Nigeria’s trade relationship with China has never been this stronger as it has more than doubled in the last four years, having increased by 157 percent to N1.49 trillion in the first half (H1) of 2022.
According to data obtained by Investors King from the National Bureau of Statistics (NBS), Nigeria imported goods worth N1.49 trillion from China in Q2 2022, and exported goods worth N71.11 billion. This showcases a huge trade imbalance between both countries, with China having an edge due to its robust manufacturing sector compared to Nigeria.
Reacting to the trade imbalance between both countries, the Chinese ambassador to Nigeria, His Excellency, Cui Jianchun noted that China is in support of getting more products from Nigeria.
Meanwhile, the Chinese Ambassador further disclosed that some Chinese banks are weighing the prospect of setting up branches in Nigeria to leverage the growing level of transactions between both countries.
“We are looking to get Chinese banks into Nigeria to facilitate transactions if the Central Bank of Nigeria is ready,” Jianchun said in Lagos at BusinessDay’s CEO Forum, tagged Managing into the Future: Unlocking the Power of the Platform Economy,
The trade relationship between Nigeria and China started to increase astronomically when both countries signed a currency swap deal in 2018.
The swap deal was put in place to facilitate transactions between Nigeria and China to cut out intermediaries in terms of value creation, extraction, and addition, without necessarily having to go through a reserve or third currency.
The currency swap deal which was a $2.4 billion three years agreement ended in 2021 but has since been renewed.
Although the swap deal was expected to boost trade relations between both countries and reduce the need to use the dollar in bilateral trade, the deal has only widened the trade imbalance between China and Nigeria.
