How far, relax o!
China is bringing a grenade to a gunfight
Good morning, Big Brains. We made it to Friday in one piece. Phew, what an actual week!
- Margaret
Word count: ~ 1, 000
Reading time ~ 5 mins
Let’s get into today’s edition:
China is bringing a grenade to a gunfight
The Minister of Power is back in our face with talks of a tariff increase
The Big Deal
China is bringing a grenade to a gunfight
U.S. President Donald Trump has been pushing China’s button with his tariff threats since February 4, and China is finally ready to push back, even if that push brings the whole world down.
China was minding its own business when Trump decided to add more tariffs on all its goods. This forced China to pull a classic revenge move by kicking back with its own set of tariffs on U.S. farm products. It didn’t stop there, it also decided to take things a notch higher by warning that ""If war is what the US wants, be it a tariff war, a trade war or any other type of war, we're ready to fight till the end," . We’re not sure if “any type of war” means that kind of war, but the world’s reaction to China’s threat was “how far, relax o”.
The thing is that China isn’t just running its mouth. China’s Premier, Li Qiang, announced that the country would be putting even more money into its military this year just like it did last year. At the same time, he told the world that things were shifting fast and that China was ready to handle whatever came next.
Beijing has also said that its also starting to move to attract investors looking for new trade partners outside America.
As if things couldn’t get any messier, China also dragged the U.S. into another argument, accusing it of using the fentanyl crisis as an excuse to impose more tariffs, claiming that it’s a failed attempt at bullying and intimidation.
As it stands, the world’s two biggest economies are going tariff for tariff, and the ripple effects will be felt everywhere—including Africa.
Why is this a big deal?
A U.S.-China trade war might sound like Asia and North America’s problem but Nigeria isn’t exactly left out of this mess.
First, things could get more expensive for people in the country and here’s why: The U.S. and China are Nigeria’s biggest importers. In Q2 of 2024 alone, we spent ₦624.5 billion importing from the U.S and ₦602.9 billion importing from China.
If either of these countries start losing money due to their trade war, the next course of action would be to raise the prices of their locally made items to make up for it. From China alone, we import everything from household commodities to plastic, paper, electronics and medical equipments — things that every Nigerian purchases.
Second, Nigeria’s oil sales could experience a dip. China is one of our biggest customers when it comes to crude oil. If their economy slows down because of this fight with the U.S., they might start buying less oil, and that would hurt Nigeria’s already struggling economy.
Then there’s the question of investment. China has been forming partnerships worth billions of dollars with Nigeria since 2024 but if this trade war drags on and it starts to feel the pressure, the country might decide to cut back on spending abroad and that would translate to lesser money flowing into Nigeria.
The trade war could also worsen Naira’s weak knees. When global markets shake, currencies like ours tend to suffer. If investors panic because of the trade war, the naira could lose value, making everything even more expensive.
Hopefully, Trump and China figure out their shit before the rest of the world gets caught up in it.
The Minister of Power is back in our face with talks of a tariff increase
Speaking of tariffs, we have our own problems to worry about. Remember how we said your electricity bill might go up soon? Yeah, that’s still likely to happen because the Minister of Power, Adebayo Adelabu, is doubling down on the tariff increase talks.
Last week, Nigeria hit a record peak electricity generation of 5,801.84 MW. To Adelabu, this sounds like rookie numbers because increasing tariffs will easily push it up to 7,000 MW. Basically, more money from your pocket = more megawatts.
According to his Special Adviser, Bolaji Tunji, the tariff “regularization” (read: price hike) is necessary to clear legacy debts of ₦2 trillion to power generation companies and make Nigeria’s energy sector more sustainable. Their proposed plan is to impose these hiked prices on consumers, especially those in Bands B, C, and D, so the government can reduce its subsidy burden and improve liquidity in the sector.
Like many other things in Nigeria, more megawatts on paper don’t always translate to stable power in real life. But those hiked charges will definitely have real life impact on the pockets of Nigerians who are already dealing with 1,001 other tariffs.
We’d love to trust the process but we recently watched the government implement a 50% increase in telecommunications tariff with the promise of improving internet connectivity– look how that’s going.
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