AS CHINESE PRESDENT VISITS NIGERIA

Chinese president Mr. Hu Jing Tao addressed a joint section of the Nigerian national assembly on Thursday, the 27th day of April 2006. This is part of activities lined us for his two day states visit to Nigeria, his second in 3 years.
President Hu was on a states visit to Africa, which also took him to Kenya. Earlier on Wednesday president Hu visited Morocco where he signed a number of deals with king Mohammed VI.

Also on Wednesday China signed a deal worth $4 billion for 4 oil-drilling contracts in Nigeria. This is 1 of 7 co-operation agreements signed between Nigeria and China during the visit. Other deals signed between Nigeria and China includes the acquisition of a controlling stake in the Kaduna refinery by China, the construction of a 2500Mw hydroelectric power plant and the building of an ultra-modern railway system in Nigeria.

Nigeria on the other hand hopes to increase non-oil export to China. Trade between Nigeria and China is worth $2.8 billion ,with Nigeria contributing less than $500 million. Nigeria hopes that by increasing non-oil exports, this unfavorable trade imbalance will be over-turned.

These deals cut across the 3 of the 5 sectors in Nigeria that I consider key, if Nigeria will ever reach the promise land, where ever that is. The 3 sectors are the energy sector; the transportation sector and the non-oil export sector, while the other 2 key sectors are the education sector and the health sector.

An ultra-modern railway system in Nigeria will have a positive impact on the Nigerian transport sector.
This is expected to decongest the roads, which currently is the only means of transportation in Nigeria. It could also have some positive impact on the cost of transport, most especially for transportation of goods. The prices of goods, especially agricultural products, differ a great deal between areas were they are produced and other parts of Nigeria. This difference can be as high as 300% and this is often attributed to the high cost of transportation in Nigeria.

Nigeria also requires huge investments in the energy sector. This is why the news of a 2500Mw electricity generating capacity to be built by China is good. More of such investments are still needed in Nigeria in order to improve the economy. Most businesses in Nigeria today run on generators, which increases the cost of goods and services from such business. Currently, I receive an average of about 10 hours power supply in my home, this is an improvement from the average of 3 to 4 hours I used to receive at the beginning of the year. There is huge demand for electricity in Nigeria, unofficial figures shows that last year Nigerians spent over 250 billion naira about $2billion on generator importation.

Any investment in the petroleum refining capacity in Nigeria is commendable. This will impact on the cost of transportation in Nigeria and reduce the cost of business. The cost of preparing meals in Nigeria will also be reduced, as most Nigerians cook with kerosene.

The benefits of these deals will only be felt if the investment is channeled appropriately. Past experience of Chinese investment in Nigeria leaves a lot to be desired. During the military junta led by General Sani Abacha, such deals where signed to improve the railway system in Nigeria. Uptil now nothing has been seen on the ground.The problem with investments from China is that it is not monitored and hence does not impact on the citizens of the country.

In addition goods from China are often substandard and poses a treat to the life of people. According to regulatory authorities in Nigeria, most especially NAFDAC and SON, most imports from China are fake and substandard.Also Chinese investors in Nigeria engage in sharp practices. These include not paying taxes, faking other well known products, copying CDs, underpaying their workers forcing there employees to work longer hours and so on.

However cheap goods from China remain the saving grace of most Nigerians. The so called “GSM revolution” and the nollywood boom” would not have been possible without the importation of cheap GSM phones, Television, VCD players, and VCD from China.