Presently, it is evident that the COVID-19 outbreak has brought about negative impacts on the Chinese economy. It is also of no news that China is considered one of Nigeria’s important trading and export partners and Nigeria is considered the most pro-Chinese nation in the world. What then is to be expected of COVID-19’s effect on the Nigerian’s economy?
Nigeria and China happen to be close allies in bilateral trade and it is only normal that a reduction in goods and services in China will cause a reduction in commodity sales with a price hike in Nigeria.
The International Centre for Investigative Reporting (ICIR) has given a list of the major sectors that are likely to get affected during the viral outbreak:
Impact on oil price in Nigeria
Due to a fall in global oil demand in the bid to contain the viral spread, there is bound to be a fall in the revenue being generated from oil exports, which in turn can lead to inflation in the country.
Impact on trade between China and Nigeria
Due to the lockdown of workers and companies in China, there has been a reduction in exports. This has affected Nigeria’s import trade which depends a lot on Chinese exports.
Impact on Foreign Exchange
The fall in oil prices as the demand reduces tends to make foreign exchange insufficient to fund imports.
Impact on Foreign Borrowing
Due to the reduced production of goods and the negative impacts of COVID-19 on the Chinese economy, it is unlikely that the Nigerian government will be getting the requested loan when needed.
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