China and Nigeria: The New Path

People's Republic of China President Xi Jinping walks with Federal Republic of Nigeria President Goodluck Jonathan in Beijing on July 10, 2013., a photo by Pan-African News Wire File Photos on Flickr.

China and Nigeria: The new path

TUESDAY, 03 SEPTEMBER 2013 00:00 OGHOGHO OBAYUWANA
Nigerian Guardian

Foreign Affairs Editor OGHOGHO OBAYUWANA who was recently in Beijing, China, writes about the need for sensible action on all of the identified areas of bilateral interest so that using a fitting development model, citizens in Nigeria and China can truly benefit from the refocused strategic relations between the two countries.

IN order to have a deeper understanding of the philosophy of survival and progress of the Chinese and maybe, the secret of their economic audacity, the rest of the world might do well to pay attention to a Chinese worldview that holds the concept of the Yin (negative) and Yang (positive).

To the Yin for instance, belongs the earth, woman, the moon and the colour black. As for the positive, according to this worldview, you have the Sun, Man, Heaven and the colour White. Between these however, is the doctrine of the middle – the Mean? Now, this doctrine recognizes that there is really no constancy of matter. That at some point, it might be expedient to be Yin or Yang, but a man or a nation must be able to recognize when it pays to be in the Mean. To be in the Mean could be likened to being grey or having sensible adaptability and flexibility.

And unknown to the Chinese Vice Minister, State Council of Information, Li Wufen, he may have been giving a toast to the efficacy of the twin polar concepts recently in Beijing while providing insights to how the strategic relations between Nigeria and China could be made to impact on the ordinary citizens of both countries. Modern China started off as a communist nation. Today, it has effectively employed a blend of progressive communism and free market economic principles to become the world’s second biggest economy.

And the Asian giant is increasingly witnessing state visits by African leaders. Wufen spoke just as the president of another African country Uhuru Kenyatta of Kenya happened to be on a one-week state visit to China. For Nigeria, it is a critical turning point. The African giant is now the third largest trade partner of China in Africa. In 2012, the trade volume between the two countries reached $10.57 billion, and by the end of last year, China’s non-financial direct investment in Nigeria accumulated to $8.7 billion. From a lowly $2 billion in 2002, the volume of trade between Nigeria and China is now projected at $13 billion by the time another stock taking is done. Nigeria currently commands over 30 per cent of China’s total trade transactions with the whole of West Africa.

The new vista of development strategy which the Chinese minister opened by inference, was to the effect that taking advantage of the Chinese model for economic development and transformation rather than a stereotyped proscription being handed to some African countries, is key in the realization of the expected economic benefits of countries like Nigeria which have strategic relations with China. In effect, a change of development strategy by countries seeking to exit the third world has become an imperative in the aftermath of the global melt down.

As China prepares to launch a second satellite into orbit for Nigeria, it can safely be deduced also that part of the bid to consolidate and make meaningful use of the refocused bilateral relations between the continental giants of Asia and Africa, is responsible for the nature of agreements signed by President Goodluck Jonathan with his Chinese counterpart, President Xi Jinping.

Indeed, President Jonathan already disclosed that Nigeria is currently strengthening its investment and economic ties with China because of the exponential increase in the bilateral trade volume between the two countries within the last few years, as well as China’s involvement in the financing and construction of key infrastructural projects in Nigeria.

So, even as there has arisen the need to critically examine the development model delivery for Nigeria, there are issues of concern that collaborations between the two countries can take care of. Infrastructure is one. Power is another. And then there is aerospace, food security and petroleum industry overhaul. Now, with the apparent hewing of a new path, how active can Nigeria be? Have all of the moribund agreements and cooperation formats been given sufficient implementation levers?

We start with petroleum. Agreeing that cooperation with Nigeria in the energy and power sector has become very critical, Minister Wufeng had said “Yes, in the future, we want to set up factories and refine (crude oil) in Nigeria and also, we have that understanding regarding helping out in the mutual cooperation. The investments would involve our equipment and expertise. So, before then the petrochemical companies in China would likely take all the factors into consideration in terms of security of such investments.”

Nigeria currently imports refined petroleum products despite having the reserve and four state-owned refineries. So, this offer deserves a mighty follow up. Well this is not an entirely new concern. Before now, Nigeria had made some inroads for investment drive to Asia with a major focus on China. In 2010, a 42-man business delegation from relevant sectors – maritime and ship-building, energy, power, telecommunications, infrastructure and general services met across the board with Korean and Chinese experts, industrialists and government officials at the instance of the then Minister of Foreign Affairs, Odein Ajumogobia.

Stressing the need for investments and businesses to thrive on both sides with a balanced involvement of both nationals and business concerns, the Chinese foreign minister at the time, Yang Jiechi had urged the Federal Government to provide policy support as well as security guarantees in order for Chinese investments as well as others being planned in aid of infrastructural development. What came out of this?

One of the sweeteners of the consultations by the Nigerian team then, came in the form of a public security system deal by a Chinese firm – ZTE to assist the Nigerian police force in its renewed effort to fight crime. The Nigeria-ZTE security deal also carries a three-year agreement. The Nigerian half of the negotiation table stressed the need then to ensure that the accompanying maintenance component of the agreement is honoured. Heart-warmingly, ZTE further agreed to a stricter maintenance regime, which carries a proviso for the training of Nigerians for the continuous maintenance of facilities to be installed. How far is this journey also?

The firms, which got assurances from the Nigerian government team on facilitated legal business environment incentives, include China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation, Huawei as well as China State Construction Engineering Corporation (CCEC). What has been their level of activity in Nigeria since then?

Now, in Beijing, the High official of the African Department in the Chinese cabinet, Zhou Pingjian, said the visit of Chinese president in March this year to three African countries “signals the new thinking by China on greater mutually beneficial cooperation with Africa”.

Making reference to the $500 million loan concession secured by Nigeria during President Jonathan’s visit last month, he said, “It is the start of more good things to come. We are now to follow through on our agreements… Since 2000, in the working of Forum of China- Africa Cooperation (FOCAC), the first visit made by President Xi Jinping outside China on his assumption of office in March was to Africa. We share extensive common interest. Today trustworthy friends and sincere partnership forever is what we desire in the new age. China would intensify and not weaken its relations with Africa”.

Preparing the grounds for the Chinese minister’s comments earlier, chief executives of China’s oil corporations had in response to questions by journalists from Nigeria, stated the willingness to cooperate with the Nigerian government to bring Chinese expertise into the Nigerian oil industry.

They particularly signified readiness to go into partnership with Nigerian National Petroleum Corporation (NNPC) if possible to help in refining Nigeria’s crude oil. China Oil Petrochemical CINOPEC Zhang Shagauog made the first disclosure during a briefing at Zibo in Shandom province.

Interestingly, Qilu Petrochemical Corporation, a subsidiary enterprise of China Petrochemical Corporation is a super large refining, chemical fertilizer/fiber global supplying manufacturer integrated with petroleum, salt, coal, natural gas. Nigeria can set up her own petroleum corporation along similar working lines. One way to do this may be by building on the corporation’s administrative vice president, Wang Hongliang’s disclosure of the company’s readiness to train Nigerian oil workers and supply requisite equipment for the purpose of crude oil refining.

In the face of epileptic electricity supply and a collapsing power infrastructure in Nigeria, the issue of using nuclear power for sustenance of vital sectors of the Nigerian economy gains all the more ascendancy wherever there are any serious bilateral talks between Federal Government officials and their counterparts from elsewhere.

A look at how the Huaneng Xindian International Power Plant Corporation in Zibo works, point to the fact that operatives and researchers here are already thinking ahead of the times. It is the largest power plant in China with over 600 million kilowatts capacity, it uses oil and petrol as raw materials apart from water and since 2001 coal is now being used, even though a new research into the possibility of using wind, nuclear, gas technology to move into next level is currently going on. There are five major electricity suppliers in China. Outages are virtually unknown in China and electricity per households put at 0.5 Yuan is by far cheaper when compared to Nigeria. 5,000 tons of coal is needed everyday. But coal is said to be going down because of growing economy and demands. And sadly, the facility tour found that China gets coal from Malaysia and Australia. In the refocused strategic relations, Nigeria should be supplying China coal!

Nigeria also needs to follow up on old deals, including what unfolded in August last year when after intense but off-camera moves by the country’s diplomatic machinery, Nigeria positioned herself for eligibility in the $206 billion (about N32.96 trillion) infrastructural development fund that was then proposed by the Chinese government for investment in Africa.

The sum, over which many interests across the continent were generated, was meant to cover economy –growing strides in the power, energy, agriculture as well as urban and rural development sectors.

Formal negotiations for Nigeria’s eligibility in accessing the fund were tied up by the Minister of Foreign Affairs, Ambassador Olugbenga Ashiru, on the margins of the recently concluded 5th ministerial conference on China-Africa Co-operation (FOCAC) in Beijing. Notwithstanding the internal security challenges, Nigeria is still the biggest destination of Foreign Direct Investments from China. As captured by the 2012 World Investment Report of the United Nations Conference on Trade and Development (UNCTAD), Nigeria also emerged as Africa’s biggest destination for FDI in 2011 securing $8.92 billion of the FDI flow.

On what should be the way forward for Cino-Nigeria relations in the emerging investment climate, international relations analyst, Dr. Nwangwu Okeimiri said both countries should also now re-work and reconstitute their bi-national joint commission even though China has been told in clear terms that it must revisit its immigration laws, touted to be in need of greater flexibility such that consular problems would not continue to be an irritant of bilateral relations of both countries.

He noted further: “High level contacts are identifying the issues to resolve them. Trade imbalance and individual attitudes, both sides have to take seriously. The surest way is for the governments to play their role, the market, the corporations have to play theirs”.

Diplomatic watchers think that what is happening now ought to ride on the back of a renewed commitment to fulfill existing pledges made some three years ago under the Forum for China-Africa Cooperation (FOCAC) which came after the Nigerian team conferred with the Chinese Vice Premier, Li Keqiang at the Great Hall.

But besides the People’s Republic of China, Nigeria recently reviewed and re-negotiated several bilateral agreements with many countries (India, Turkey, Switzerland, Belgium, Australia, Canada, the United Arab Emirates etc) to reflect its economic diplomacy priorities. These are in the area of Joint Commissions, Investment Promotion and Protection Agreements (IPPAs), Bilateral Air Services Agreements (BASA), avoidance of double taxation, science and technology, agricultural cooperation, energy and power, solid minerals, education, culture and tourism.

Now that the new path has been hewn, treading it may mean the evolution of a workable development model to turn the bilateral cooperation into fruits in the baskets of citizens.