Unlocking Nigeria’s Production Potential Through China’s Tariff-Free African Trade Policy

Amid global shift towards protectionism, China, one of the world’s largest economies, recently announced its willingness to enact a new economic pact with Africa that will get rid of all tariffs on exports from 53 African countries — thereby boosting diplomatic ties between the Asian giant and its African counterparts while setting a new trajectory for global trade relations.

“China is ready to... welcome quality products from Africa to the Chinese market,” China’s foreign ministry, as reported by media, was said to have made this declaration following a meeting of senior Chinese officials with African foreign ministers. The meeting, held in Changsha, was aimed at reviewing the implementation of commitments made during a summit in Beijing in September 2024.

This is not the first time China has made a move to boost trade relations with Africa. The Forum on China-Africa Cooperation (FOCAC), for instance, operates on the principle of "win-win" cooperation and mutual benefit between the Chinese markets and African economies. Since its establishment in 2000, it has served as a platform for political dialogue and economic cooperation. Beyond this, it also serves as a mechanism for cultural exchange.

The bigger picture

China’s recent decision to eliminate tariffs on imports from all African countries, including Nigeria, offers a significant opportunity to unlock production potential. This policy shift, considered to be part of China's broader China-Africa Economic Partnership, is timely, as it is coming at a time Nigeria is facing threat of being axed out of the United States’ African Growth and Opportunity Act (AGOA), a preferential trade agreement that currently allows eligible nations to export goods to America duty-free. With a larger market access of over 1.4 billion population in China, Nigeria could boost non-oil exports, particularly in agriculture, textiles, solid minerals, and manufactured goods.

According to data published by the Foreign Trade Statistics, Nigeria imported goods worth N14.15 trillion from China in 2024, doubling the N6.6 trillion recorded in 2023, as the number continues to rise even in the first quarter of 2025.

In 2023, mineral fuels, oils, and distillation products were China’s largest imports from Nigeria, valued at $1.41 billion. This was followed by imports of ores, slag, and ash, which amounted to $399.09 million, and salt, sulphur, earth, stone, plaster, lime, and cement, valued at $305.91 million. Copper imports totalled $142.07 million, reflecting China's demand for industrial inputs.

Nigeria also exported a range of agricultural and animal products to China, including oil seeds ($50.73 million), raw hides and skins ($7.85 million), and coffee, tea, maté, and spices ($7.39 million).

Among the African countries trading with China, Nigeria stands out. This solidifies its position as a leading trading partner when it comes to trade relations with the Asian economy. The policy shift, if fully implemented, would allow Nigeria to export a wider range of goods to China without import duties, potentially boosting trade volumes and revenue. Many Nigerian traders can bank on this free pass to increase their export earnings. For instance, a small beauty store in Kaduna that ships to China can now have a lower price tag, which will enhance brisk purchases, especially if such items come at a higher cost from competing countries, as buyers tend to buy goods more from those with affordable prices.

In a similar vein, this duty-free policy by the Chinese government on imports from Nigeria will encourage diversification of exports beyond traditional exports like oil and gas. It will lead to a more resilient and robust economy. Other sectors that make up the whole gamut of the Nigerian economy will tap into the privilege to access international trade with their products, thus creating a diverse supply of goods. It has been projected that exports from Africa can increase from $170 billion to $250 billion yearly, with cumulative benefits exceeding more in the coming years if business remains sustainable.

Over the years, the manufacturing, automotive, and processing industries have been lagging on the international stage due to a number of factors. If this policy — which has a prospect of increased market access and reduced trade barriers — is implemented, it could attract foreign direct investments that may commit significant capital to fund production and transportation overseas in these sectors of the country’s economy.

In the first quarter of 2024 alone, the unemployment rate in Nigeria rose to 5.3 per cent, the National Bureau of Statistics said. This is because a larger part of the populace remains poor due to job scarcity. With this tariff-free access, increased exports and industrial activity can lead to job creation and help bring down the brain drain in Nigeria for many middle-class traders who are considering the option of migration.

Examining the bottlenecks

Despite the opportunities provided by this policy, most of the goods that are currently being exported to China are raw materials, and this will create a roadblock, especially within competing markets in Africa and other parts of the world that trade with China. In a bid to fully actualise its full potential under the policy shift, Nigeria needs to upgrade its capacity and ensure quality control to meet the standards demanded by Chinese consumers.

Also, the Nigerian government can capture this gap by supporting local businesses with funds and allowing them to thrive in a sustainable and industrialised environment where businesses can work in line with global demand. Thus, private-public partnerships have a greater role to play if the nation is set for its export growth.

China’s tariff-free policy for African nations is more than a trade deal — it’s a golden opportunity for Nigeria to rethink its production priorities, support local industries, and position itself as a key global supplier. The window is open, but the question is: will Nigeria walk through it with intent?

Rahaman Abiola is the Editor-in-Chief of LegitNG and a 2025 fellow of the Ominira Initiative.

Source: Legit.ng