50 Years of Nigeria-China Relations: Who Are the Real Gainers?

50 Years of Nigeria-China Relations: Who Are the Real Gainers?

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Although Nigeria-China relations date back to more than five decades, recent developments call for a careful and detailed analysis of this relationship with respect to investment, trade and aid. This month, Nigeria marked fifty years of bilateral relationship with China, with the leaders of the two countries exchanging solidarity messages.

China’s bilateral trade and economic partnerships with African countries can be traced back to the early 1900s. However, China and Nigeria did not establish diplomatic relations and economic partnerships until 1971. For the past five decades, especially after the establishment of the strategic partnership of 2005, the wide-ranging bilateral cooperation between the two countries has been a pacesetter in China-Africa cooperation.

Nigeria is a resource-endowed country with a growing youthful population. It has potentials for speedy growth but, according to many commentators, needs a country like China whose economic and developmental goals are similar to hers for motivation. China on the other hand, in the last three decades, has been making dynamic strides and has attained economic independence and humongous growth.

Nigeria has the largest economy in Africa, while China is the world’s second largest economy. In recent years, under the strategic guidance and personal attention of their two leaders, President Xi Jinping and President Muhammadu Buhari, the relationship between China and Nigeria has reached new heights unmatched in history, bringing tangible benefits to the two countries and their people.

The past 50 years have witnessed an enhanced political mutual trust. On October 1, 1960, Nigeria declared its independence. On the same day, the Chinese government recognized the political independence of Nigeria. In 1971, Nigeria with other African countries firmly supported China’s restoration of its legitimate seat in the UN and the Security council. The two countries have enjoyed frequent high-level exchanges putting China-Nigeria relations on a speedy cruise.

In 2017, then Chinese Foreign Minister Wang Yi paid his first official visit to Nigeria. In 2018, President Buhari was the very first head of state President Xi Jinping met bilaterally after the FOCAC Beijing Summit, and Nigeria formally joined the big family of the Belt and Road Initiative by signing an inter- governmental MoU. In 2019, President Xi’s special envoy, Yang Jiechi paid a visit to Nigeria and held fruitful discussions with President Buhari. In 2020, President Buhari attended the Extraordinary China-Africa Summit in Solidarity against COVID-19.

The last few years have witnessed substantial progress in areas that have been quite beneficial to the government of Nigeria, especially in infrastructure development. In 2019, the two-way trade between China and Nigeria reached 19.27 billion US dollars. A long way from 2001, when Nigeria’s trade with China accounted for merely 1% of the total of Nigeria’s foreign trade.

Today, China is one of Nigeria’s top trading partners. In the area of infrastructure, there are so many tangible results from Nigeria’s cooperation with China such as Abuja-Kaduna Railway, Lagos-Ibadan Railway, Abuja Light Rail, airport terminals in Abuja and Port Harcourt. They were all financed with loans from Chinese Banks facilitated by the government. Before now, Nigeria’s traditional development partners mainly in Europe and the Americas (U.S. A. and Canada) dominated her investments and trade relations.

Although Nigeria and those countries have also come a long way in their relationship, it is debatable if there have been significant gains that have come to Nigeria in terms of infrastructural development and concrete investment.

Many analysts opine that those relationships were exploitative, especially from the trend in the structure and pattern of trade and poor FDI inflow into the country. This is based on the fact that the oil and gas sector dominates the country’s exports to the tune of about 98%. This is coupled with the fact that FDI inflows from Europe and America were majorly into the oil and gas sector that had very limited direct benefits to the population.

On the other hand, China has been able to provide Nigeria with low-interest loans, favourable bilateral trade policies, and substantial foreign aid – both technical and humanitarian. The recent boost in Nigeria-China economic relations is as a result of a number of factors including complementary economic interest of the two countries.

A dimension of this is the market opportunities which drive their relationship. While Nigerian consumers and business owners are looking for cheap products from China, Chinese growing manufacturing firms are seeking market opportunities for their products in Nigeria.

Also, the input sourcing and export-promotion drive of the two nations is another dimension of the economic affinity. As huge Chinese firms are seeking Nigeria raw materials (oil, gas and other minerals, agricultural products, etc) for inputs and generation of energy, Nigerian exporters are seeking market opportunities for these primary products.

China’s ability to readily provide financial and technical assistance (at concessionary interest rate or/and with aid) to Nigeria is another critical factor consolidating this relationship. The recent repeated political visits by Nigerian government and the reciprocal visits by the Chinese Government which led to the signing of bilateral Trade Treaties and Memorandum of Understandings between the two nations have also strengthened the relationship.

However, looking at the trade pattern, China has been the major beneficiary in this area as trade surplus against Nigeria continues to mount. Virtually all imported consumer products in Nigeria are from China.

Between 2003 to 2007, trade surplus rose by almost 91% in 2005 and 24% in 2007 for agricultural products. The difference was not much in the non-agricultural sector. The total trade surplus of China against Nigeria was about $3.3 billion in 2007. On product basis, China recorded trade deficits in very few products. The past 50 years have also witnessed the rapid growth of cultural and people-to-people exchanges.

As the most populous countries in the world and Africa respectively, there is an enormous potential in the area of people-to-people and cultural exchanges between China and Nigeria. The China–Oriented Spring Festival Temple Fair, which has been held in Abuja for 4 consecutive years, has continued to attract more and more local people.In 2019, the number of Nigerian students studying in China rose to 6800, which stands first among all African countries. Many of them are covered by a wide variety of scholarships, studying for their master and doctorate degrees in engineering, medicine, agriculture and other majors.

Read Also: China Launches Campaign Against Food Waste

The 50th anniversary is not unconnected, with renewed economic, business, and cultural ties between the two giants. Although China and Nigeria established diplomatic ties in 1971, the last decade has witnessed unprecedented renewed positive and mutually beneficial developments.

However, most analysts feel the highest form of benefits would be when the transfer of technology is facilitated to help Nigeria attain the status of a developed economy like China did in less than a decade. Besides this, all other things, they believe, are peripheral benefits.

Oche Samson

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