Nigeria Stands to Achieve More Trading With Her African Neighbours

For an economy with a gross domestic product of nearly $400bn, Nigeria’s trade with the rest of Africa remains small. It accounted for only $7bn in 2017, says Afreximbank, the pan-African trade finance institution.

Nigeria’s top export destinations are India and the US and the leading sources of its imports are China and Belgium, according to research from the Atlas of Economic Complexity at Harvard University.

Nigeria’s future trade, may lie in deepening relations with African neighbours and other emerging markets. “We’ll be good at south-south trade because it is easier for those partners to understand us,” according to Ubi, who heads the division of international economic relations at the Nigerian Institute of International Affairs in Lagos,.

Recommended News in-depth African economy High hopes as Pan-African free trade deal comes into force. China, at least, has benefited from understanding Nigeria. Over the past decade, Chinese state banks and contractors have helped build a 186km rail line between the cities of Abuja and Kaduna, with another line between Lagos and the northern city of Kano under construction.

While Chinese imports from Nigeria grew almost tenfold in two decades — from $182.5m in 1999 to $1.86bn last year — Chinese exports to Nigeria rocketed from $396.4m to $13.4bn, according to the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies in Washington.

 This has turned Nigeria into a “perennial importer of Chinese goods”, says a researcher. For its part, the Nigerian government rejects criticisms that it has become dependent on China.

 Recommended Nigeria Chinese investment extends its influence in Nigeria Others, meanwhile, are trying to follow China’s example. Brazil, for instance, sees opportunities in Nigeria. “The potential for trade and investment relations between Brazil and Nigeria is untapped,” says Troyjo, Brazil’s deputy economy minister for foreign trade. Brazil has been considering importing gas from Nigeria to reduce its dependence on gas purchases from Bolivia.

Russia is another country looking to increase its Nigerian trade links. The first Russia-Africa summit, staged in Sochi, saw Russian Oil Company Lukoil sign a memorandum on drilling and refining rights in Nigeria. Russia also offered to build a railway from Lagos to Calabar. “We can do a lot together,” Russian president Vladimir Putin reportedly told his Nigerian counterpart, President Muhammadu Buhari, who promptly agreed to put Nigeria-Russia relations on “a fast track”.

Closer to home, however, the case of Morocco, which in recent years has made considerable sub-Saharan investments, could prove an example to build on. It has agreed, for instance, a deal for the construction of a 5,660km pipeline bringing Nigerian natural gas to Morocco.

Recommended Russian politics Putin seeks friends and influence at first Russia-Africa summit Meanwhile, OCP, Morocco’s state-controlled phosphates giant, is keen to build a $1.5bn ammonia plant in Nigeria for use in fertilizer production.

 Such African arrangements are the sort of links that Nigeria needs more of, argues Karim El Aynaoui of the Policy Center for the New South think-tank in the Moroccan capital, Rabat. “Nigeria is big and when you are big, others are scared of you,” Mr El Aynaoui says, adding that Nigeria’s African neighbours would welcome more evidence of it wanting to do business with them rather than China, Brazil or Russia.