Nigeria and China: A Partnership That Needs Rethinking

By Alfred Ajayi

For over two decades, the narrative surrounding Sino-Nigerian economic relations has been framed in the soft language of global solidarity—a “win-win” bilateral partnership between the world’s most populous Black nation and Asia’s economic titan. From the sprawling Lagos-Ibadan railway to the Lekki Deep Sea Port, developed by Tolaram, China Harbour Engineering Company, the Lagos State Government, and the Nigerian Ports Authority (NPA), as well as airport terminals in Abuja and Kano, Beijing’s footprint in Nigeria is unmistakable. Yet, beyond the ribbon-cutting ceremonies and celebratory rhetoric, a closer examination of the trade ledgers reveals a far less balanced reality.
This is not a partnership of strategic equals but a classic asymmetrical trade relationship. While China secures critical raw materials and a captive export market, Nigeria trades long-term fiscal space, industrial competitiveness, and policy flexibility in exchange for much-needed infrastructure.
At its core, the relationship between Abuja and Beijing follows the classic commodity-for-manufactures trade model. Nigeria functions primarily as a supplier of raw materials for China’s industrial expansion. Its exports consist largely of unprocessed commodities, including crude oil and petroleum gas, valued at approximately $2.2 billion in 2024.
Nigeria also exports solid minerals such as lithium, columbite, tantalite, tin, lead, and zinc in their raw form, forfeiting the opportunity to add value domestically before export. Similarly, agricultural exports—including sesame seeds, cashew nuts, and cocoa—leave the country with minimal processing.
In return, China provides what Nigeria’s underfunded public finances have struggled to deliver. These include critical infrastructure projects such as railways, power facilities like the Zungeru Hydroelectric Power Project, and modern seaports, largely financed through concessional loans from the Export-Import Bank of China.
China also supplies affordable consumer electronics, textiles, batteries, solar equipment, machinery, and other manufactured goods that sustain Nigeria’s vast informal economy.
Economists and trade experts have long lamented the unequal nature of economic relations between the two countries. Of the total bilateral trade recorded in 2024, approximately 89.5 per cent represented goods flowing from China into Nigeria, while Nigeria’s exports accounted for only 10.5 per cent.
Put differently, for every $1.00 worth of goods Nigeria exports to China, China exports approximately $8.50 worth of goods to Nigeria.
While China exports high-value industrial products—including more than $2.1 billion worth of electronics, over $1.3 billion in heavy machinery, and approximately $800 million in motor vehicles—Nigeria’s total exports to China amount to just $2.37 billion and consist overwhelmingly of crude oil, petroleum gas, and mineral ores.
According to the National Bureau of Statistics (NBS), nearly 30 per cent of all goods imported into Nigeria between January and March 2025—roughly three out of every ten imported products—originated from China.
China’s enormous trade surplus with Nigeria—estimated at nearly $18 billion in 2023—continues to exert pressure on Nigeria’s foreign exchange market, as Nigerian businesses must constantly source U.S. dollars to finance imports from China.
Meanwhile, Nigerian markets remain flooded with low-cost Chinese manufactured goods, while local manufacturers struggle with chronic power shortages, high production costs, and structural inflation that make effective competition almost impossible. This persistent imbalance continues to undermine manufacturing clusters in Lagos, Kano, Aba, and other industrial centres.
The Dependency Theory of International Relations offers one of the most compelling explanations for this imbalance. Pioneered by scholars such as Raúl Prebisch and later expanded by Immanuel Wallerstein, the theory argues that the global economic system is structured to keep developing nations—the “Periphery”—economically dependent on wealthier industrialized nations—the “Core.”
Within this framework, China functions as the industrial Core, while Nigeria operates as the commodity-supplying Periphery. Nigeria exports low-value raw materials only to import high-value manufactured products derived from those same resources. The resulting terms of trade naturally favour the Core, trapping countries like Nigeria in a cycle of structural underdevelopment, industrial stagnation, and recurring balance-of-payments deficits.
From the perspective of Structural Realism (Neorealism), as articulated by Kenneth Waltz, international relations are shaped by the distribution of power within an anarchic global system, where states pursue their national interests above all else.
Viewed through this lens, China’s engagement with Nigeria under the Belt and Road Initiative (BRI) is not an act of altruistic development assistance but a strategic effort to secure access to raw materials, create new markets for surplus industrial production, and expand geopolitical influence across Africa. Nigeria, lacking a coherent long-term economic strategy, negotiates from a position of structural vulnerability.
In the final analysis, available trade and investment data indicate that China derives significantly greater economic benefits from the relationship—a dynamic that can best be described as China’s strategic gains versus Nigeria’s conditional gains. China secures resource access, profitable markets for its state-owned enterprises, interest income on infrastructure loans, and increased political influence. Nigeria, on the other hand, receives much-needed infrastructure but pays for it through rising external debt obligations, declining manufacturing competitiveness, job losses, and a widening trade deficit.
Nigeria’s underperformance in its economic relationship with China should not be attributed primarily to Beijing. Rather, it reflects domestic policy failures, weak negotiating capacity, and institutional inertia. While China approaches Africa with carefully coordinated long-term strategic plans spanning decades, Nigeria continues to engage China reactively, largely on a project-by-project basis.
Nigeria has continued to export crude oil, raw lithium, and other solid minerals without consistently enforcing local value-addition policies. The country would do well to emulate Indonesia, which prohibited the export of raw nickel, compelling foreign investors to establish domestic smelters and processing facilities. What is lacking in Nigeria is not opportunity but political will.
Equally problematic are the weak technology-transfer provisions embedded in many infrastructure agreements. In numerous cases, contracts lack enforceable clauses requiring meaningful knowledge transfer, leaving specialized technical roles heavily dependent on imported foreign personnel.
Another major challenge lies in Nigeria’s domestic production constraints. High energy costs, inefficient port logistics, inadequate transport infrastructure, policy inconsistency, and macroeconomic volatility continue to undermine the competitiveness of Nigerian industries, preventing local firms from taking full advantage of opportunities in the Chinese market.
There are, however, important positives. Chinese investments in manufacturing, telecommunications, mining, and special economic zones have generated employment and contributed to some transfer of industrial capacity. Companies such as Huawei, ZTE, and several Chinese automobile assemblers have established operations in Nigeria.
Although these investments demonstrate that the bilateral relationship extends beyond trade alone, their overall scale remains relatively modest when compared with the enormous volume of manufactured imports entering Nigeria. Consequently, they have been insufficient to offset the country’s widening trade imbalance.
The bilateral economic relationship does not have to remain so one-sided. If Nigeria intends to reset its engagement with Beijing, it must move beyond being a passive recipient of loans and become an assertive strategic partner.
First, the government should enforce robust local-content and value-addition policies by requiring that raw materials—including lithium, crude oil, and agricultural commodities—undergo significant domestic processing before export.
Second, Nigeria should require Chinese manufacturers seeking access to its vast consumer market to establish local manufacturing and assembly plants through joint ventures with Nigerian firms. Such a policy would accelerate industrialization, deepen technology transfer, and generate sustainable employment.
Third, Nigeria must insist on genuine technology transfer. Infrastructure contracts should include legally enforceable provisions requiring structured training programmes, local engineering participation, knowledge-sharing mechanisms, and the gradual localisation of technical expertise.
Until Abuja approaches Beijing with clearly defined national priorities, a coherent long-term industrial strategy, and firm negotiating positions anchored in national economic interests, the relationship will continue to deliver disproportionate gains to the Chinese dragon while leaving the Nigerian elephant with little more than the crumbs.