Jonathan makes 'significant' trip to China: Nigeria's President Goodluck Jonathan paid a state visit to the People's Republic of China in July as part of a strategy to further cement the existing bilateral ties between both nations. Frederick Mordi looks at the gains of the visit to Nigeria, and reviews the relations between the two countries.
Apart from the often massive infrastructure projects carried out by Chinese companies, Chinese consumer products are now everywhere in Africa. They range from cheap but trendy mobile cellphones, to equally cheap clothing items and hundreds of thousands of other everyday products in between. Millions of Africans, who live below the poverty line, readily patronise these products despite their often perceived low quality, because they are affordable.
Western propaganda on China's poor human rights record ostensibly meant to curtail the Asian country's aggressive expansion strategy in Africa has done little or nothing to stem the tide. If anything, it has made the Chinese even more resolute in their mission to spread their grip across the continent. Chinese President, Xi Jinping, embarked on a business trip to Tanzania, South Africa, Republic of Congo, and Russia, its key political ally, within a week of taking up office, to consolidate bilateral relations with these countries.
China also has a strong presence in Nigeria, its third-largest trade partner in Africa. More than 200 Chinese companies operate in the country in diverse sectors such as construction, telecommunications and manufacturing.
Mindful of China's clout in global business and international politics, Nigeria's President Goodluck Jonathan led a high-powered delegation comprising top government officials and key business leaders in July on a five-day visit, as part of efforts to further strengthen the ties between both nations.
During Jonathan's visit, a number of agreements were signed between the two countries. They include a lending pact between China's Import-Export Bank and the Nigerian Ministry of Finance for the expansion of four airport terminals. Agreements were also signed on visa regulations, legal issues involving the import and export of cultural properties, and economic and technical cooperation with a view to fast tracking business relations.
First Bank of Nigeria, one of the leading banks in the country, also signed an agreement with China Development Bank to support small and medium enterprises (SMEs) in Nigeria with an on-lending facility of mom.
Jonathan used the trip to reinforce bilateral relations between China and Nigeria and to reach out to key players in the Chinese economy, whom he invited to invest in Nigeria, which he described as the preferred investment destination in Africa.
He said: "Nigeria today is like China 20 years ago. It is entering into a high growth phase. The economy is suitable for private sector involvement; we offer the best incentives and we have put the right structures in place to reduce the cost of entry into Nigeria. All of this is to encourage private sector participation in Nigeria."
The annual bilateral trade between both countries rose from $2bn in 2002 10 $13bn in 2012. Jonathan said this exponential growth reflects the growing importance of Nigeria to China, adding that the need to further strengthen this mutually beneficial relationship in formed the visit. He also said the decision of the Central Bank of Nigeria (CBN) to convert part of Nigeria's foreign reserves from US dollars to the yuan, the Chinese currency, was part of the government's strategy to consolidate this bond.
He said: "The trade between Nigeria and China accounts for nearly one third of the trade between China and West Africa, and this will continue to grow bigger, indicating the importance of Nigeria to China in the regional market. Beyond trade, China has been instrumental to supporting Nigeria with financial arrangement and investment in strategic infrastructural projects like rail, road and free trade zones, among others."
The Minister of Trade and Investment, Olusegun Aganga disclosed that the largest coal-to-power company in China is considering investing in Nigeria to take advantage of the ongoing reforms in the electricity sector that has opened up a lot of opportunities for investors.
He added: "Many big companies who are into power generation and transmission have indicated their interest in investing in Nigeria. In addition to this, we have held discussions with China Development Bank in the area of small and medium development. In fact, the momentum is very high in terms of investors' interest in Nigeria."
Jonathan's Chinese counterpart, Jinping, shared his sentiments, saying: "Both China and Nigeria are now working hard to accelerate our respective development."
Shedding more light on the gains of the visit to Nigeria, the special adviser to the President on media and publicity, Reuben Abati, explained that it was in the nation's strategic interest.
He said: "China is a very important country. China is the largest market in the world, with its 1.35bn people. China is also the world's largest creditor nation, the largest importer and exporter of goods and a large consumer of primary commodities, including crude oil. In fact, after the US, China is the largest importer of crude oil from Nigeria. So, it is in our strategic national interest to have very good relationship with such a country."
Abati, who reiterated that the West remains Nigeria's key trade partner, said China is also an important partner, adding that China has shown a lot of interest in Africa in the last few years.
Abati said: "What Nigeria is interested in is long-term sustainable relationship between the two countries. China has shown a lot of interest and support for the President's determination to diversify the nation's economy. Part of the purpose of this trip is also to encourage China to invest more in Nigeria."
Nigeria's Finance Minister and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala had announced that the country secured a siabn Chinese low-interest loan to develop airports and hydropower plants and added that "China is desirous of increasing its lifting of Nigerian oil."
Building on the synergy
Analysts point out that it is in Nigeria's interest to further explore the relationship with the oriental country as both have a lot of things in common. For instance, they note that both are major emerging economic power houses: Nigeria, Africa's most populous country, largest oil producer, and second-largest economy, belongs to the Mint (Mexico, Indonesia, Nigeria and Turkey) bloc, while China, the world's most populous country, largest creditor nation, and second-largest economy, belongs to Brics (Brazil, Russia, India, China and South Africa).
They also argue that the discovery of shale oil in the US, reportedly interested in exploiting this as an alternative to crude oil, may adversely affect Nigeria's oil revenue. It is therefore logical, they posit, that Nigeria diversifies its potential revenue sources.
China has reportedly indicated interest in Nigeria's oil industry, currently dominated by Western multinationals such as Chevron, Shell, ExxonMobil, and Total. It was reported recently that China Petrochemical Corp is seeking a 20% stake in an offshore Nigerian field from French company, Total, for $2.5bn.
Both nations established formal diplomatic relations on loth February 1971. Since then, bilateral ties between Nigeria and China have become stronger due to renewed focus on strategic cooperation. During former President Hu Jintao's visit to Nigeria in 2006, both nations agreed to a four-point plan to improve bilateral relations--a key component of which was to expand trade and investments in agriculture, telecommunications, energy, and infrastructure development.
Apart from trade, China has been quite supportive of Nigeria's political and social aspirations. China backed Nigeria's quest for a permanent seat at the United Nations Security Council and helped develop and launch the Nigerian communications satellite (NigComSat-1) in 2007 to expand cellular and internet networks. There is little doubt that China is gradually displacing the West in terms of trade relations with Africa. The flexibility of the Chinese seems to give them an edge over Western firms that are more rigid in their approach. China understands what Africans need and moves fast to meet those needs. That is why Chinese businesses appear to be successful on the continent.
For Nigeria, aspiring to be the world's top 20 economies by 2020, it's only natural to build on this synergy with China.
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|Comment:||Jonathan makes 'significant' trip to China: Nigeria's President Goodluck Jonathan paid a state visit to the People's Republic of China in July as part of a strategy to further cement the existing bilateral ties between both nations.|
|Date:||Aug 1, 2013|
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