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Fifty years, five problems - and how Nigeria can work with China in future

China town is a shopping centre with over 300 shops and 200 apartment units was opened in 2005 with the aim to facilitate trade and deepen China - Nigeria relationships
Vendors in front of their shop in China Town, Ojota, Lagos. Pius Utomi Ekpei/AFP via Getty Images

Since establishing diplomatic relations on 10 February 1971, Nigeria’s relationship with China has developed into one of the most important bilateral relationships maintained by either country.

Apart from the exchange of high level visits, Chinese companies and money have found their way into Nigeria, Africa’s largest economy. They are involved in a variety of major projects in Nigeria.

As at 31 March 2020, Chinese loans to Nigeria stood at US$3.121 billion, which is 11.28% of the country’s external debt of US$27.67 billion. The growing trade and presence of Chinese finance in Nigeria has also led to changing narratives about increased migration on both sides.

Over the years, Nigeria’s relationship with China has broadened and deepened with China’s growing power and interest in securing its regional interests (particularly within the South China Sea), and taking its place as a major global actor. Although Nigeria has largely stayed away from China’s fairly assertive regional posture, it’s affirmation of a commitment to the ‘One-China Policy’ has been important to China. Nigeria demonstrated this by the forced relocation of Taiwan trade office from Abuja to Lagos in 2017.

The governments of both Nigeria and China often describe their relationship as a “win win” partnership – a term China often uses to describe its relationships with other African countries.

During former Chinese President Hu Jintao’s visit to Nigeria in 2006, his host and then Nigerian President, Olusegun Obasanjo, remarked:

From our assessment, this twenty-first century is the century for China to lead the world. And when you are leading the world, we want to be close behind you. When you are going to the moon, we don’t want to be left behind.

Bitter sweet mixture

But 50 years of Nigeria-China relations has been a bitter-sweet mixture. At independence, Nigeria’s pro-British and pro-West foreign policy had no dedicated space or support for communist China.

During the Nigeria-Biafra war, the Nigerian government received arms support the from USSR - but not China. It has been reported that China supported Biafra in terms of small arms and ammunition via Tanzania.

After the war, the Nigerian government implemented the 3Rs - reconciliation, reconstruction and rehabilitation. It also visited countries in the West and East. It was within this context that Nigeria, along with other African countries, supported the 1971 resolution to accept China as a full-fledged member of the UN.

An economic exhibition followed in 1972 and Yakubu Gowon, Nigeria’s leader, visited Beijing in 1974. But it was not until the early 1990s that China assumed an important role in Nigeria.

The backlash from the West over the annulment of the June 1993 presidential election forced Nigeria to look more towards China.

Thus, China became an important element for Nigeria’s response to Western sanctions and other forms of pressures, and strategies to force a preferred political outcome. China’s non-interference policy in the domestic affairs of other countries fitted well into Sani Abacha’s ultimate goal of becoming a civilian president. The period also coincided with the early beginnings of Beijing’s own “going global” policy that saw it unleash abroad its economic influence and multinational companies.

Under Abacha, an agreement was signed in 1995 with the China Civil Engineering Construction Corporation to take up projects -although some reports trace the company’s entrance into the Nigerian market to 1981. What is clear is that Nigeria is the company’s first overseas market ; and currently CCECC works in 29 of Nigeria’s 36 states.

Over the last 50 years, the Sino-Nigerian relationship has developed clear patterns. Roughly, the first 20 years may be described as a political phase. The ensuing decade was a mixed era of political and economic features while the last 20 years or so show an intensification of China’s economic presence in Nigeria. Clearly, the relationship has become more economic as China evolved from a political power to a global economic giant.

However, after a half century of official relationship, the time has become ripe for a review of the balance sheet.

The “win-win” smiles

China is one of the most important lenders of development finance to Nigeria. Chinese firms and finance play a prominent role in Nigeria’s infrastructure development. This is notably in the construction of railway lines and road (re)construction across the country. Some examples are the $874 million, 187km Abuja-Kaduna rail; the $1.2 billion, 312km Lagos-Ibadan expressway; the $1.1 billion Kano-Kaduna railway lines and the $600 million airport terminals in Abuja, Lagos, Port Harcourt and Kano.

Nigeria is also one of Africa’s top destinations for Chinese foreign direct investment (FDI). Although accurate figures are difficult to ascertain, it is estimated that about 5% of Chinese FDI stocks in Africa and 4.6% of FDI inflow in 2019 goes to Nigeria.

Data on trade between the two nations for the first 30 years of their relationship is not available. Nevertheless, more reliable data has been available since 2003. Since then trade between the two nations has increased from US$1.86 billion to an estimated US$20 billion in 2019. Trade flows are in China’s favour, with China running a trade surplus of about US$17.5 billion for the years 2015 to 2018. Nigeria sells crude oil to China and, in turn, buys manufactured goods.

China also contributes to the development of Nigeria’s human capital. Many Nigerian students now study in Chinese schools – with a few on scholarship. Chinese companies are also building education and training facilities in Nigeria.

The underbellies of win-win

The relationship is not without its problems. Aside from racism against Nigerians and other black people in China, there are four other problems.

First is the negative impact of Chinese imports on Nigerian industries, of which the biggest casualty has been textiles.

For example, in Kano - which is considered to be one of the main textiles cities in northern Nigeria, an estimated 28,000 Nigerians lost their jobs to Chinese imports as at 2015.

Nigeria’s shoe industry has also taken a big hit.

The second problem relates to the bad treatment of Nigerian workers by their Chinese employers. There have been many instances of maltreatment of these workers. This raises questions about the ability of Nigerian government to develop – or enforce – appropriate labour laws and conduct regular inspection of work places.

Third is the issue of unsubstantiated claims about Chinese companies in Nigeria. A good example is the claim that China uses its prisoners in construction projects in Nigeria.

The fourth problem relates to Chinese loans to Nigeria, which often generate concerns among citizens. These range from those that believe they are unsustainable to those that claim that the agreements allow China to take over Nigerian assets. These persist because of the secrecy surrounding the loans.

Preparing for the next 25-50 years

Nigeria now needs to prepare for the next 25 to 50 years.

China can continue to play an important role in Nigeria’s development. However, Nigeria must urgently address the negative side of the relationship.

First, Nigeria’s regulatory institutions, including the courts, standards setting bodies, ministries and agencies, must apply the laws of the country without fear or favour.

China has said it will not tolerate Chinese companies disregarding Nigeria’s labour laws. But, it is up to the local regulatory institutions to assert the supremacy of the Nigerian law.

Secondly, Chinese textile firms must be encouraged to create employment.

Lastly, people-to-people relationship must also be encouraged and strengthened.

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