The signing of the Commercial and Investment Partnership (CIP) between the United States and Nigeria in July 2024 was marked by minimal publicity, lacking dramatic speeches or celebrations. Yet, this five-year agreement, which is supported by various US government agencies focused on commerce and agriculture, has evolved into one of the most significant economic alliances for Nigeria in recent years.
This partnership represents a strategic approach by Washington to enhance its competitive edge against Beijing in Nigeria, not by attempting to outspend China's state-funded lending, but through establishing commercial agreements, harnessing private capital, and advocating for reforms that align with Nigeria's development objectives.
A ministerial meeting for the CIP held in Lagos in January convened a high- ranking US delegation of trade and finance experts. They assessed critical reforms identified by working groups that include both US and Nigerian business leaders.
Economically, Nigeria's position as the second-largest trading partner of the US in Africa is underscored by bilateral trade in goods and services approaching $13 billion in 2024. Additionally, US foreign direct investment in Nigeria climbed to $7.9 billion in 2024, reflecting a 25% increase from the previous year, establishing the US among Nigeria's top foreign investors.
Bradley McKinney, the US Deputy Assistant Secretary for the Commercial Service, expressed that the working groups have devised practical, actionable strategies aimed at increasing trade and strengthening the bilateral commercial ties between Nigeria and the US.
Jumoke Oduwole, Nigeria's Minister of Industry, Trade and Investment, who co- led the discussions, noted that the partnership aligns with President Bola Tinubu's economic reform goals. The focus areas—infrastructure, agriculture, and the digital economy—highlight areas of strength for both nations and represent opportunities for collaboration that can catalyze investments, support private enterprises, and enhance Nigeria's role as a significant trade hub across Africa.
The priority of accelerating non-oil export diversification and ensuring that Nigerian companies can compete effectively in the US market is among the central tenets of the engagement.
The structure of the CIP indicates a vital element of the US's strategy for economic influence. It is centered on fostering trade and commerce in line with Nigeria’s developmental priorities—promoting non-oil exports, advancing the digital economy, and enhancing agricultural practices—rather than relying solely on debt contracts that necessitate repayments regardless of project success.
Experts, including Nigerian policymakers, note that this distinction is crucial. The US Development Finance Corporation (DFC) aims to facilitate investment primarily through equity, loan guarantees, and insurance against political risks, which is designed to inspire private investment rather than substituting it with state-sponsored loans.
The DFC's investment portfolio has nearly doubled from $25.7 billion in 2020 to $48.9 billion in 2024, with $12 billion of new investments added in 2024.
Energy remains a pivotal aspect of Nigeria's economic trajectory. Over 85 million Nigerians—more than 40% of the population—lack reliable electricity access, and those connected to the grid frequently encounter outages, affecting businesses and households alike. The energy sector attracted $6.7 billion in investments in 2024, including $5.5 billion for oil and gas operations, $400 million for the Presidential Metering Initiative, and $700 million for clean mobility and cooking solutions.
The US's significant engagement in Nigeria's energy landscape has broadened. In 2022, the Export-Import Bank of the United States (EXIM) provided $7.4 million to Sapele Power Plc to acquire US-manufactured energy storage systems—marking a milestone as the first energy storage project for EXIM and one of the first of its kind in sub-Saharan Africa. Moreover, ICE Commercial Power, aided by the US African Development Foundation and Microsoft, has connected numerous businesses to affordable, dependable energy sources, helping them save up to 35% on energy expenses.
On the other hand, Chinese involvement in Nigeria has historically revolved around state-level agreements negotiated with little oversight from legislative bodies or civil society. Many Chinese loan agreements contain clauses restricting the ability of the Nigerian government to disclose loan terms or negotiate with other lenders, thereby affecting the nation's autonomy.
China remains Nigeria’s largest bilateral lender, with an outstanding debt amounting to $5 billion as of March 2024. In September of that year, President Xi Jinping and President Bola Tinubu met to discuss increasing Chinese investment in Nigeria across various sectors.
In 2025, Nigeria topped the charts for the China Belt and Road Initiative (BRI) in terms of construction volume with contracts worth $24.6 billion, significantly higher than the previous year. This surge underscores the ongoing depth of Nigeria's commercial relations driven largely by energy and manufacturing.
Despite such growth, criticism is mounting regarding this model. The Tinubu administration is currently negotiating a potential $2 billion loan from the Export-Import Bank of China to establish a new electricity 'super grid' linking eastern and western Nigeria. Skeptics caution that accruing additional foreign loans for essential infrastructure might jeopardize Nigeria's debt sustainability given the rising inflation and the substantial share of government revenue devoted to debt servicing.
Between 2000 and 2023, Chinese banks disbursed $182 billion in loans to African nations, with Nigeria among the largest recipients. Observers emphasize that the potential of the Tinubu administration to secure favorable terms in negotiations will reflect Nigeria's capacity to leverage its reform progress for better terms in international partnerships.
The effectiveness of Nigeria's reforms is being recognized; in 2023, the establishment of a dedicated Energy Office within the Presidency paved the way for comprehensive reforms aimed at transforming Nigeria into a leading global investment destination. Initiatives under Directive 40 introduced competitive fiscal policies for non-associated and deepwater gas investments. Additionally, Nigeria's energy transition strategy envisions significant renewable energy integration by 2060, necessitating substantial investments to achieve net-zero emissions.
The ongoing dialogue between the US and China regarding their respective investment models in Nigeria highlights the varying approaches. The US, through its development agencies and private sector engagement, promotes a method that emphasizes transparency, caution, and gradualism. Contrarily, China offers rapid deployment and expansive market access, evidenced by substantial project financing. The ongoing negotiations for the proposed Chinese loan will be pivotal in establishing Nigeria's ability to incorporate local content and transparency measures, setting a precedent for future infrastructure financing arranged with China.
Ultimately, the evolution of partnerships with both the US and China underscores Nigeria's emergence as an assertive player in its economic destiny, strengthening its leverage to demand beneficial investment terms and transformative technology transfers as it looks to attract significant foreign investments in its energy sector.
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