May 14, 2025, 7:08 AM
Nigerians Likely to Dump U.S. Products, Transfer Services as 5% Remitance Fee is Proposed
U.S. lawmakers have proposed a bill to impose a 5% excise tax on remittances sent outside its borders. Nigerians who…
New U.S. policies could affect remittance. Photo: Unsplash/Library of Congress
Culturays
Nigerians Likely to Dump U.S. Products, Transfer Services as 5% Remitance Fee is Proposed
nigerians-likely-to-dump-u-s-products-remittance-as-5-tax-is-proposed
U.S. lawmakers have proposed a bill to impose a 5% excise tax on remittances sent outside its borders. Nigerians who rely heavily on diaspora funds are at the top of this card. Numerically, the remittances that flow into Nigeria through the international money transfer operators (IMTOS) run into the billions annually.
The tax would apply to remittances sent by non-verified U.S. citizens, with verified citizens able to claim it as a credit.
This policy is part of a broader shift under President Trump’s administration, which has included stricter immigration measures, deportation efforts, and aggressive trade policies.
New policies and tariffs are not looking good in a country like Nigeria. They are translating into indirect higher costs for American electronics, agricultural machinery, software licenses, and even educational materials.
For Nigerian consumers buying U.S.-made products, prices are primarily influenced by a weaker naira. However, production costs are on the rise for U.S. products that rely on components from countries facing higher U.S. tariffs like China.
This is eventually being passed on to consumers in all markets, including Nigeria.
Nigeria’s exports to the U.S. and foreign exchange earnings are also at risk with the new tariffs. A weaker naira is making all imports, especially U.S. products, more expensive in local currency terms.
Data from the National Bureau of Statistics (NBS) show that the average price of an imported American skincare product is up by 45% and growing since the initial tariffs. Foreign-branded lotions, shampoos, and makeup are less accessible for even middle-income earners.
There is going to be a major shift in the interest in made in U.S products — not to mention a shift in immigration, ongoing in Nigeria.
How much are people willing to buy other products instead of U.S products – on a scale of 1 — 10?
That aside, the options that may be available to Nigerians if the U.S. passes the proposed remittance bill are broad, including;
- Adopt crypto and P2P platforms
Finding Alternatives for U.S. Products in Nigeria
The newly imposed US trade tariffs are starting to agitate consumers globally. It appears that Nigerians have begun to re-evaluate their reliance on American products. This trend, influenced by the ripple effects of U.S. President Donald Trump’s tariff policies, will last a long time and impact new products daily.
Coupled with the naira’s instability and persistent foreign exchange challenges, many Nigerians are starting to seek alternatives, both local and international.
More so, entrepreneurs and consumers have started prioritising local solutions, from fashion and fintech to agriculture and entertainment. Nigerian-made clothing brands, agricultural tools, and processed foods are gaining popularity as quality improves and patriotic buying increases.
The Nigerian government is actively promoting local alternatives. In sectors like oil & gas, ICT, and construction, the government enforces local content policies that require companies to use Nigerian labour, materials, and services whenever possible.
These actions form a broader economic diversification plan under initiatives like Nigeria’s Economic Sustainability Plan (ESP) and National Development Plan (2021–2025).
This will also position Nigerians to appreciate the control and sustainability that using homemade products might bring.
Notably, the U.S. recently struck a deal with China to reduce mutual tariffs. Hopefully, the effects would be reduced.
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