As the global Trade landscape continues to shift, Nigeria finds itself navigating a precarious path shaped by tensions between economic giants. The ongoing trade war between China and the United States—two of Nigeria’s leading trading partners—poses significant risks to the country’s economic stability. This concern was prominently featured in the Nigeria Economic Summit Group’s (NESG) latest Foreign Trade Alert: 2024 Q4 & Full Year 2024, which warns that Nigeria could be “adversely” impacted if it fails to hedge against rising global shifts.
The NESG report highlights that while Nigeria’s external trade position improved significantly in 2024, the country’s reliance on foreign partners, especially for imports, leaves it exposed to the shocks and ripple effects of global shocks. In the fourth quarter of 2024, China maintained its position as Nigeria’s top trading partner, followed by India, Belgium, the United States, and France. However, this strong trade relationship with major economies now poses a strategic risk. In early 2025, the United States took a more aggressive stance in its trade war with China, imposing a 10 percent tariff on Chinese imports in February, with plans to add another 10 percent by April.
Foreign exchange inflow and imports could be impacted.
In a retaliating move, China swiftly announced additional Tariffs of 10 to 15 percent on certain U.S. goods starting March 10, 2025, along with new Export restrictions targeting U.S. entities. NESG warns that these actions, if they persist or worsen, could destabilize global supply chains, reduce International Trade growth, and drive up the prices of essential commodities globally. This development is particularly troubling for Nigeria due to its heavy dependence on imported manufactured goods and intermediate products—items that are crucial for sustaining industries, especially in the non-oil sector.
Disruptions in supply and increases in global prices due to tariff-induced shifts could result in higher production costs and supply shortages. On the export front, the challenges are equally daunting. Nigeria relies heavily on crude oil exports for foreign exchange earnings. However, if the United States ramps up its domestic shale oil production as planned, global oil prices could decline. This would significantly affect Nigeria’s oil revenue, limiting the inflow of foreign exchange and weakening the country’s trade balance.
NESG suggests new trade ties and local production boost.
Though oil exports did witnessed an uptick in 2024 due to a depreciating naira, Nigeria’s low crude oil production meant it could not fully benefit from high international oil prices. This exposes a fundamental vulnerability in relying too heavily on a single export commodity. To address these global shifts, NESG recommends a strategic shift in Nigeria’s trade approach. One key suggestion is to explore new trade relationships with countries not directly involved in the U.S.-China trade war.
Doing so would enable the country to avoid the fallout from escalating tariffs and stabilize the costs of imported goods—especially those critical to the country’s Manufacturing sector. In tandem, the report emphasizes the urgent need to develop robust domestic value chains. Nigeria’s dependence on raw material imports remains stark—₦2.1 trillion worth of imports compared to just ₦0.7 trillion in exports in Q4 2024 alone. Strengthening local raw material production, the NESG noted that, will reduce external vulnerability, boost industrial self-sufficiency, and drive inclusive growth.
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Furthermore, NESG highlights the importance of diversifying Nigeria’s export base. While oil continues to dominate, the group argues that expanding non-oil exports—such as agricultural products, solid minerals, and manufactured goods—would help the country earn more stable foreign exchange and insulate itself from the boom-and-bust cycles of oil dependence. Prioritizing non-oil commodities could help diversify Nigeria’s export Revenue and shield the Economy from external shocks, especially those driven by geopolitics and trade wars beyond its control. The NESG’s alert is both a recognition of Nigeria’s trade progress in 2024 and a timely warning of the global headwinds that could undo those gains.