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Doubts, queries over China’s interest in Nigeria’s telecom sector

By Sodiq Omolaoye, Abuja
01 March 2022   |   11:26 am
In recent years, Nigeria has received relatively sizable funding from China for infrastructure development, especially for the construction of railways. In late June 2018, the Nigerian government announced that Chinese companies have invested a staggering $16 billion in Nigeria's telecommunication industry. By September same year, the government also agreed to a $328 million loan from…
Nigeria-Telecoms

Telecoms

In recent years, Nigeria has received relatively sizable funding from China for infrastructure development, especially for the construction of railways.

In late June 2018, the Nigerian government announced that Chinese companies have invested a staggering $16 billion in Nigeria’s telecommunication industry.

By September same year, the government also agreed to a $328 million loan from Chinese state bank Exim to upgrade Nigeria’s telecoms infrastructure.

The agreement was signed between China’s EXIM Bank and the Galaxy Backbone (a telecommunications company in Nigeria, with Huawei working on the project.

President Muhammadu Buhari’s administration said the loan represents “the current administration’s commitment to incorporating the development of information and communications technology into national strategic planning”. This is a demonstration of China’s direct interest in the tech ecosystem of Nigeria.

Chinese companies and Nigeria
Nigeria is said to be the largest African economy and one of the fastest-growing markets on the continent. From the 1990s “Going Out” period, Chinese companies such as Huawei and ZTE have rapidly grown their presence on the African continent, with experts linking the growth to the cheaper products and services offered by the companies.

However, observers noted that China’s penetration into Africa should be seen within the context of its Digital Silk Road (DSR) programme, which it launched in 2015. The DSR was said to be introduced in 2015 by an official Chinese government white paper, as a component of Beijing’s Belt and Road Initiative (BRI).

The programme delivers digital infrastructure, including fibreoptic cables, data centres and indeed next-generation cellular networks, to partner countries. A report in 2018 disclosed that DSR-related investments in digital infrastructure projects outside of China had reached $79 billion.

Interestingly, Nigeria, Zambia, Angola, Ethiopia and Zimbabwe have benefited from the project, with an estimated investment value totalling $8.43bn. According to a 2018 study conducted by the Infrastructure Consortium for Africa, after African governments, China was the continent’s second-largest source of infrastructure financing, committing $25.7bn to African countries that year.

Also, about 50 percent of Africa’s 3G networks and 70 percent of its 4G networks are built by Huawei, the world’s leading seller of 5G technology and smartphones, a 2021 April Report by the Atlantic Council’s Africa Center disclosed.

According to projections, Nigeria, together with China, India, Indonesia, and Pakistan, will contribute half of the 1.6 billion mobile internet users by 2025.

ICT expert, Ahmad Galadima said Nigeria is very attractive to investors as Africa’s most populous country.

According to him, the success of MTN, Airtel and 9mobile has shown that Nigeria is the biggest market in terms of telecom in Africa. “The huge internet penetration of Nigeria creates a huge potential for businesses.’ he stated.

Since launching business operations in Nigeria in 1999, Huawei has invested about US$76 million within the country. The company has also been selected by the Nigerian government as a core partner in building smart cities and e-government applications to “reshape the way public services are provided and managed” within the country.

“China has developed its technology economy as well as industry. It is looking for other markets outside the country. China invests heavily in many so areas. For China to invest such hugely in Nigeria, it doesn’t mean it does not know what it does, it is a great opportunity,” the Director, Institute of Legislative Studies, University of Abuja, Prof. Sheriff Ghali Ibrahim said.

Ibrahim observed that China’s Investment in Nigeria was a result of the country being the largest technology in Africa and having an information telecommunication infrastructure deficit.

In addition, Huawei, through its acclaimed Seeds for the Future global Corporate Social Responsibility program, trained more than 600 students in 14 sub-Saharan countries covering emerging ICT technologies such as 5G, cloud computing, and AI.

The programme which was launched in 2008 was aimed to help nurture local talent, promote knowledge transfer, increase people’s understanding and interest in the ICT industry, and encourage countries and regions to participate in digital community building.

In 2017, about ten Nigerian students were sponsored to China by Huawei to major in ICT-related studies and practical ICT insights.

The students were said to be selected from those who signed to the Huawei Authorised Information and Network Academy (HAINA) or Huawei ICT Academy, including students from the University of Lagos, the University of Benin and the University of Nsukka, Nigeria.

“The programme seeks to develop local ICT talent, enhance knowledge transfer, promote a greater understanding of, and interest in the ICT sector, and to improve and encourage regional building and participation in the digital economy,” Channel Service Director of Huawei Technologies Company Nigeria Limited, Mr Simon Zhang said.

Generally, by 2021, the program has been implemented in 131 countries and territories worldwide, with nearly 9,000 students participating. Since 2014, the program has been held in sub-Saharan African countries. So far, 25 countries in Africa, including Nigeria, South Africa, Kenya, and Ghana, have participated in the training, which has so far benefitted more than 1,000 students.

However, experts argued that although Chinese companies’ involvement in Nigeria appears to have benefited the companies, the Chinese government also appears to have benefited from this involvement.

For instance, given that companies like Huawei’s corporate structure subject it to international market pressure which may serve as a barrier to limit the extent of Chinese government influence, however, whether intentional or otherwise, there are nonetheless numerous examples on how the Chinese state has benefited from Huawei’s extensive involvement in Nigeria.

But at the heart of the investments, are concerns that Chinese companies could leverage upon surveillance mechanisms through the use of big data and thus create additional security externalities for the Chinese government.

Implications of China’s massive investments in Nigeria’s telecom sector
The U.S government and some of its European allies have long raised concerns about how China companies, especially Huawei and its equipment could be used by Chinese authorities to spy on the countries that install it. This is an allegation Huawei has repeatedly denied.

Although the suspicion might have arisen due to the trade war between US and China, observers believe the rivalry risks dividing the world with a digital iron curtain. For instance, U.S allies including New Zealand and Australia had banned Huawei and ZTE from providing equipment for 5G wireless technology citing national security, Canada had one time arrested Huawei Chief Financial Officer Meng Wanzhou on allegations she defrauded banks to violate Iranian sanctions.

Taiwan had also alerted that China’s Beidou Satellite System constitutes an information security risk to the country.

It alleged that the satellite is able to ‘track smartphone users via embedded malware in devices with Chinese-manufactured chips directly tied into the system or phones manufactured in China.’

The ministry further reported that China’s satellite system, “despite claims of being commercial in nature, was primarily for military use, adding that over the past few years, many smartphone vehicle navigation products using Beidou Satellite System guidance chips have been imported to Taiwan.”

But it seems the US and Europe’s concerns that Huawei’s equipment can be used for espionage on their governments and citizens do not seem as pressing a concern for Nigeria.

However, this is likely to have implications, especially in the realm of digital surveillance. Experts have argued that the spread of data centres run by Chinese companies in Nigeria could indeed leverage surveillance mechanisms through the use of big data and thus create additional security externalities for the Chinese state.

According to them, Data centres serve as platforms from which governments collect data to monitor individuals in real-time.

Meanwhile, there are insinuations that Chinese commercial actors involved in Huawei’s construction of digital infrastructure in Nigeria already share data with the Chinese government. The African Union had on-time alleged that over a period of five years, data was being transferred on a daily basis from its Huawei and ZTE- supplied computer systems to servers located in Shanghai.

Another notable implication is in the area of control of internet access. According to China Internet Security Law, within China, it is compulsory for Chinese firms to assist the Chinese government in identifying Internet users with their real identities. This is part of a wider objective of “national defence, social peace and the protection of infrastructure.”

Observers noted that Chinese censorship practices, such as keyword filters, can even be easily propagated and implemented through cooperation between foreign governments and Chinese technology companies abroad.

Indeed, the Nigerian government alleged interest in the import of the “Great Firewall” is an example in this regard.

In June 2021, the Nigerian government banned Twitter after the tech company removed a tweet from Nigerian President Muhammadu Buhari’s account.

It was subsequently alleged that the Nigerian government officials had met representatives from the Cyberspace Administration of China to discuss how China’s “Great Firewall” could be implemented in Nigeria. Observers said Nigeria towing this part is echoing a worrisome trend in Africa

Should Nigeria be worried?
When contacted, Boye Adegoke of Paradigm Initiative Nigeria (PIN) said the Nigerian government and citizens should be worried about China’s massive investment in Nigeria’s telecommunication sector.

According to him, looking at China’s disposition to the internet, China is not a supporter of an open internet.

“China pushes for a closed internet which is what they are practising in their own country. There is nobody that is bringing something into a country without an underlying self-interest. Looking at what is happening in the global political space, that struggle for hegemony is being reloaded by China.

“Over the years China has maintained that world leadership thing. With respect to the internet, the US was the pioneer and has occupied that hegemonic space over the years and China has been challenging that significantly and trying to compete with the US. Apart from that China has been trying to market its own model of the internet.

“So when such investments are made there are a lot of interests involved. These interests might be business, political or regional political interest, in terms of trying to dominate a particular people.”

On if such investment was a form of recolonisation, Adegoke, who is the manager of Digital Rights Initiative and Intervention projects in affirmation said there is a scramble for the Nigeria market by developed countries.

According to him, what Nigerians should be interested in is the component of such investments.
“Are we just collecting the money? Who is doing the due diligence to ensure that we are not spending the future of Nigeria and that we are not giving so much away? I think that is where our problems.

“We should be worried especially looking at China’s disposition to the internet. China is not a supporter of an open internet. China pushes for a closed internet which is what they are practising in their own country.
“They try to create a firewall whereby the system is muted from the rest of the world, especially the western world.

He added that the problem of having such kind of investment is that Nigerians are not even sure that they are not conniving with the Nigerian government “because we know our government wants a controlled internet space’.

“The people, therefore, are at the receiving end of this because it will limit our experience. One thing Nigerians are benefitting is that we can explore the internet and have no limitations to where we can get opportunities from because there is access to all of the internet, not some part. Young people should be worried about this.

He said another thing Nigerians should be concerned about is the incompetence on the part of our government.

“That is if it is not the Nigerian government actually conniving with these people, could they potentially be signing things they don’t really understand without doing proper diligence?

“ICT is a broad place. The government may be making business decisions whereas those decisions have a surveillance dimension. That is where the problem lies. Are the decision-makers just been greedy by the opportunity to seal a deal or sign another contract or for political consideration – just to say that they have achieved something, without knowing what is therein,” he queried?

Nigeria can take China to court for any breach noticed
ICT expert, Galadima said Cyber security is something everybody should be worried about. He however noted that Nigeria can approach the court if there is any breach in its ICT networks relating to its agreement with China.

“If they (China) have stealing Nigeria’s data in mind they will keep it to themselves. It is not something up front that we can determine. Cyber security is a world threat that is why they are data regulation. When Nigeria goes into this contract, they will naturally sign such agreements and they will ensure that it doesn’t affect every day Nigeria. If there is a breach established, Nigeria can take China to court.

“The internet world has come to stay. It is not something we can fight. What they are building is the infrastructure. So why not if they can help us build it? There are institutions established to take care of all this. ”

Is Nigeria sacrificing low tech costs for security threats?
Business Director, Services, Computer Warehouse Group, Martins Nwoga, said Nigeria and the rest of Africa were simply looking for cost-effective utilisation of technology, and China, he said was offering that.

According to him, the low cost of China products and cheaper interest rates on the high cost of tech give China the added benefits of being able to quickly penetrate certain countries because the capital outlay is reduced.

“Every manufacturing country in the world look at exporting its products. China has added incentives to export its tech products. Their tech products form a larger per cent of their export,” Nwoga said.

“In the recent past, there has been a trade battle between China and the US where the US has banned and enforced through its European partners a sort of reduction in technology utilisation that exists out of China. The US and allies has portrayed China as using the technology to spy on the rest of the world. That has put a heavy impact on China in terms of their trade deficit with the rest of the world in technology outlay.”

The ICT and telecom expert maintained that Nigeria should not be much worried about security as it is about penetration.

“Nigeria has a very low level of penetration. True the help of NCC, they have been able to penetrate more. We should be concerned about security but not much as that of penetration. We shouldn’t be overly worried about Chinese tech penetration, we should make sure it is tech effective. Nigeria is more of a consumer of tech products.

“It seems that China is heavy Handed. You cannot blame foreign nations for penetration or dominance of your environment if there is no collusion in your own country.”

But for Ibrahim, Nigeria is never a threat to China for the Asian country to look at any cyber-attack on Nigeria.

“Nigeria has not grown to that particular level that China should be worried about attacking it through telecommunication. There is nothing for China to venture into our security digital world. There is nothing for China to benefit from that. It is a matter of interest and economic relationship and China has already gotten that under the Forum of China-Africa Cooperation.

“Nigeria is not a threat China to actually create a kind of digital surveillance system on Nigeria is not as sophisticated. China is looking for a partnership and win-win situation. China wants to boost the productivity of Nigeria’s trade.

Ibrahim also dismissed the allegation that China’s investment in Nigeria and Africa was a form of recolonisation, saying “China is not a colonial power. Its current global power doesn’t mean colonialism’.

This work was produced as a result of a grant provided to the writer by the ‘Countering Foreign Illiberal Influence’ project managed by the Centre for Democracy and Development (CDD).