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A reminiscence on China’s strategic cooperation for development in Nigeria

By Magnus Uchendu
27 December 2021   |   1:55 pm
Nigeria and China have come a long way. It is safe to conclude that the two countries are on an enduring relationship that is daily blossoming and growing to a huge bilateral synergy built on strong mutual benefits. China’s investment in Africa and by extension Nigeria is phenomenal and has over time progressively transformed into…

FILE: Chinese PresidentXi Jinping(R) holds talks with Nigerian President Muhammadu Buhari in Beijing, capital of China on April 12, 2016. (Xinhua/Rao Aimin)

Nigeria and China have come a long way. It is safe to conclude that the two countries are on an enduring relationship that is daily blossoming and growing to a huge bilateral synergy built on strong mutual benefits. China’s investment in Africa and by extension Nigeria is phenomenal and has over time progressively transformed into Africa’s largest trading partner surpassing traditional partners such as Europe and the United States of America.

Perhaps not many developed countries of the world will be ready to play the big role that China is currently playing in Africa to develop infrastructural projects that will liberate the continent from the clutches of acute poverty due to a lack of basic infrastructures. Nigeria, the most populous nation in Africa is a major beneficiary of some of these initiatives through ambitious infrastructural projects that are springing up across the country.

Chinese investments in Nigeria are substantial. According to a 2019 report issued by the Chinese embassy, Nigeria hosts 70 construction, 40 investments and 30 trading Chinese companies. In 2018 alone, Chinese companies were awarded 175 construction contracts in Nigeria, worth $17 billion USD, some of these projects directly employed a significant number of young Nigerians. Thus, since the establishment of diplomatic ties in 1971 and strategic partnership in 2005 between China and Nigeria, the relationship between the two countries have maintained a sound momentum of development.

During the Forum on China-Africa Cooperation (FOCAC) Beijing Summit in 2018, China, and Nigeria signed a Memorandum of Understanding (MoU) on jointly building the Belt and Road Initiative (BRI), which promoted the friendship between the two countries to the best period in history. Thus, the year 2019 was the first year that Nigeria formally joined the big family of the BRI, which means that China is ready to work with Nigeria to explore new opportunities for cooperation in various fields.

Nigeria has benefited from a number of BRI projects. Notable ones include the Abuja/Kaduna Standard Gauge Rail Line linking the nation’s capital Abuja to Kaduna, a trade centre and transportation hub in north-western Nigeria, the Lagos/Ibadan Standard Gauge Rail Line linking Lagos, Nigeria’s economic capital to Ibadan, the former administrative capital of southwestern Nigeria, and the Lagos/Kano railway, which is an ambitious project connecting the two most populous cities in southern and northern Nigeria. Others include new international airport terminals in Abuja, Port Harcourt in the oil-rich Niger Delta region and the ancient city of Kano.

At this juncture, it is instructive to note that modern infrastructure availability is one of the indicators of advancement of any society today. It is the blood that keeps any modern society and economy alive, and this ranges from roads, bridges, airports, seaports, railways, power plants, dams, telecommunication facilities and many more. Indeed, the level, quality and standard of the infrastructure of a country is a core indicator of its rating in development or advancement.

One major area of the Chinese strategic relationship with Nigeria is the building of rail infrastructure which is gradually positioning Nigeria as a modern economy with infrastructural underpinning. In this stead, in recent years, the China Civil Engineering Construction Company (CCECC) has delivered four major railway projects after completion, all with a total stretch of 712km, a huge economic value that has been added to the country. The China Civil Engineering Construction Corporation (CCECC) has proven over time to be a reliable supporter of infrastructure upgrade and creation for the economy of Nigeria.

In December 2020, the latest of China’s many industrial investments in Nigeria, the railway line between Lagos and Ibadan, became operational. Running 156 kilometres long and costs some $1.5 billion US dollars. Its opening was accompanied by public fanfare in Nigeria and China, where it was seen as another double victory for Chinese-led development, and China’s public image in sub-Saharan Africa.

Over the past two decades, China’s investment in Nigerian industries, and especially transport, has offered Nigeria access to capital and expertise for badly needed development, at levels unseen since colonial Britain built African railways. Similarly, China Civil Engineering Construction Corporation (CCEC) has broken ground on the construction of the first phase of the Lagos Rail Mass Transit (LRMT) Red Line project in Lagos, Nigeria. The LRMT Red Line, classified as a Belt and Road Initiative (BRI) project, involves the construction of a 28-km mass transit system at an estimated cost of $680 million, according to Refinitiv’s Infrastructure 360 database. The project will interconnect with the existing Lagos State Bus Terminal and the Lagos-Ibadan Railway Station as well as the Airport. The LRMT Red Line project is the second light rail project that CCECC has implemented in Lagos State, after the LRMT Blue Line project, and is expected to relieve the traffic congestion and improve transportation efficiency in the nation’s economic capital.

Nigeria is the first African country to be designated a “strategic partner” by China. “Most of China’s strategic partners are in Asia, where almost all China’s neighbours (with the notable exception of Japan) are designated as partners of some sort.” The bilateral relationship between Nigeria and China has ramped up trade from $1.9 billion US dollars in 2013 to about $20 billion USD. A 2020 policy brief by Yunnan Chen, a John Hopkins School of Advanced International Studies (SAIS) researcher, states that “China’s Ministry of Commerce, identified 218 Chinese firms registered in Nigeria, with 128 in manufacturing” as of 2015.

Likewise, in the face of economic globalization with the support of both Chinese and Nigerian Governments, Lekki Free Zone (LFZ), a Sino-Nigeria, joint company is being developed as a model of cooperation between the two countries for the purpose of mutual benefits and the bilateral relationship. With a planned area of 30 km located in Lekki Peninsula to the south-east of Lagos State, Nigeria, LFZ was launched following the execution of a Tripartite Agreement in early 2006 between China-Africa Lekki Investment Ltd, Lagos State Government and Lekki Worldwide Investments Ltd. Subsequently, pursuant to the provisions of the Tripartite Agreement, Lekki Free Zone Development Company FZC (LFZDC) was incorporated and established in Nigeria in May 2006 as a China-Nigeria joint venture exclusively for investment, development, management and operation of LFZ. In November 2007, LFZ was officially approved by the Chinese Ministry of Commerce and regarded as one of the “Overseas Economic & Trade Cooperation Zones” by the Chinese government.

Truth is that, apart from what is already on the ground, the two countries have huge potential for investment cooperation, which is highly complementary, especially in the field of energy, resources, and infrastructure. There is a need to develop and tap this cooperation’s potential.

Also, Nigeria and China need to broaden cultural, and people-to-people exchanges to deepen their traditional friendship. The duo needs to take into consideration the growing enthusiasm of their people for interactions; encourage friendly exchanges in education, culture, health, science and technology, media and other fields, and increase local people-to-people exchanges to cement the social foundation for China-Nigeria friendship. Consequently, China and Nigeria must make full use of the platforms of BRI and FOCAC to increase mutual visits by central and local governments, art troupes and academic groups as well as other exchanges at all levels and in all fields.