Research Document: Economic Implications of Nigeria-China Trade Relationships: The way forward

Posted Tue, Nov 28, 2023 2:55 PM

China and Nigeria have been major bilateral trading partners in recent times. While primary products dominate Nigeria’s trade with China, China’s exports to Nigeria is dominated by manufactured goods. This dissimilarity in the structure of exports has kept reinforcing the bilateral trade relationship between both countries. Meanwhile, Nigeria is China’s largest export market in sub-Saharan Africa, while China is one of Nigeria’s largest export markets worldwide. Specifically, Nigeria has a comparative advantage in fuels and basic materials, whereas China has a comparative advantage in manufactured goods, capital goods, consumer goods, intermediate goods, and mechanical and electrical goods. Furthermore, China’s ties to Nigeria are tenuous, whereas Nigeria’s ties to China are strong. This suggests that Nigeria is more dependent on China’s exports and, China is less dependent on Nigeria’s exports. There is also an important disparity in the structure of China and Nigeria’s export trade; however, it is established that the trade relationship is mutually beneficial and complements each other’s export trade. However, trade rivalry between the two nations will not only significantly reduce their respective bilateral export trade but also undermine their mutual benefits from trade. Therefore, cooperation and complementary trade policies are in both countries’ best interests.