Sino-Nigeria Relationship: The Gains, Loses
Sun, Feb 3, 2013
  • By Chris Uba
  • Published in Business World: July 12th, 2009
NIGERIA and China established diplomatic relations on February 10, 1971. Since that time, many Chinese leaders have visited Nigeria just as so many leaders of Nigeria have visited China; bilateral relations between the two countries have since enjoyed smooth and steady development.

Since May 1999 after Nigeria returned to constitutional democracy, former President Olusegun Obasanjo visited China twice, in 2001 and 2005 with his Chinese counterpart reciprocating both visits. Many high level visits have taken place between ministers and top officials of both nations. China and Nigeria have signed a number of agreements on trade, economic and technical cooperation, scientific and technological cooperation, as well as an agreement on investment protection.

The two countries set up a joint economic and trade commission. During the first four months of 2004, the volume of trade grew further by 17.6 per cent to $609 million, with Nigeria's export to China registering a growth of 330 per cent. China's main exports to Nigeria are light industrial, mechanical and electrical products. China’s mainly imports from Nigeria are petroleum, timber and cotton.  Some of the agreements are as follows:

1. During President Obasanjo's 2001 visit, both leaders signed Agreements on Trade, Investment Promotion and Protection. Supporting agreements on sincere friendship, mutual trust, mutual economic benefit and common development, and enhanced consultation and mutual support were also signed.

2. In April 2002, the two governments signed the Agreement between the government of the People's Republic of China and the Government of the Federal Republic of Nigeria for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.

3. In July of the same year, they signed the Agreement on Consular Affairs; the Agreement on Cooperation on Strengthening Management of Narcotic Drugs, Psychotropic Substances and Diversion of Precursor Chemical; and the Agreement on Tourism Cooperation.

4. Both nations agreed to establish a strategic partnership featuring mutual political trust, mutual economic benefit and mutual support in international affairs in 2005.

5. Nigeria and People's Republic of China on 13 October 2005 signed a contract agreement for the construction of water schemes for 19 states and the Federal Capital Territory (FCT) at the cost of N695 million.

6. During President Hu Jintao's visit to Nigeria in April 2006, Nigeria and China signed four Agreements and three Memoranda of understanding (MOUs) on a range of programmes to enhance their economic ties, including

Others include the financing agreement of N8.36 billion ($500 million) concessionary export grants to support the development of infrastructure by China Export Import Bank; the provision of about N670 million (40 million Chinese Yuan) for the training of 50 Nigerian officials and medical personnel on comprehensive malaria prevention and control; The supply of anti-malaria drugs worth N83.6 million (5 million Chinese Yuan) in support of the Roll-Back-Malaria programme;an agreement centred to set up a team of experts for the Nigeria-China friendship cultural project and a  memorandum of understanding on the provision of National Information Communication Technology Infrastructure Backbone between the Federal Ministry of Science and Technology and Huwaei Technologies.

Till now, China has set up more than 30 solely funded companies and joint ventures in Nigeria. The main projects contracted or undertaken in the form of labour service by Chinese companies in Nigeria are the rehabilitation of Nigerian railway, the Games Village of Abuja Sports Complex. Major Chinese companies which have undertaken projects in Nigeria are China Geological Engineering Company, China Harbour Engineering Company (Group) and China Civil Engineering Construction Corporation.

China is also involved in construction, oil and gas, technology, service and education sectors of the Nigerian economy. The trade volume between the two countries in 2003 reached $1.86 billion, representing a 59 per cent growth. The volume of trade between Nigeria and China increased from $178 million (US) in 1996 to $1.144 billion (US) in December 2001. According to the Economic and Commercial Office of the Chinese Embassy in Nigeria, the total volume of bilateral trade between China and Nigeria was US$ 570 million in 1999, and the figure went up to US$ 860 million in the year 2000 and   $1.billion as at 2007.

China is now one of Nigeria's top ten trading partners with Chinese businessmen showing increasing interests in investing in Nigeria. Nigeria, under President Obasanjo agreed to sell China 50,000 barrels per day (BPD) of crude oil. China also signed contracts worth over N4 billion with Nigeria on a concessional basis to explore at least four oil blocks in the country and repair the Kaduna refinery. China's investments in the oil sector will result in the building of a power generation station that would add some substantial megawatts of electricity to Nigeria's power sector.

As part of efforts to help Nigeria diversify her economy, China increased its volume of agricultural imports from Nigeria. Already 80,000 tonnes of cassava chips have reached China. Nigeria has already received another order from China to supply another 102,000 tonnes in the next 10 months. China is also buying sesame seed from Nigeria and has indicated her willingness to buy more agricultural produce if Nigeria can supply. There are currently over 400 Chinese agricultural experts in Nigeria involved in the construction of small earth dams.

Nigeria has become the third trading partner of China in Africa after South Africa and Egypt. Now the value of bilateral trade between China and Nigeria accounts for more than 14 percent that of trade between China and Africa as a whole.


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