Nigeria’s growing reliance on China as its primary import partner has triggered concern among financial analysts and economists. Speaking at the Cowry Quarterly Economic Discourse, Johnson Chukwu, the Group Managing Director of Cowry Asset Management, emphasized the risks posed by overdependence on Chinese supply chains. He warned that any future disruptions—similar to those experienced during the COVID-19 pandemic—could plunge Nigeria into inflation and economic turmoil.
Recent data from the National Bureau of Statistics affirms China’s dominant position in Nigeria’s import profile, followed by India, the United States, the Netherlands, and the UAE. Key imported goods include gas oil, petrol, bitumen-derived oils, raw sugar, and wheat. Chukwu advised the Nigerian government to diversify import sources, citing how Western countries are shifting their production bases from China to India and Vietnam to mitigate risks.
On the export side, India leads as Nigeria’s top destination, primarily buying crude oil and natural gas, which account for the overwhelming majority of the country’s exports. Agricultural and manufactured goods contribute minimally to export earnings. Chukwu noted that improved trade balance and intervention from the Central Bank have led to some naira appreciation. He also projected that crude oil prices would average $67 per barrel in the second half of 2025, with production expected to rise to 1.6 million barrels per day.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, offered a cautionary outlook, highlighting Nigeria’s weak fiscal performance and rising debt burden. He noted that actual revenue in 2024 fell nearly 50% below projections, with debt servicing costs nearing or exceeding 100% of revenue at times. This, he warned, poses a significant threat to the country’s macroeconomic stability.
The business environment is especially harsh on Small and Medium Enterprises (SMEs), according to Yinka Adelekan, Managing Director of Agusto & Co. She stressed that SMEs lack the shock-absorbing capacity of larger firms and are being squeezed by operational costs and limited pricing flexibility. Adelekan also urged investors to consider the political and economic ideologies of Nigerian leadership, noting that pro-market policies have historically fostered better economic outcomes than statist approaches.
Source: Punch