On Thursday, the International Monetary Fund’s (IMF) Regional Economic Outlook indicated a potential impact on Nigeria’s economy due to China’s economic slowdown. The report highlighted that a one-point drop in China’s growth could shrink Nigeria’s growth by 0.5% within a year. This connection is primarily due to China being Africa’s top import partner.
The global economic slowdown and China’s manufacturing sector decline have hindered its recovery from the pandemic. As a result, Nigeria’s real GDP reported a 2.51% growth rate in Q2 2023, down from 3.54% in Q2 2022.
Data from the Nigerian Bureau of Statistics (NBS), covering the period from June to September 2023, identifies China as Nigeria’s top import partner. Chinese imports accounted for 22.17% of total imports or N1.27 trillion worth of goods.
During the same period, Nigeria’s debt to China increased by $800 million to $4.73 billion, marking a 20.36% increase according to data from the Debt Management Office (DMO). This debt funded 15 infrastructure projects as outlined in the ‘Status of Chinese loans as of September 30, 2021’ document.
Historically, the slowing Chinese economy has resulted in a decrease in its lending to Sub-Saharan African countries to under $1 billion last year, reaching its lowest level in nearly two decades. Despite this trend, China continues to be the largest bilateral official lender in the region with its share of total sub-Saharan African external public debt rising from less than 2% before 2005 to 17% by 2021.
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