‘Why trade deficit may persist despite China’s zero-tariff declaration offer’

Photo: Asia Times

China said it would kick off the implementation of zero-tariff treatment for imports from 53 African countries with which it maintains diplomatic relations, including Nigeria, from May 1.
 
This move, the Asian country said, would broaden Beijing’s preferential trade regime across the continent, even as it has remained Nigeria and the rest of Africa’s largest trade partner in the last decade.
  
Structural trade imbalances between China and African economies are widening each year.
 
This move comes right on the heels of the uncertainty over the renewal of the United States’ African Growth and Opportunity Act (AGOA), which was eventually renewed earlier this month for just one year as opposed to the proposed three years, and continued trade tensions between African nations and the European Union over Economic Partnership Agreements (EPA).
 
Until now, duty-free access had applied only to selected African countries. Beijing had granted zero-tariff treatment on 97 to 98 per cent of tariff lines for 33 African least developed countries (LDCs), before expanding that coverage in 2024 to include all products originating from African LDCs.
 
The new measure broadens the regime to nearly the entire continent, extending duty-free access to all African countries except Eswatini, which maintains diplomatic ties with Taiwan.
 
Trade between China and Africa has grown rapidly in the last decade, but remains heavily skewed. Bilateral trade reached $222.05 billion between January and August 2025, up 15.4 per cent year-on-year, according to China’s General Administration of Customs.
 
Chinese exports to Africa surged 24.7 per cent to $140.79 billion, while imports from the whole of Africa stood at $81.25 billion in the same period.

Africa’s trade deficit with China widened to $59.55 billion in the first eight months of 2025, nearly matching the full-year 2024 deficit of $61.93 billion.
  
Bilateral trade between Nigeria and China stood at $22.3 billion between January and October, representing a 30.2 per cent year-on-year increase and surpassing 2024’s total, heavily in China’s favour.
 
The imbalance reflects Nigeria and the rest of Africa’s reliance on raw materials such as crude oil, copper, cobalt and iron ore, while importing higher value-added manufactured goods from China.
 
Mineral resources accounted for roughly 40 per cent of China’s imports from Africa in 2023, followed by non-edible raw materials and semi-processed goods.
 
Chinese exports have included machinery, electronics and renewable energy equipment. Africa imported 15,032 megawatts of Chinese solar panels between July 2024 and June 2025, up 60 per cent from the previous 12 months.
  
While China says the zero-tariff regime is designed to boost African exports and rebalance trade flows, economists have argued that this would strengthen the country’s economic diplomacy and soft power on the continent.
  
Beijing has also pledged additional trade facilitation measures, including dedicated funds and financial products to support enterprises operating in Africa.
 
Despite the tariff removal, analysts caution that structural barriers remain. Non-tariff barriers, including regulatory standards, logistics constraints and financing gaps, continue to limit African exporters’ ability to penetrate the Chinese market.
 
Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said nothing much was going to change for Nigeria as the country’s exports, especially non-oil, remain extremely weak.
 
Yusuf said that as it stands, Nigeria could not export manufactured products to China, stressing that the agreement between the two would continue to be skewed against Nigeria.
 
“What do you want to take there that doesn’t already exist? Is it automobiles, computers or what exactly? They know what they are doing with this proposal because there is literally nothing, except the raw materials, which we already export, that they can buy from us.
 
“However, it is a new opportunity, but personally, I do not see any significant impact that this will have on our current export structure and our challenge of export competitiveness that we struggle with. Even if we have manufactured products that we hope to take there, can we compete in terms of pricing at the cost of producing anything?
 
“AGOA ran for 25 years and we had nothing to show for it aside from oil and gas exports and it is not like we have a market challenge for that sector. Oil and gas by its very nature, is not prone to trade restrictions globally. Even with all of Donald Trump’s bans and tariff impositions, he never touched energy products; he exempted them. That tells you what you need to know,” he said.

He again noted that while it might be a good opportunity, he doubted it would move the trade deficit needle towards Nigeria.
 
He declared that Nigeria lacked the capacity to take advantage, just as it did not demonstrate any capacity to take advantage of AGOA in its two decades.
 
He opined that for Nigeria to take advantage of any agreement, it must build capacity, concentrate on its competitive strength, stressing that international trade was mostly about competitiveness and not about trying to export any produce.
 
“You must be able to produce it in significant numbers and, most importantly, be competitive in quality and price. The export tariff may have been removed, but narrowing the trade gap will depend on whether we can diversify exports beyond primary commodities and build competitive manufacturing capacity,” he added.

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