As a BRICS partner member, Nigeria gets to participate in trade and investment, food security, and other benefits with other emerging economies, but the majority of its foreign-traded goods are usually deemed non-competitive, which is detrimental to the prospects, ARINZE NWAFOR writes
Nigeria joined the BRICS as a partner member on January 17, 2025, and stakeholders in the real sector have received the news fairly positively.
Some stakeholders have described the benefits of increased investments, bilateral and multilateral trade, diplomatic influence, and asserting sovereignty as net positives for joining the economic and political bloc. They have also recognised that Nigeria is handicapped in foreign trade relations, especially regarding the competitiveness of local goods.
The BRICS decision has put Nigeria on a platform to engage more actively with founding states, Brazil, Russia, India, China, and later on, South Africa, which a Council on Foreign Relations publication described as “an informal grouping of emerging economies hoping to increase their sway in the global order.”
What BRICS is
BRICS was established in 2009 and has assumed a stance generally interpreted as challenging the dominance of Western-led global economic institutions despite being an informal organisation or coalition of countries.
In 2024, BRICS expanded to 10 member countries, including Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
By 2025, it had added nine partner countries, namely, Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, Uzbekistan, and Nigeria, rapidly increasing its reach. The international group accounts for over half of the global population and nearly a quarter of the world’s Gross Domestic Product.
Before Brazil announced it had admitted Nigeria (with a GDP of N71.13tn as of Q3 2024) as a BRICS partner, the country had forged economic ties with BRICS countries over the years in areas such as energy, technology, and trade.
Nigeria’s largest trading partner is China, with annual trade volumes exceeding $25bn. However, imports from China mostly define this trade relationship. Whereas Nigeria sources machinery, electronics, and other manufactured goods from China, the Asian country imports crude oil and other raw materials from Nigeria.
Similarly, India, the largest importer of Nigerian crude oil, has annual trade volumes with Nigeria exceeding $14bn. Trade with Brazil stands at approximately $12bn, with agricultural products, minerals, and oil forming the bulk of transactions. Russia’s trade engagement with Nigeria focuses on wheat imports and defence-related equipment, with annual trade valued at around $2bn.
South Africa is the closest ally to Nigeria within the BRICS, and its trade volume is over $3bn, characterised by a mix of consumer goods, telecommunications investments, and energy resources.
Nigeria’s trade balance with most BRICS countries remains negative despite these significant trade flows, highlighting the structural inefficiencies in its export capacity and the overreliance on crude oil.
This imbalance underscores the need for a more diversified Nigerian economy to address bottlenecks and maximise the benefits of its BRICS partnership.
How BRICS partnership benefits Nigeria
Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, viewed Nigeria’s BRICS partnership as a strategic move with substantial benefits.
“The decision to join BRICS, even as a partner country, offers immense opportunities for bilateral and multilateral trade, investment relations, and access to infrastructure funding,” Yusuf noted.
He emphasised that the bloc provides Nigeria with a platform to enhance its diplomatic influence while aligning with the global trend of reducing Western dominance in financial and economic affairs.
“There’s also a general tendency that we seem to be now aligning with, and that is to reduce the western dominance in the global financial affairs and the global economic order,” he explained. “That is also important so that if you have strong countries making up BRICS, at least they’ll be able to provide a kind of balance when you compare their economies and their voices to that of the G7, for instance, or that of countries in the West. Because there’s a sense in which multipolarity is also good for balance and for the sovereignty of different countries.”
However, Yusuf acknowledged the perception risks associated with BRICS, particularly its emergence as an anti-Western bloc, but urged focus on Nigeria getting a good deal out of the arrangement.
“Nigeria must ensure it secures a good deal within BRICS in terms of financing and partnerships that align with its economic development goals,” he noted.
Yusuf also highlighted the potential for BRICS to support Nigeria’s security initiatives with fewer strings attached compared to Western funding sources, stressing, “Security is becoming a high-priority agenda for economic development, and there are opportunities in BRICS to support us in this direction and with fewer strings attached, unlike what you have in the West.
“As a sovereign country, we should be able to determine what is in our best interest when we are going through this kind of relationship in terms of the economy, trade, investment, and attraction of capital.”
Similarly, the former president of the Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, underscored the advantages of Nigeria’s association with BRICS, particularly in fostering economic integration and liberalising trade.
Ajibola submitted: “Any form of economic integration comes with some advantages, and they could be many and varied. It will include economic cooperation and some form of liberalised terms of trade when you are dealing with yourselves as members, which gives certain preferences to yourselves.
“If we belong together in one form of economic bloc or the other, it certainly brings some advantages to Nigeria’s economy in terms of more favourable terms of trade, exchange of some trade agreements, bilateral, multilateral, and even some other benefits in terms of infrastructure development, generous conditions of trade, and in other exchanges that take place among the trading partners.
“They exchange human capital, talk about technology, trading consulting, and things that can benefit member nations.”
Stakeholders mull possible global fallouts
According to Yusuf, Nigeria’s alignment with an economic bloc with a founding member such as China puts it in an unlikely position with the United States of America, which has long engaged in trade wars with China.
“The likely trade tension that will be created under the Trump presidency, particularly between the United States and China, and possibly the United States and the European Union, is a double-edged sword. It has merits and demerits, or upsides and downsides,” Yusuf noted. “The upside is that it may encourage more bilateral relationships between China and African countries, including Nigeria. It may also strengthen the bilateral relationship between European countries and Africa and Nigeria specifically, being a leading economy on the continent.
“The downside is possibly the impact on global trade generally because it’s likely to affect supply chains globally because the US is a major economy, and when the US, China, and the EU are having issues, definitely there’ll be quite some negative fallouts that may affect us as a country.”
Yusuf also projected that AGOA, which Nigeria is a beneficiary of and was due for renewal in 2025, may be caught in the crosshairs of surging global market tensions.
He said, “It’s also possible that given the current disposition of (President Donald) Trump, our African Growth and Opportunities Act, which was meant to liberalise exports to US markets, may be affected when it is time to renew. Because for Trump, it’s America first. Anything that will not directly benefit America, Trump is not likely to support.
“Those are the kinds of risks that (Nigeria) may face under Trump. And they are also likely to witness possible weakening of our currency, because Trump’s policy is really to strengthen the dollar. And if the dollar gets stronger, it may have a negative impact on our currency.”
Meanwhile, former CIBN president Ajibola highlighted the challenges in aligning with BRICS’ ambition to de-dollarise international trade, stating, “Most of our trade transactions and creditor arrangements are dollar-denominated, which complicates the adoption of alternative currencies like the yuan.”
While Nigeria has explored currency diversification, Ajibola observed that global financial institutions and trading partners’ reliance on the dollar limits such initiatives. “This is a significant setback,” he said, emphasising the need for a pragmatic approach to navigating these complexities.
Exported Nigerian goods struggle to compete
A national council member of the Manufacturers Association of Nigeria, John Aluya, presented a more cautious perspective on Nigeria’s BRICS partnership, identifying infrastructure deficits as the primary barrier to Nigeria’s competitiveness in international trade.
“The biggest challenge we have in manufacturing is that we are not strong enough to compete in international trade because we have infrastructure deficits,” Aluya lamented. “By the time we calculate the cost of our production, it becomes so expensive. That is why you find a lot of people go for imported items.”
He cited unreliable electricity, poor roads, and limited access to water as critical issues, stating, “(Manufacturers) are constrained by the challenges of the high cost of production created by the deficit of infrastructure because you provide your light (electricity), roads, and water. These are the things manufacturers all over the world take for granted.”
He argued that local manufacturers end up being less competitive globally after investing in these infrastructure necessities, unlike their counterparts in other countries.
Aluya expressed scepticism about Nigeria’s current status within BRICS, describing it as more of an observer than an active participant.
“About joining the BRICS, Nigeria has not been admitted as a member. We are just a partner, and maybe we are there as an observer. I don’t see any advantage or what we are gaining by just being a partner,” he said, stressing that Nigeria must address its domestic challenges before fully benefiting from such alliances.
The manufacturing leader also criticised the country’s over-reliance on crude oil exports, which remain Nigeria’s only competitive product in international markets.
He said, “The only product we have that is competitive in the international market today is oil. Outside that, you cannot produce anything and compare it with any other country in the world because most of the inputs you are going to use, you still have to import them.
“We need to diversify our economy and enhance the competitiveness of other sectors, particularly manufacturing.”
On the issue of de-dollarisation, Aluya echoed Ajibola’s concerns about the dominance of the U.S. dollar in global trade, stating, “The dollar’s position is deeply entrenched, and altering this dynamic will require significant structural changes.”
He also noted that high import taxes and the reliance on imported inputs further exacerbate Nigeria’s trade imbalance.
Nigerian exports become more competitive with better infrastructure
While Nigeria’s partnership with BRICS holds promise, its ability to capitalise on this opportunity hinges on addressing fundamental challenges.
The stakeholders agreed that infrastructural development is paramount. Investments in power generation, transportation networks, and water supply systems would reduce production costs and enhance the competitiveness of Nigerian goods in international markets.
According to Aluya, Nigeria’s foreign trade trajectory within the African Continental Free Trade Area and potentially with BRICS needs local infrastructure or risks being a dumping ground due to unbridled importation from allied countries with more competitive goods.
“If we open the door, Nigeria might end up becoming a dumping ground for other African countries. Let me give you an example: South Africa, Morocco, Egypt, and Algeria—these countries I just mentioned—should have sufficient infrastructure to support their production,” he noted. “If you allow AfCFTA to go free with all these countries, you produce a dumping ground in Nigeria, period. And considering the Nigerian mentality, we are always after the cheapest products.”