The declining economic growth in China is expected to have repercussions on Nigeria’s economic prospects, according to the International Monetary Fund (IMF).

The IMF highlighted that China’s deep economic connections with sub-Saharan African countries, particularly over the past two decades, might result in an average 0.5 percentage point reduction in Nigeria’s growth due to China’s recent slowdown.

China stands as the region’s largest trading partner, purchasing a significant portion of exports, including metals, minerals, and fuel, while also supplying a majority of manufactured goods and machinery.

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Although China’s recovery from the pandemic has slowed, the IMF emphasized the potential impact on Africa’s growth, with a one percentage point decline in China’s growth rate potentially reducing the region’s average growth by about 0.25 percentage points.

For oil-exporting nations like Angola and Nigeria, the potential loss could be 0.5 percentage points on average.

The IMF urged sub-Saharan African countries to adapt to China’s economic slowdown by enhancing inter-African trade, fortifying buffers, implementing tax policy reforms, and improving revenue administration.

Diversification of African economies and efforts to build resilience were also emphasized as crucial for sustained growth.

The IMF also noted that China’s declining economic engagement might affect sovereign lending to sub-Saharan Africa, signaling a shift away from significant infrastructure financing.

The sub-Saharan countries are encouraged to create favorable business environments, invest in infrastructure, and deepen domestic financial markets to enhance competitiveness.

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Recently, the Consul General of China in Lagos reported a bilateral trade volume of $17.25 billion between China and Nigeria in the first three quarters of 2023.

China remains a vital trade partner for Nigeria, with total borrowing from China reaching $4.29 billion by the end of December 2022, according to the Debt Management Office.