ISSUES IN NIGERIA – CHINA COOPERATION AND THE WAY FORWARD BY PROFESSOR Y.A. ZOAKA
DEPARTMENT OF POLITICAL SCIENCE AND INTERNATIONAL RELATIONS UNIVERSITY OF ABUJA
BEING A PAPER PRESENTED AT A ONE DAY SEMINAR TO MARK 45 YEARS OF NIGERIA – CHINA COOPERATION AT THE CHINESE CULTURAL CENTER ABUJA, ON 18TH FEBRUARY, 2016.
Countries in the international arena search for partners and favourable investment climates in order to bolster their internal economic structure to promote the prosperity of their countries and also to promote the integrity of their territory for their continuous survival. In a bid to create a favourable economic, political social and cultural climate for the survival of its people and state it goes into cooperation and bilateral relationships in order to deepen friendship and promote mutually beneficial goals. It is within this backdrop that we shall examine the relationship between Nigeria – China which has lasted for a period spanning 45 years. Both Nigeria and China want to create mutually beneficial deals by narrowing their differences. Although, Nigeria is still struggling to find its economic feat, China is both the fastest growing and second largest economy in the world with over three (3)trillion dollars in its reserve. Nigeria cannot be ignored by China because of its readily available market potential, and its overall strategic importance in Africa. Nigeria is expected to provide the lead in Africa and China cannot afford to ignore Nigeria. Within the gamut of this paper, we shall attempt an explication of the problems confronting Nigeria in its strategic cooperation with China and also remind us of the historical ties between Africa and China. We shall discuss the areas of cooperation between Nigeria and China and also explicate the issues arising from the relationship with the overallgoal of proffering solutions in moving forward.
A Brief Historical Development of Nigeria – China Relationship
It is usually not out of place to trace Nigeria – China’s relationship to the trip made by the first Chinese voyage to Africa 600 years ago. However, the first ever relationship between the two countries began officially in 1960 when the new Nigerian Government invited the Chinese to its independence celebration. But, it was in 1972 that the General Gowon’s administration first paid an official visit to China shortly after the Nigerian Civil War and established formal contact with China.However, it was General SaniAbacha who invited Chinese state owned companies into the country in the mid 1990’s.Although it was not until the election of General OlusegunObasanjo as President in 1999 that the relationship between the two countries began measurably to deepen. In between the Gowon and Obasanjo’s era, we should note that in 1977, as reported by Agubamah (2014) that the Chinese Primier Li Peng visited Nigeria to boost China’s renewed interest in Africa aimed at reversing the decline in China’s trade with Africa. The first diplomatic ties was established in 1971. By 2013 the non-financial direct investments in Nigeria stood at $1.79 billion about 293.5 billion Naira (Nigerian Tribune, March 2014). However, China’s investment in Nigeria kept souring especially the volume of trade which Utomi (2016) noted has been increasing rapidly from 1.3 billion Naira in 1990 to 5.3 billion in 1996. Most of the growth was attributable to the oil sector.
As earlier discussed, Nigeria-China cooperation has blossomed into strategic partnerships aimed at addressing key issues of the partnership. China and Africa has had a friendship that can be traced back to 2000 years ago when Emperor of the ming dynasty sent Admiral Zheng to the African continent with goods and greetings from a nation tucked far away in the eastern part of the world. Since then and after attaining independence in 1948, the Peoples Republic of China began to have diplomatic relations with African countries in the 1950’s. This found expression in the 1955 Bandung Afro-Asian Conference which provided an opportunity for the two sides to have direct contact. During the conference the Chinese Premier Zhou Enlai and Vice Premier Chen Yi who was also the foreign Minister had talks with the then Egyptian Premier Nasser and representatives from Ghana, Libya, Sudan, Liberia and Ethiopia. This reaching out paid off when Egypt became the first country to establish diplomatic relations with the PRC on May 30th 1956. By October 1959 Guinea became the first sub-saharan Africa country to follow Egypt’s example (Hongwu 2013). As Hongwu (2013) further asserted the following 20 years saw great headway in Sino-African relations because by 1979, a total of 44 countries had established diplomatic relations with China, more than 120 African heads of state and over 210 minister – level officials have visited China. While on the other hand, Chinese leaders and more than 40 other minister level officials paid over 300 visits to African countries. In both directions several delegations were sent covering a wide range of areas like trade, culture, sports, education, medical and military. Over 100 African students and professionals were trained in China, while dozens of Chinese medical teams served in Africa.
Although China has bolstered its relationship in the Africa through foreign aid, the principles that characterize this relationship is guided by mutual respect, equality, reciprocity and non interference which clearly shows a marked departure from what Africans have suffered in the hands of Western European countries who give foreign aid with strings attached including interference in the domestic affairs of countries. Egypt was the first African country to accept Chinese aid in 1956. By 1978 China had dispatched $2.4 billion in the form of economic aid to 36 Africa countries more than 200 aid projects in the fields of Agriculture, meteorology, health, sports, and education were carried out in Africa with Tanzania – Zambia Railway being the most well known project. Therefore Sino-African relations shows clearly that China has been and strongly supportive of the African countries and peoples in their struggle against colonialism and racialism in other topursue development through promotion of peaceful world.
China – Nigeria Relations
It is widely acknowledged by both China and Nigeria that their cooperation relationship have spanned over a period of 40 years but it was only recently in 2005 that the two countries witnessed an all round development in their bilateral relationship through strategic partnerships in some areas of mutual interest. This is seen in the close cooperation in international and regional affairs, economic and trade cooperation, human and cultural exchange space, science and technology, infrastructural development and rehabilitation and in the construction industry (Zoaka 2013:16).
We have documented elsewhere that China-Nigeria economic and trade relations and showed the tremendous increase in the volume of trade between 2001 and 2006 moving from USD 384 Million to USD 3 billion. But currently the trade volume is put at USD 13 billion in 2015. In a recent statement credited to the Chinese Ambassador to Nigeria, quoted in Sunday telegraph 2016:50). The Chinese Ambassador was quoted as saying:
Nigeria is Chinas largest engineering contracted projects market in Africa; Nigeria is the second largest export market of China in Africa and Nigeria is also the third largest trading partner and major investment destination in Africa.China’s willingness to integrate its development with independent and sustainable development of African countries.So as to realize common development must be lauded.
While China’s main import from Nigeria is oil and food, China’s exports to Nigeria are manufactured goods. Top in the list of exports to Nigeria are electrical and machinery equipment’s parts, followed by vehicles, nuclear reactors. This relationship as we have argued elsewhere shows that while Nigeria was largely exporting raw materials, China was exporting finished goods into Nigeria.
Other positive developments in Nigeria – China relations in the areas of space – science and technology leading to the formal launching of NICOMSAT I and II. Human and cultural exchanges which has promoted the educational advancement of several thousand that have obtained doctorate, master’s and bachelor’s degrees in different fields including Chinese language to break the language barriers including the posting of Chinese language tutors to propagate the teaching and learning of Chinese language in Nigeria.
One of the Chinese companies Huawei for instance has trained more than 5000 local engineers and launched a 1000 girls Information and Communication Technology (ICT) program in partnership with the Federal Ministry of Communication Technology. Lots of Chinese enterprises donate to schools, revamp roads for local communities, donate medical equipment to local hospitals, and contribute money and schools supplies to handicapped children’s schools especially during the Ebola virus disease pandemic; they donated a large number of protection kits to local communities.
A sizeable number of Chinese companies have established and are involved in industrial activities spanning different fields. In spite of all the very laudable and commendable development outlook and posture of the Chinese in Nigeria there are several areas in which certain issues have come up that requires the two countries to look into more carefully in order to promote mutual development and the win win situation advocated in the cooperation’s and partnerships. They include but may not be limited to the following:
(i) Trade imbalance
(ii) Stifled technological transfer
(iii) Tax evasion
(iv) Slave wages
(v) Poor working conditions
(vi) Economic inequality
(vii) Flooding of markets with cheap goods
(viii) Uncoordinated leadership and policy
(ix) Lack of continuity of policies and policy distortions
(x) Security threats on Chinese nationals
(xi) People to people contact etc.
The above identified areas of concerns shall not be discussed as itemized but under broad sub-themes that could elaborate these concerns.
(i) Imbalanced/Lopsided Relationship
The imbalanced/lopsided relationship theme discusses the imbalance between the two countries that is in favor of China, while China’s exports to Nigeria are souring.
Before we set up in 2009, trade volumes between Nigerian and China was about $ 2.7 billion in favor of China and $700 million in favor of Nigeria but we looked at it and decided to address this imbalance in trade relations between both countries and today we are talking about trade volumes between both countries growing to $13 billion for China and &10.5 billion for Nigeria.These trades on the part of Nigeria have seen us export to China such products like cocoa and cotton wool.(PresidentChina –Nigeria business forum 2015)
Agubamah (2014:67) observed the lopsidedness in trade which is estimated at $2 billion trade gap which is still there. Thus trade deficit is both a concern to Nigerian and Chinese leaders however it has not been substantially addressed. An analysis of the trade deficit will show that while Nigeria is still exporting primary products, China is exporting finished goods into Nigerian market. Therefore it is in the interest of the Chinese leaders to ensure that they encourage more manufacturing firms to set up their businesses here in Nigeria. Related to the above is the issue of dumping of goods in Nigeria.
Nigeria should be concerned about the dumping of textile products by Chinese traders in Nigeria. We must note that the textile industry in Nigeria used to be the second largest employer of labour after agriculture but the textile however apart from the fact that the textiles industry collapsed, it is estimated that 350,000 jobs have been lost as a direct result of competition from China (Reuters 2016). MudaShir(2015) reported in the daily trust that the Nigerian Customs Service seized allegedly smuggled textile materials from the KantinKwari market acclaimed as the largest textile market in West Africa. A total of 75 warehouses stocked with textile materials estimated at N315 billion were seized. This led to the arrest of some Chinese Nationals. Therefore if a win-win situation is to be achieved primarily in the textile industries Chinese entrepreneurs should invest heavily to manufacture the textiles here in Nigeria, this will reduce capital flight and also create the badly needed jobs here in Nigeria and consequently wipe out the dependency syndrome of the Nigerian economy instituted by western imperialist interest. There is no doubt that the terms of trade from the analysis above favored China whose exports represented 73% of the bilateral trade total in 1995 and 68% of the total in 2000. In 2008 it was 93%. The table below shows it all.
Table 1.1: Nigeria – China Trade 2001-2008 (US Dollars)
Year Nigeria’s Export to China Chinese Export to Nigeria Bilateral Trade Value China’s Export Total %
2001 227.4 917.2 1,144.6 80.1
2002 121.3 1047.1 1,168.4 89.6
2003 71.7 1787.5 1859.2 96.1
2004 462.6 1719.3 2181.9 78.8
2005 527.1 2305.3 2832.4 81.4
2006 272.8 2855.7 3.133.5 91.1
2007 537.5 3800.2 4337.7 87.6
2008 509.9 6758.1 7268.0 93.0
Source: South African Institute of International Affairs (SAIIA)
From the above table it is evidently clear that the trade imbalance between the two countries favored China.
POLICY DISCONTINUITY AND FINANCIAL INDISCIPLINE
The inconsistency in Government policies and lack of meeting financial obligations on the part of Nigerian government is also very critical in the inability of the Chinese government investment to meet clearly outlined targets. The inconsistency is seen in Nigeria’s initial policy under the Obasanjo’s regime of oil for infrastructure policy which was later changed to oil for cash policy under the Yar’Adua’s government.
A classic example of such changes is depicted by the Obasanjo’s deals with the Chinese which was suddenly changed when there was change of government in 2007. This situation was warranted because as Mthembu-Salter (2009:3) noted, the death of oil for infrastructure was caused by the turning of the oil bloc bidding round which was held two weeks before Yar’Adua took office. Although a total of 45 blocs were placed on offer with 24 pre-assigned to 12 companies’ right of first refusal (RFR) granted some Chinese companies the China Natural Petroleum Corporation (CNPC) was given one bloc in return for its promised Kaduna refinery investment. While China Nation offshore oil corporation (CNOOC) was given four bloc as settlement for the anticipated #2.5 billion loan from Exim bank for the Lagos –Kano railway and the Mambilla Power Station. Immediately following his inauguration, the oil bloc deals were investigated and placed on hold for all the three projects to be executed. The inconsistency in renegotiation of terms has always caused project execution delays and unnecessary increase in the cost of projects. Therefore, lack of organizational discipline on the Nigerian side has always been a problem for full implementation of deals. Thus as the main Chinese infrastructural projects agreed under Obasanjo’s oil for infrastructure terms have been stalled by the Yar’Adua’s government so too have the oil blocs won by the Chinese companies in the oil for infrastructure bidding rounds come under threat. This made the house of representatives in 2009 to set up an Ad hoc committee to investigate the oil for infrastructure and the Committee recommended that OPL 298 be taken away from CNPC although it appeared to be prepared to allow CNPC to retain OPLS 471, 721 and 732 (Mthembu – Salter 2009:3). The oil for infrastructure deals in Nigeria has not fully worked because of the four year electoral circle in Nigeria where cronyism seems to be fully integrated into the oil deals in Nigeria. Once there is a change of government it appears all deals will have to be renegotiated again to take care of the interest of the new individuals in power. This is why even though the change in 2007 was still by the same party but because the president that left power is from the South, the new president is from the North the deals were stalled. This may seem strange to the Chinese officials who have successfully worked out similar deals in other African countries like Angola, Sudan etc but cannot seem to have their way in Nigeria because of the rent seeking nature of the Nigerian elites.
Apart from the rent seeking nature of the Nigerian elites, there is also the challenge of Nigerian Government meeting its financial obligations in project financing. Recently in the maiden media chat of President Buhari he lamented the inability of the Jonathan’s administration to fulfill its obligation when he said
China agreed to pay 70% of cost of railway projects between Lagos and Kaduna and Lagos and Calabar, but previous government failed to pay counterpart funding of 30%; you cannot get a better deal anywhere in the world.
Therefore the lack of meeting counterpart founding is a major impediment to achieving infrastructural development. For the strategic partnership and win-win situation envisaged to be accomplished the Nigerian government must be up and doing in its responsibilities. There should be discipline on the part of the officials.
Maltreatment of Nigerians working in Chinese Companies in Nigeria
Although we seem to over-flog the issue of Chinese maltreatment of Nigerians. Chinese companies are known for being ‘closed’, that is they hardly employ local experts and even bring in labourers from China, because of the problem of language barrier. The condition of employment of Nigerians in Chinese firms does not seem to conform to either Nigerian labor law or the International LaborOrganization (ILO) (Olawale 2010, Zoaka 2013). As a corollary. Chinese firms have a habit of maltreating their workers, by making them to work for longer hours and paying them low wages and they mostly work under poor working condition. Thesemaltreatment can be seen even in the way Nigerian government officials treat Nigerians which could encourage any foreigner to belief that Nigerians have no respect for human dignity. Nigerians are being hounded into prisons in China for a wide range of offences including drug, fraud, other crimes and immigration offences. Some few examples suffices:
Case1: The Lagos State Government according to Olowoopeje (2015) has ShutHongxing Steel Company Limited a Chinese Company based in AmuwoOdofin Local Governemnt for safety violations following the death ofa casual worker Mr. EmekaUmoh who sustained severe burns after liquefied iron spilled on him.
Case 2: The case of two Chinese who own and operate Oceanic Bakeries in Wuse District of Abuja were arrested because they caged the Nigerian workers like animals near an oven in the bakery and were required when thirsty to beg their Chinese manager who would not let them drink water, unveils the harsh and dehumanizing conditions under which Nigerians were subjected to, when thirsty they had to wait for another Chinese to open the door for them to drink water after which they are looked back into the cage (Daily Trust Editorial 2007).
The issue of maltreatment of Nigerians by Chinese firms could constitute a threat to Nigeria – China strategic partnership and deserve the attention of both sides to address the issue as there is also Nigerian maltreatment of the Chinese through kidnappings and harassments by Nigerians who feel that the Chinese are too bossy and extortion of the Chinese by security agencies.
A few cases of kidnapping of Chinese nationals working in Nigeria suffices:
(1) Kidnap of Chui FuLeng in Nasarawa State. Mr. Leng works in a construction company in Toto Local Government Area of Nasarawa State.
(2) Two Chinese Nationals were kidnapped by unknown gunmen in the ZangoDaji area of Lokoja Capital of Kogi State.
(3) Also on 13th March 2015, three Chinese Nationals were kidnapped by a group of 12 heavily armed gun men in Kogi State. The hostages were seized at their residence in the crusher area located on the outskirts of Lokoja.
(4) Mr. Jiang PengFei a Chinese National was kidnapped in Ondo State. The office of the victim JHX Plywood Factory is located at AkinfosileOmotosho area in Ore Town (Vangard: 2015).
(5) Also two Chinese National were killed in Benisheikh, the two Chinese construction workers have been killed by unknown gun men in the North East of Nigeria. This brings to four Chinese who were killed. They were working for the Chinese Civil Engineering Construction Corporations (BBC:2012).
From all these cases of attacks on Chinese Nationals in Nigeria it behoves on the both governments to improve on the protection of lives and properties, through a more frequent people to people relationships the more Chinese Nationals and Nigerians relate with each other without any official protection, the more they will understand each other and be tolerant of each other.
The Issue of Security Threats against Chinese Interest
It has been argued by scholars like Oche (2013) that Chinese investments and citizens are at times targets and victims of indiscriminate violence. For example in 2006 militants in Port Harcourt detonated a car bomb to warn Chinese Oil Companies could suffer further attacks. This is so because Chinese Companies are the only ones taking all the risk to venture in areas that have been left vacant by Western Industrial Countries who will not put their citizens at risk or invest in unfriendly climate ,a risk Chinese firms are willing to take for which they have paid clearly by losing some of their nationals. Because of the threat the Chinese nationals are facing in several parts of Nigeria and Africa at large, the Chinese government cannot afford to pay leap service to issues of security on the African continent where they have embassies in 48 countries but have 15 defenseattaché, while in Europe it has a defense attaché in nearly every European capital cannot be said to be good enough because it means it is neglecting not only the security of its nationals but also paying leap service to the security of its host state(Oche 2013:207). Although we should acknowledge that when Nigeria was threatened by activities of the militants in Nigeria, it was to China that Nigeria turned and received support. Nigeria has received supplies of supersonic F.T fighter aircraft from China in addition to assistance to build a domestic arms industry and enhance naval capacity in the Gulf of Guinea. Although Nigeria has received training and other logistic support from the Chinese government. It is imperative that more intense interest is taken by the Chinese government in order to promote its interest and that of Nigeria by investing more on security, through training and other logistic support to the Nigerian security forces.
People to People Exchanges
While we can conveniently say that the Chinese Government has promoted exchanges between China and Nigeria which has increased interactions between the two sides. We should acknowledge that several Nigerians have travelled to China for one program or the other entirely sponsored by the Chinese government. This has promoted understanding and support amongst a number of Nigerian elites in support of Chinese activities in Nigeria. Apart from the sponsorships for capacity building, China has established 2 Confucius institutes and 3 ChineselanguageCentre’s in Nigeria. The Nigerian people are enthusiastic about learning Chinese language. Available statistics shows that over 2700 Nigerians have benefited from training in various programs that will add value to the Nigerian state and its people.
Conclusion and Way Forward
In conclusion this paper analyzed issues in Nigeria – China Cooperation and the way forward. The issues raised centred on the development of China – Nigeria Relations especially China – Nigeria’s trade relations, Space Science Technology, the corporate social responsibility of Chinese firms, imbalanced/lopsided relationship, dumping of cheap goods, inconsistency in government policies resulting in changes and abandonment of government policies in favour of new ones etc.
A major way forward for the strategic partnership between Nigeria and China is for the country to review its relationship by shifting emphasis from importation to production. This is Juxtaposed with falling oil prices, dwindling naira value and plummeting foreign reserves etc, it is advisable that the Chinese should open overseas factories since Nigeria is currently facing an economic downturn and cannot import goods, since its economy is failing the Chinese Government should encourage the setting up of industries to manufacture here in Nigeria.
Apart from establishing these factories it should also encourage the manufacture of textiles here in Nigeria, telephone sets, electrical appliances, household furniture which were items that have bloated Nigeria’s import bill creating trade imbalances between the two countries and unemployment. Following the footsteps of telecom giants like Huawei are ideal models on how Chinese companies should contribute positively to the Nigerian economy encouraging a win win situation.
Also in view of the dwindling fortunes of Nigeria in the oil sector and with the huge prospects that could be derived from the Agriculture where we have excelled in the past becoming world leaders in the export of groundnut, cotton, palm products and cocoa. This scenario could be reenacted if much energy is directed at agricultural production. So that what is required is the Chinese companies to convert the raw materials to finished products contributing to making agriculture as a foreign exchange earner thereby promoting the much talked about backward integration and industrial development of the giant of Africa.
Although Nigeria has the capacity to benefit more from the over USD$ 400 billion in total trade with Africa moving forward China should be able to invest over USD 150 billion in the Nigerian economy. Nigeria should also take advantage of the China led Asian infrastructure investment bank which is an alternative to US dominated institutions such as the World Bank, and the International Monetary Fund in order to acquire cheap investment funds that could open up the economy. Therefore Nigerian government under the current leadership should engage more with the Chinese in its early days so that it can start and complete projects in good time before substantial part of the regimes time is wasted on frivolities.
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