Trump Tariffs: How Nigerian SMEs Can Use the AfCFTA to Weather an Economic Storm

  The tariffs recently imposed on international goods by the United States have sparked fears of a slowdown in global trade. Nigeria, which has been hit with a 14% tax on its exports to the US, is bound to be affected by such a development. At this stage, businesses all over the world are bracing for impact as the Trump tariffs take effect.

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Nigerian SMEs, especially those dependent on transnational trade (imports or exports), may struggle to adapt to this new normal. But there are ways to lessen the risks associated with the new tariffs. One of them would be taking full advantage of the AfCFTA to engage markets in other African countries. In this article, we’ll talk about the various ways that Nigerian businesses can use that initiative to their benefit.

What is the AfCFTA? 

The African Continental Free Trade Area (AfCFTA) is the largest free trade area in the world. It was created by the African Continental Free Trade Agreement, which Nigeria formally adopted in 2019. Its aim is the establishment of a single, continent-wide market for goods and services. This would also involve the free movement of people and capital. According to the agreement, up to 90% of tariffs on goods of signatory countries will be removed, and restrictions on transportation between these countries will be minimised. This opens up a market of 1.3 billion people and a $3.4 trillion economy to businesses in Nigeria. SMEs aren’t left out. Until recently, only 16.6% of African exports went to other African countries. With the AfCFTA starting to be implemented, that percentage is expected to rise substantially.

How Can Nigerian Businesses Take Advantage of the AfCFTA?

SMES could plug some of the revenue gap created by the Trump tariffs by embracing intra-African trade. But to do that effectively, they will have to take the following steps:

Understand the AfCFTA and its Rules

As with every rules-based system, participants in the AfCFTA are expected to abide by its regulations. If you’re going to thrive in this system, you need to know the rules that guide its operations. There are a lot of resources online that both summarise the rules and lay them out in detail.

Do Your Research

You also have to understand the markets to which you intend to sell your products. For example, you can familiarise yourself with the business practices, local regulations, and social customs of those countries. The knowledge you gain will help you craft messaging, sell appropriately, and successfully establish a presence in those markets.

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Partner with Local Businesses

Partnerships with players in foreign markets give you a fast track to excelling in them. These players (e.g. local businesses) know their environment better than you, and can be a source of support, in terms of insights, advice, networks, marketing, and distribution.

Get Your Infrastructure Right

The sort of infrastructure you invest in will be determined by your business model and scale. It could be payments, platforms, logistics, transportation, or warehousing. Whatever they are, be sure that they enable transactions with clients and vendors from across the continent.

Raise the Quality of Your Products

Under the AfCFTA, you will be competing with a much larger number of businesses. So, your products have to be top quality to stand a good chance against them. You should constantly be on the lookout for ways to improve your offerings, and never settle for any level.

Utilise Digital Marketing to Reach New Markets

Digital marketing is perhaps the most cost-effective way to connect with your target market in other countries. Social media and search engines allow you to create and aim adverts at people in countries other than your own. You can reach specific audiences in your preferred country via this means.

Keep Tabs on Regulations

Rules are seldom static. You must monitor developments around the AfCFTA, to know what’s going on with it in markets that interest you. This way, you won’t get caught off guard by consequential changes to the rules.

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Final Words

The Trump tariffs are a wake-up call for Nigerian businesses to take advantage of opportunities domiciled within Africa. Even if the tariffs are lifted or adjusted downward, diversifying your customer base geographically will shield you from the worst effects of policy changes in one market.

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Got a suggestion? Contact us: editor@connectnigeria.com

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This article was first published on 4th May 2025
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