Nigeria’s heavy dependence on China for imports has raised renewed concerns among economists and trade experts, who caution that the country’s import pattern poses significant risks.
Speaking at the Cowry Quarterly Economic Discourse held on Wednesday under the theme ‘Thriving in a Volatile Economic Environment’, Group Managing Director of Cowry Asset Management, Johnson Chukwu, highlighted the issue.
The Q1 Foreign Trade in Goods Statistics released by the National Bureau of Statistics confirmed that China remains Nigeria’s top source of imports, followed by India, the United States, the Netherlands, and the United Arab Emirates. Key commodities imported during the period included gas oil, petrol (ordinary motor spirit), petroleum oils from bituminous minerals, crude cane sugar for refineries, and non-seed durum wheat.
Commenting on the data, Johnson Chukwu noted that Nigeria’s heavy reliance on Chinese imports poses a serious risk.
He warned that any disruption in China’s supply chains—such as those experienced during the COVID-19 pandemic—could spark renewed inflation and economic instability in Nigeria.
Chukwu said, “You will observe that China has become so important to this country, and I hope the government finds ways to deal with this because, for me, it’s becoming a threat. So, if there is a shutdown or supply chain disruption in China today, we’re going to have a major inflationary impact on the country.
So, the government needs to consider that. I know Western countries are already doing a lot of things to diversify their productivity base from China, and they are moving to India and to Vietnam to make sure that after the COVID lockdown, what happened will not happen again.
“Interestingly, in terms of export, you can see India as our largest export partner, followed by the Netherlands. Of course, what we sell to these countries are largely crude and mineral-related items, and then you have the refined natural gas and other gas commodities, which account for 95 and 85 per cent of total exports. So, you can see the other contributors, our exports: vegetable products, about two per cent, and you have spirit tobacco, which is exported to West African
countries, largely about seven per cent. Then our import of petroleum products is about 33 per cent of our total imports. That’s moderated slightly after Dangote started producing. The implication of improvement in balance of trade as well as the Central Bank’s active involvement in the sale of money market instruments has led to some appreciation of local currency.”
Chukwu projected crude oil prices to average around $67 per barrel in the second half of the year. This forecast is based on OPEC’s decision to boost crude production by approximately 548,000 barrels per day, amid a global slowdown influenced by former U.S. President Donald Trump’s tariff-driven policies aimed at curbing economic activity.
“So, if you have a shrinkage in demand and at the same time, you are having an increase in supply, you are certainly going to see a moderation in crude prices. For the second half of 2025, crude price will average $67; of course, you could see some fluctuations. We think Nigeria’s crude oil production will increase to about 1.6 million barrels per day, and that will allow for the fluctuations that you may experience. With the acquisition of Mobil by Seplat and the Renaissance acquisition of Shell assets, we expect that they will reopen some of the shut-in wells.
“We expect the GDP to average 3.7 per cent this year and for inflation to moderate further by approximately 20-22 per cent. Why? We think exchange rate stability will subsist, and food production will only be the leg that we will need to deal with as we move out of the harvest season. We think the average exchange rate in the second half of the year will be in the region of 1525/$ as the Central Bank has been actively participating in the market and in the equities market. We think the returns will be in the range of 30 per cent this year, and we have already done 22 per cent,” he said on the outlook.
