From Aid to Trade: US Ambassador reveals new strategy for Nigeria partnership

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The United States is shifting it’s approach to engaging with Nigeria and sub-Saharan Africa, focusing on private sector-led investments rather than aid. US Ambassador to Nigeria, Richard Mills Jr, announced this new direction at the Lagos Business School’s Fireside Chat, themed “Toward a Robust US-Nigeria Commercial and Investment Partnership.”

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With bilateral trade between the US and Nigeria reaching $13 billion in 2024, making Nigeria the US’s second-largest trade partner in Africa, Mills Jr emphasized the need for mutual growth. “Over the last few decades, the United States has invested billions of dollars in Nigeria’s health, education, and agricultural sectors,” he said. “However, we have reached an inflection point. Now is the time for us both to build on the strength of these aid investments and for Nigeria to enter a new phase of vibrant private sector-led growth.

The ambassador outlined a three-pronged approach:

– *Shift from Aid to Trade*: Engage African nations as capable commercial partners, not aid recipients.

– *Private Sector-Led Growth*: Invest in development through expanding trade and private investment.

– *Mutual Growth*: Drive growth for both nations through two-way trade and investment.

To achieve this goal, the US Department of Commerce and Nigeria’s Ministry of Industry, Trade and Investment signed a Commercial and Investment Partnership (CIP) agreement last year. This five-year memorandum of understanding prioritizes:

– Agriculture

– Digital Economy

– Infrastructure

Both governments have agreed to establish working groups in these areas. Mills Jr commended Nigeria’s current administration for its reforms and “listening ears.” He noted significant economic reforms have improved macroeconomic possibilities, citing tax reform as a key example. “One US business told me that their operations in Nigeria paid 67 different federal taxes, including a tax on wheelbarrows,” he said.

However, Mills Jr highlighted that electric power distribution and transmission capacity remains a major challenge for US firms in Nigeria, particularly in the tech sector. Despite this, he remains optimistic about the potential for growth and cooperation between the two nations.

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