Nigeria, soft target for Trump’s bullying on trade

Nothing has caused more tension in relations between Nigeria and the United States than America’s refusal to sell arms to Nigeria. This dates to the Nigerian civil war. As General Yakubu Gowon, Nigeria’s war-time leader, once recalled, the US refused to sell fighter jets to Nigeria during the civil war, “even as they were shipping fighter jets and loads of ammunition to Zaire”. In 2014, a diplomatic row broke out following the US’s refusal to sell military hardware to Nigeria to fight its war against the Boko Haram insurgents. In protest, the Jonathan administration cancelled a military training programme with the US, and Gowon quipped: “What sort of friends are they?”
But the then US Ambassador to Nigeria, James Entwistle, explained America’s position. He said that “Before we share equipment with any country, we look at a couple of things. Does it make sense in terms of the country’s needs? The second thing we look at is the country’s human rights situation”. Given that Nigeria is often accused of brazen and gross human rights abuses, it’s understandable why, based on Entwistle’s explanation, successive US governments refused to sell military equipment to Nigeria. For instance, despite President Obama’s cordial relations with President Buhari, he did not sell arms to the Buhari government, even though the US supplied arms to countries such as Chad, Niger and Mali, according to Buhari’s spokesman, Garba Shehu, who recently claimed that “Obama failed Nigeria”.
Well, all that is now changing under President Donald Trump, America’s most idiosyncratic leader. During President Buhari’s recent visit to the White House, President Trump announced that the US would sell 12 A-Super Tucano aircraft to Nigeria. Although the US State Department published a devastating Human Rights report about Nigeria in April this year, President Trump never dwelled on that, contrary to what his predecessors would have done. He said: “They (Nigeria) were not allowed to buy helicopters in our country for various reasons, which, frankly, were not good reasons”, adding: “I worked that out; now they can get them and get them very quickly”. With a salesman’s pitch, he said: “We make the best military equipment in the world”! In Trump’s world, it’s all about strategic and commercial gain! America First!
What’s more, with President Trump, every encounter must be a win. As someone recently put it in the Financial Times, “Mr Trump must not just win – he must be seen to be winning”. And so, after announcing the sale of the military helicopters – an obvious “favour” to Nigeria – Trump piled on the pressure on Buhari. First, it was on America’s bid for the 2026 World Cup. President Trump said he wanted African countries to support the US bid, and then added menacingly: “We will be watching very closely”. Trump doesn’t do diplomatic schmoozing; he makes demands, he issues threats!
After laying down the marker on the World Cup bid, President Trump turned to the security situation in Nigeria. He condemned the burning of churches and the killing of Christians by Fulani herdsmen and vowed: “We gonna be working on that problem, and working on that problem very, very hard, because we can’t allow that to happen”. As President Trump said recently, “When I make promises, I keep them”. So, expect some manifestation of power-based politics there! To some, this is an unacceptable interference in Nigeria’s internal affairs. But, let’s face it, if Buhari won’t take the initiative to stop the appalling killings and violence by the Fulani herdsmen, why would anyone object to President Trump pressuring the Nigerian government to do the right things? I won’t.
But, for me, it’s a different matter when we come to trade, something on which President Trump has acquired global notoriety for bullying. He said recently that “Trade wars are good and easy to win”. And his tariff threats have raised the embers of trade wars. In April this year, President Trump threatened to impose 25% tariffs on imported steel products and 10% on aluminium, which would cost its trade partners a loss of $14.2 billion, and harm American consumers. He also threatened to impose high tariffs on imported cars and agricultural products from the EU and demanded that China reduce its trade surplus with the US by $200 billion over a period of two years. Several countries are livid, accusing President Trump of acting like a bully. The EU’s trade commissioner Cecilia Malmstrom put it this way: “Recently, we have seen how trade is used as a weapon to threaten and intimidate us. But we are not afraid, we will stand up to the bullies”. Unsurprisingly, China takes the same view and stance!
This is the strategic context within which to situate President Trump’s tough-talking on US-Nigeria trade during President Buhari’s recent visit to the US. Trump reminded Buhari that the US gives Nigeria “well over $1 billion in aid every year” and said Nigeria must take down its trade barriers. He said it’s very important that “we are able to sell our great agricultural products into Nigeria”, adding threateningly: “And that will happen, we are going to be working on that right away. Okay?” Trump stressed the amount of aid the US gives to Nigeria – “it’s so large you wouldn’t even believe it” – and the trade imbalance between the two countries and demanded that the US should be treated in a “reciprocal fashion”.
Nigeria is an unfair target of President Trump’s bullying tactics on trade. This is so for two reasons. First, aid is aid, and should never be tied or used as a bargaining chip to secure trade advantage. By constantly referring to how much the US gives to Nigeria in aid and then citing that as a reason why Nigeria should open its market to US exports, President Trump shows little understanding of the role of aid. This, of course, is not surprising given Trump’s election campaign promise to cut international aid across the board, and the fact that the US is one of the major developed countries that have failed to meet the UN aid spending target of 0.7% of GDP. But, let’s be clear, aid is to support development not to extract commercial gain!
Second, the trajectory of US-Nigeria trade over the past decades shows a drastic reduction in Nigeria’s trade surplus with the US. In 2016, Nigeria exported goods worth $4.2bn to the US and imported goods worth $1.9bn; so, the US had a trade deficit of $2.5bn. But it’s different with trade in services. Nigeria exported services worth only $411 million in 2016, but imported services worth $2.5 billion, putting the US services trade surplus with Nigeria at $2.1 billion. Thus, in 2016, the US goods and services trade deficit with Nigeria was a paltry $216m. When the US talks about its trade deficits, it focuses only on goods trade not on services trade where it has huge surpluses with many countries.
Yet, even with trade in goods, Nigeria’s $4.2 billion exports to the US in 2016 marked a drastic drop from the £38 billion worth of goods it exported in 2008 or even the $33 billion in 2011. The main reason for the huge fall in Nigeria’s goods exports to the US is, of course, because of the US’s near-total refusal to buy Nigeria’s oil. The second reason is Nigeria’s failure to benefit from the opportunities provided by the African Growth and Opportunity Act (AGOA) to export goods into the US. Under AGOA, Nigeria could export 6,500 products duty-free into the US market. Yet, Nigeria is Africa’s least beneficiary of AGOA. For instance, Nigeria exported only $9 million worth of agricultural products into the US in 2017.
Given that the two-way trade between Nigeria and the US is so small, Nigeria is certainly an unfair target for President Trump’s bullying on trade. Interestingly, but sadly, President Trump and President Buhari have the same protectionist worldview. They are both mercantilist; they believe that exports are good, but imports are bad! But Nigeria and America should embrace trade and economic liberalism and open their markets more to each other’s trade. Nigeria should ease access to American agricultural exports, and the US should help Nigeria address the quality infrastructure that prevents it from benefiting from the AGOA. This is not altruistic, but rational. Trade is a two-way street. Nigeria and America can’t expand trade with each other behind protectionist walls!

Olu Fasan