MW.

The problem of the power supply is so precarious that the Producters Association of Nigeria (Man) recently complained that its members have spent an incredible trillion of N1 on diesel and petrol to feed their energy generation plants in 2024.

Experts are concerned that Nigeria can support the wave of direct foreign investments and the wallet if it takes the appropriate measures to improve its faltering infrastructures, in particular the diet.

The railway system is also deep in decay. The inability of the railway system is partially blamed with increasing food inflation. In the absence of a functional railway system, the food is evacuated by inaccessible rural agricultural communities through dilapidated roads dotted with hundreds of illegal toll gates mounted by corrupt contrast agencies that extort money from transporters. One of the transport associations recently warned that its members spend enormous sums every day on illegal doors.

The money extorted by the transporters is taken into consideration in the final cost of the evacuated foods, thus fueling food inflation. The government must develop a functional railway system together with a better power supply to support increasing foreign investments.