The consul general of the U.S. Consulate in Lagos, Will Stevens, has revealed that Nigeria and the U.S have an annual trading relations worth $10 billion, with each country contributing around $5 billion. He pointed out that oil and gas accounts for the majority of Nigeria’s Trade under the African Growth and Opportunity Act (AGOA). Speaking during the opening ceremony of the African Growth and Opportunity Act workshop with Proper Africa in Lagos, Stevens emphasized the need for Nigeria to diversify its exports beyond oil, pointing out that oil only makes up 8% of the country’s GDP.
Osvaldo Gomez-Martinez, the Deputy US Trade Representative for Africa, explored that the AGOA presents an ideal opportunity for African countries, including Nigeria, to get duty-free access to the U.S. market. He clarified that Nigeria, one of Africa’s biggest economies with a diversified and rapidly expanding private sector, has the ability to greatly boost its exports to the US. For Nigeria to protect its Economy from the instability it currently suffers, Gomez-Martinez suggested that the country should diversify its Export base away from oil and, consequently, increase its sources of other inflows.
AGOA facilitated a more varied economic relations.
He emphasized that Nigeria has enormous on-topic potential to diversify its export base under AGOA through the Manufacturing and Agriculture sectors. Gomez-Martinez reiterated that the US is still dedicated to supporting Nigeria’s Economic Expansion in order to fulfill the two countries’ shared objectives of boosting two-way trade, generating good jobs, and promoting more prosperity. AGOA offers duty-free access to the US market for more than 1,800 products for qualified sub-Saharan African nations, in addition to the more than 5,000 products eligible for duty-free access under the Generalized System of Preferences program.
Participation in AGOA has facilitated a more varied economic relations between Nigeria and the United State, despite ongoing obstacles like trade capacity and Infrastructure problems. It also provides capacity-building initiatives and preferential trade agreements to assist Nigerian companies in boosting exports and becoming more competitive in the US market. Nigeria’s main exports to the United States under the AGOA are textiles, agricultural products, and crude oil. With the AGO set to expire in 2025, discussions are in progress to either renew or replace AGOA and Nigeria is one of the countries supporting its renewal.
U.S FDI in Nigeria totaled $5.6 billion in 2022.
Some of the industries that support the strong and expanding trade relationship between the United States and Nigeria are energy, agriculture, and technology. With bilateral trade estimated to reach over $10.billion in 2022, Nigeria has become one of the United States’ most vital African trading partners in recent years. Nigerian imports from the US totaled over $5 billion, while US exports to Nigeria also totaled over $5 billion. The U.S. government has also taken action to improve economic relations by signing agreements like a Memorandum of Understanding (MoU) to support commercial and digital partnerships.
This agreement, which was finalized in 2023, seeks to expand U.S. investments in Nigeria’s ICT sector and foster the growth of digital infrastructure. Travel, financial services, and transportation are among the major service sectors that accounted for $1.9 billion of U.S. exports in 2022. The United States maintained a $1.2 billion trade surplus in services during that year. Furthermore, in 2022, U.S. Foreign Direct Investment (FDI) in Nigeria totaled $5.6 billion, with activity in industries such technical services, information services, and mining. Nigeria invested $168 million in the United States, which is a comparatively modest amount.
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With energy, agriculture, and rising Technology sectors serving as key points for both countries, this trade and investment partnership continues to develop. Trade agreements and infrastructure development partnerships are among the initiatives to fortify relations, with increased interest in ICT and renewable energy. The United States also plays a significant role in the country’s energy and agricultural industries with American businesses supplying agricultural equipment and technology and investigating Renewable Energy projects in Nigeria. These initiatives are a component of larger trade agreements meant to increase market access and strengthen the two nations’ economic relations.