…Trade deficit, debt balloon
Bi-lateral trade deficit against Nigeria is widening in favour of China, with available data showing a steady increase in Nigeria’s importation from the Asian country, rising by 183.91% from N530.98bn in the first quarter of 2018 to N1.51tr in Q1, 2022.
According to the National Bureau of Statistics (NBS) data on foreign trade, China is responsible for the bulk of imports into Nigeria, ranking number one on the list of top 10 countries in the five quarters under review.
However, export to China is negligible, as Nigeria was missing from the nation’s top 10 export destinations in Q1, 2018 – Q1 2020, and Q1, 2022. Only in Q1, 2021 did China rank among the top 10 export destinations, when it ranked third with N190.11bn. In the same quarter, total imports from China were put at N2.01trillion.
Imports from China grew across the quarters under review. In Q1 2018, it was N530.98bn; it grew to N979.29bn in Q1 2019, and N1.11tr in Q1 2020. It was highest in Q1 2021, at N2.01tr, and dropped to N1.51tr in Q1, 2022.
According to the NBS, imports from China include motorcycles, machines for the reception of voice, electrical apparatus for line telephony, or line telegraphy, mackerel, parts of machinery for working on rubber or plastics, crude salt, compressed salt used in animal feeding, antibiotics, herbicides and more.
Nigeria’s exports to China in the period under review included, polyethylene, leather, sesamum seeds, cashew nuts, zinc ores and concentrates, lead ores, and more.
According to data from China’s customs agency, the top 5 African countries that imported the most goods from China in 2021 were Nigeria, with $23 billion, or 16 percent; South Africa, with $21 billion or 14%; Egypt, $18 billion or 12%, Ghana $8 billion or 5%, and Kenya $7 billion. Their combined imports made up more than half of all imports of Chinese goods to Africa last year.
On the other hand, Nigeria is not among the top five African exporters to China in 2021, which include South Africa, with $33bn, or 31% of total exports to China; Angola $21 bn, or 20%, and the Democratic Republic of the Congo (DRC), $12bn, or 11%, Republic of Congo $5bn, or 5%; and Zambia, with $4bn, or 4%. Their combined exports accounted for 71% of all exports to China last year.
In recent years, the bi-lateral relationship between Nigeria and China has improved. In the period under review, Nigeria’s borrowing from China increased by 89.94% to hit $3.67bn, making it the nation’s largest bilateral lender.
According to the Debt Management Office, (DMO), about $3.12bn of the loans from China are project-tied and include 11 projects such as the Nigerian Railway Corporation’s modernisation project, Abuja Light Rail project, Four Nigerian airports’ terminals expansion project (Abuja, Kano, Lagos, and Port Harcourt), and more.