By Ephraim Agbo
Nigeria’s foreign-economic diplomacy has entered a new, accelerated phase. In the space of months, Abuja has signed, renewed, or operationalized a clutch of agreements — some long-planned, others newly conceived — that together signal a deliberate re-orientation toward the Global South and deepening strategic ties with China and Russia.
Those moves matter because, even though Nigeria is no longer Africa’s largest economy by nominal GDP — having slipped behind South Africa and Egypt due to currency depreciation — it remains the continent’s most populous nation and, by purchasing-power parity (PPP), one of its three largest economies. That combination of demographic weight and latent economic capacity still gives Nigeria enormous geopolitical leverage in Africa’s future balance of power.
BRICS Partner Status — Signalling a Shift in Alignment
In January 2025, Nigeria accepted an invitation to become a BRICS Partner Country — not a full member yet, but a participant with privileges in economic and strategic cooperation. It joins a growing list of Global South nations seeking alternatives to Western-dominated financial and trade systems.
For Abuja, the calculation is strategic: diversify diplomatic partners, access new financing, and gain influence in institutions such as the New Development Bank (NDB). For BRICS, Nigeria’s inclusion offers legitimacy — Africa’s biggest democracy and a symbolic gateway to the continent’s 1.4 billion consumers.
Implication: Partner status gives Nigeria a low-cost hedge against Western dominance while signalling to investors that it is committed to multipolar engagement. Yet, this pivot risks friction with Washington and European allies wary of BRICS’ growing influence in Africa.
Currency Swaps and the De-dollarisation Play
In December 2024, China and Nigeria renewed their 15 billion yuan ($2 billion) currency-swap deal. The agreement aims to allow businesses in both countries to settle trade directly in yuan and naira — reducing exposure to the U.S. dollar and insulating transactions from dollar scarcity.
For a country struggling with foreign exchange volatility, the swap provides breathing room for trade and potentially stabilizes the naira during import surges. But it also deepens Nigeria’s financial interdependence with China, subtly shifting the axis of Nigeria’s monetary diplomacy eastward.
Implication: The currency swap may ease short-term liquidity crises and stimulate trade, but it also signals a quiet participation in the broader BRICS-led de-dollarisation project, which could eventually challenge U.S. economic leverage in the region.
Lithium, China, and the Fight for Critical Minerals
In 2022, Nigeria’s Mines Minister rejected a proposal from Tesla to purchase raw lithium for export, insisting that any partner must build processing plants locally. That stance — a bold assertion of resource sovereignty — led to a wave of Chinese investments in lithium processing facilities, especially in Kaduna and Nasarawa States.
Chinese firms such as Ming Xin Mineral Separation, Canmax, and Jiuling have pledged over $1.3 billion to establish battery-grade lithium plants in Nigeria. These deals are not traditional mining contracts — they represent an attempt to capture more value from the global electric-vehicle supply chain.
Implication: Nigeria’s insistence on local processing is a sound industrial policy. However, it has given China a first-mover advantage in Nigeria’s emerging green economy — a development Western powers are watching with unease as they scramble to secure alternative sources of critical minerals.
Dangote Refinery and Energy Independence — A Game-Changer with Limits
The Dangote Refinery, Africa’s largest at 650,000 barrels per day, has begun operations since January 2024, dramatically reducing Nigeria’s reliance on imported refined petroleum. The project, worth over $19 billion, is already reshaping West Africa’s energy map.
However, claims that Nigeria has completely stopped fuel imports from the U.S. widely spread on social media are misleading. The refinery still imports U.S. crude oil for processing, and market logistics mean some refined imports continue in smaller volumes.
Implication: The refinery strengthens Nigeria’s energy independence and could eventually turn the country into a regional fuel exporter. But it does not mark a total decoupling from U.S. trade — rather, it rebalances it.
Nuclear Cooperation with Russia — A Long Bet on Energy Security
Nigeria’s nuclear cooperation agreement with Russia’s state energy corporation Rosatom, signed in 2017, remains in force. It covers the construction of a research reactor and a future nuclear power plant. In recent months, discussions have resurfaced over small modular reactors (SMRs) as a potential solution to Nigeria’s chronic power shortages.
Implication: The nuclear route could offer stable, low-carbon power for industrial use. But it also locks Nigeria into decades-long financial and technical dependence on Russia, with implications for foreign policy neutrality and regulatory oversight.
Other Emerging Agreements — Quiet but Strategic
Beyond the headline deals, several lesser-known agreements are reshaping Nigeria’s geopolitical portfolio:
- Railway and Infrastructure Partnerships: China Civil Engineering Construction Corporation (CCECC) continues to dominate major infrastructure projects, from the Lagos–Kano railway to the Abuja Metro.
- Defence Cooperation: Nigeria has expanded military procurement from Turkey, China, and Russia, diversifying away from Western suppliers.
- Digital Sovereignty: Talks with Huawei and ZTE for national broadband expansion illustrate how China’s digital infrastructure diplomacy is embedding itself in Nigeria’s communications backbone.
- Agricultural Partnerships: Nigeria and India are finalizing hybrid rice and fertilizer collaborations that could impact West African food security dynamics.
The Economic Backdrop: Nigeria’s Lost Crown, Enduring Weight
As of 2025, South Africa and Egypt have overtaken Nigeria in nominal GDP, largely due to the naira’s depreciation following foreign exchange liberalization.
However, by purchasing-power parity (PPP), Nigeria still ranks among Africa’s top three economies, reflecting the size of its domestic market, services sector, and demographic momentum.
The rebasing of GDP in 2024 revealed a more diversified economy — with significant growth in fintech, creative industries, and logistics — but the weak naira dampened those gains in dollar terms.
Implication: Nigeria’s power now lies less in headline GDP figures and more in its market scale, resource endowment, and regional influence — assets that still make it indispensable in continental diplomacy.
The Bigger Picture — Nigeria’s Pragmatic Realignment
Nigeria’s current trajectory is pragmatic, not ideological. The Tinubu administration is leveraging global competition to secure better financing terms, industrial know-how, and strategic autonomy.
But the balancing act is delicate. As Nigeria deepens ties with China and Russia, Western allies may recalibrate their engagement — possibly tightening conditionality on aid or trade. For Abuja, the challenge is to maximize strategic flexibility without alienating partners on either side of the emerging geopolitical divide.
What This Means
- Economically, Nigeria is building leverage through diversification — but must guard against debt and opaque contracts.
- Politically, it seeks a voice in shaping post-Western global institutions while avoiding isolation from Western capital markets.
- Regionally, Nigeria’s choices will ripple across ECOWAS, where smaller economies often align with its trade and monetary policies.
If executed wisely, this strategy could position Nigeria not just as a bridge between worlds, but as a rule-maker in the next phase of African economic sovereignty.
Final Word
Nigeria may no longer wear the crown as Africa’s largest economy in nominal terms, but it remains the continent’s most strategically consequential. Its choices — from BRICS participation to lithium processing and currency swaps — will determine not just its own trajectory, but the balance of influence across Africa’s resource and trade corridors.
What’s emerging is not an eastward drift, but a recalibration — a quiet assertion of independence in a world no longer ruled by one financial order.
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