Nigeria set to benefit from China’s 'self-reliance' policy

Nigeria-China bilateral trade is set to benefit from the latest move by the Asian country to focus its energy inward as a way to secure economic growth, this is the opinion of experts. A move that it regards as distancing its GDP growth from Western over-reliance. This economic policy of self-reliance, the second largest economy, referred to as “Dual Circulation Economics (DCE).”

Beijing referred to DCE as a realignment of the country’s GDP from export dependency to domestic consumption. It is a proactive response to recent geopolitical tension between Xi Jinping’s administration and Joe Biden-US led government—a relationship that has been made worse by Nancy Pelosi’s visit to Taiwan, the restriction of chip exports to Chinese companies, and China’s alignment with Russia in its aggression on Ukraine.

In a recent report titled “China’s Inward Turn: The Pursuit of Economic Self-Reliance,” Citi Group argued that China’s decision to focus more of its energies on domestic consumption as a means to grow GDP became more of a possibility following the way the country endued the devastation of the Global Financial Crisis of 2008 and how it recovered from it.

As geopolitical tensions between the US grew, it appeared that the country’s international circulation policy, which emphasised exports to the West, was putting too much strain on the world’s second-largest economy’s economic future.

As a consequence, China has decided to focus on three major areas to boost its GDP. They are technology, agriculture, and energy. For technology, Beijing had proposed that Chinese companies develop their software manufacturing capacity so as to reduce their dependency on companies based in the U.S. or Taiwan.

However, the area in which Nigeria should make conscientious effort to maximize should be agriculture and energy, experts contacted said. An investigation carried out by Citi Group discovered that China had identified feedstock shortages rather than staple food shortages as its main challenge when it came to agriculture produce. The report revealed that most of the feedstock focus was on soybeans, of which Nigeria is among the top three producers in Africa.

According to data from the World Economic Database, net grain imports of soybeans into China grew from a 20 percent share in 1997 to 80 percent in 2019. And with this self-reliance policy move by Beijing, there is a great chance that demand in China will get even higher.

Why? Nigeria is the second-largest producer of soybeans in Africa, with nearly 25 million bushels produced between 2015 and 2017, according to USAID.

Our weather condition and recent government policies to help increase production of cash crops make soybeans the next big revelation for 2023, Stanley Nwani, a senior economics lecturer at the Lagos Business School, said when describing how important it is for Nigeria to focus its energies on increasing its soybean production for the China market.

“Nigeria already has a wonderful trade relationship with China and can get even better if policymakers can commit resources to ensuring both government and private sector involvement in the production of soybeans,” Stanley Nwani said.

“With Xi Jinping planning to fully introduce his self-reliance policy in 2023, policymakers in Nigeria are advised to quickly put in place the right policies to ensure an all-year supply of soybeans to China,” Nwani continued—a decision that would require not only the right policies but adequate infrastructure and security to guarantee all-year production of soybeans so that it can increase its share of foreign exchange earnings.