Nigeria and China agree to strengthen $12 billion annual trade

The Nigerian and Chinese Governments have agreed to boost the volume of trade between both countries which FG says is over $12 billion.

This was disclosed on Thursday by the Permanent Secretary,  Ministry of Industry, Trade and Investment, Dr. Evelyn Ngige at the China-Nigeria Investment Economic and Trade Promotion Conference organized by Changsha Municipal Bureau of Commerce.

China, Asia’s largest economy has increasingly become Nigeria’s most important trade partner, as Nairametrics Research recently reported that China accounts for 38% of all imports to Nigeria over the last 5 years, making it the dominant destination for Nigeria’s imports.

Trade Relations

Dr. Evelyn Ngige, represented by the Director of Trade, Mr. Suleman Audu said the Nigerian Government remained committed to providing a sustainable platform for cooperation and mutual benefit of both countries, citing that Nigeria has concluded plans that would deepen the relationship, which includes expo.

The expo titled China-Africa Economic and Trade Expo (CAETE) was scheduled to hold in Changsha, Hunan, China between June 29 and July 2, adding that the Nigeria Export Promotion Council(NEPC) would also launch the Export Trading House in China between April 19 and April 22, she said:

•  “The upcoming Expo is strategic for Africa and Asia to further improve collaborations and deepen economic relationships.
• “The world is changing rapidly and with emerging global events, economic and trade alliances are strategic for prosperity.
• “The relationship between Nigeria and China has so far been cordial and mutually beneficial.”

Trade Volumes

Ngige noted that Nigeria and China enjoy mutually beneficial bilateral trade and economic cooperation in various sectors, including agriculture, manufacturing, education, health, tourism, industry, and mining.

She said that the trade volume between both nations is over $12 billion:

• “Nigeria has continued to be China’s number one trading partner in Africa.
• “The volume of trade between the two nations stood at over 12.03 billion dollars in 2021 representing an increase of 7.1 percent in 2020.
• “This maiden conference, therefore, provides another platform for identification of areas for mutual cooperation and trust as well as economic growth and prosperity.”

Ngige also mentioned that Price Waterhouse Coopers (PWC), had projected that Nigeria would be among the top economies in the world by 2050, citing that Nigeria is one of the top investment destinations in Africa.

The Permanent Secretary said this is backed by strong economic fundamentals as Nigeria accounts for over 20 percent of Africa’s Gross Domestic Product (GDP).

Ngige added that with the African Continental Free Trade Area Agreement (AfCFTA), Nigeria was better positioned for broader economic integration and trade enhancement.

Mr. Kang Zhenlin, Deputy Mayor of Changsha Municipal People’s Government, and Chairman of Changsha Federation of Industry and Commerce introduce Hunan Province, said there would be about 30 events in 6 categories including major events, high-end forums, docking negotiations among others, he added:

• “The China-Africa Economic and Trade Expo has become an important way to strengthen economically and
  trade cooperation between China and African countries.
• “In June this year, the third China-Africa Economic and Trade Expo will be held on the theme, “Common Development for a Shared Future.”

What you should know

Nairametrics Research reported recently that Nigeria recorded a combined trade deficit of N18.3 trillion with China in the last five years, equivalent to a staggering $40 billion in net forex outflows to the second-largest economy in the world.

China accounts for 38% of all imports to Nigeria over the last 5 years, making it the dominant destination for Nigeria’s imports.

Most of what Nigeria imports from China includes manufactured goods and raw material inputs. Nigeria has chosen China as a destination hub for imports mainly due to the lower cost of Chinese goods. China is also the manufacturing hub of the world, making it easier for Nigerians to source their material inputs from the economic superpower.

However, Nigeria’s increasing dependence on Chinese imports has raised concerns about the potential impact on the country’s economic sovereignty. Nigeria currently has about $4.2 billion in external loans from China, up from $3.6 billion in 2022. This has led to fears that Nigeria may be ceding control over key sectors of its economy to China.

China ostensibly is Nigeria’s largest destination for its forex outflows as billions of dollars are converted from Naira to aid imports. Nigeria has faced one of its most difficult periods of foreign currency liquidity as a combination of limited sources and central bank capital controls depleted reserves.

Source: norvanreports.com