‘Nigeria has become one of the top five African countries with a huge record of Chinese investment.’
Nigeria, though the largest and most populous African country, is bedevilled with widespread poverty, as evidenced by the 2022 multidimensional poverty index data, which confirm that around 133 million – 63 per cent – of Nigeria’s 200 million population are multidimensionally poor.
Apart from poverty, other challenges bedevilling the nation include burgeoning unemployment, poor governance, weak and ineffective institutions, inadequate infrastructure, a lack of transparency, and rent-seeking. These, in addition to aggravating the conflict perpetrated by the Boko Haram insurgency, unknown gunmen, militancy, and separatist agitations make development difficult.
A decade after Nigeria obtained independence from Great Britain, formal bilateral relations were established with the People’s Republic of China on 10 February 1971. The development of bilateral commerce and strategic partnerships has led to an improvement in the relationship between Nigeria and China as the latter is a significant investor and a viable option for other bilateral lenders, including the World Bank, the International Monetary Fund (IMF), and other sources of development financing.
Trade between Nigeria and China expanded from approximately $1.2 billion in 2003 to $13.7 billion in 2019. Additionally, while Nigeria’s commerce with the United States decreased from $11.5 billion to $7.5 billion, Chinese investments in Nigeria climbed from $24.4 million to $123.27 million during the same period (2003 – 2019). Hence, Nigeria has become one of the top five African countries with a huge record of Chinese investment.
Nigeria–China relations have been shaped by various factors including economic and political considerations. One key aspect of these relations has been the Belt and Road Initiative (BRI), a major infrastructure development project proposed by China that aims to boost connectivity and trade across Asia, Europe, and Africa. The initiative includes a range of infrastructure projects such as roads, railways, ports, and other facilities, as well as policy and financial support from the Chinese government.
For instance, the major gas pipeline and railways in Nigeria, as well as projects in Uganda, Ethiopia, Egypt, and many other nations, were sponsored by Chinese banks. To increase connectivity and economic integration among participating nations, the BRI was designed to make it easier to build new infrastructure and expand current facilities. Additionally, it aims to increase China’s political and economic influence while fostering economic growth and collaboration among participating nations.
The BRI has also been referred to as ‘One Belt, One Road’ in the past. China’s President, Xi Jinping came up with the term in 2013, drawing inspiration from the idea of the Silk Road, a network of trade routes that connected China to the Mediterranean across Eurasia for centuries beginning 2,000 years ago. The BRI includes a 21st-century Maritime Silk Road, a sea route linking China’s coastal regions with south-east and South Asia, the South Pacific, the Middle East, and Eastern Africa, all the way to Europe.
Since its inception, the BRI has been the focus of extensive discussions and debates. While some contend that the project has the potential to have a substantial positive economic impact on member nations, others have expressed concerns regarding the possible costs and risks involved, particularly debt risk, environmental impacts, and loss of sovereignty. Some critics believe that the BRI might not be in line with Nigeria’s development aspirations and that it might lead to an unfairly lopsided economic relationship with China.
It is pertinent, therefore, to carefully evaluate the potential costs and benefits of the BRI to Nigeria and consider the long-term implications of these investments. This requires an in-depth analysis of the specific terms and conditions of BRI projects as well as an assessment of their potential impacts on various stakeholders.
‘Some critics believe that the BRI might not be in line with Nigeria’s development aspirations and that it might lead to an unfairly lopsided economic relationship with China.’
Economic Benefits of the BRI
Economic development: Through increased infrastructure investment, commerce, and access to new markets, the BRI may help Nigeria’s economy to expand and thrive. For instance, the BRI may support the building of new highways, ports, and other infrastructure initiatives that could enhance connectivity and support business activities in Nigeria and elsewhere.
Investment opportunities: The BRI may also present opportunities for Chinese businesses to invest in Nigeria, which may result in the creation of new jobs and business prospects. This might be especially advantageous for industries such as manufacturing, transportation, and construction, which may experience increased demand as a result of BRI-related initiatives.
Improved regional connectivity: Nigeria may be able to integrate more effectively with global supply networks and markets because of the BRI’s ability to improve regional connectivity within Africa and beyond. This may be particularly beneficial for exports and the economy of Nigeria as a whole.
Economic Costs of the BRI
Debt risks: Concerns about the possibility that BRI projects could leave Nigeria with unmanageable debt levels have been highlighted in certain studies. This can occur if the conditions of BRI projects are adverse to Nigeria, or if the projects’ economic returns are insufficient to cover their expenses.
Environmental impacts: BRI projects in Nigeria might also affect the environment, including the risk of pollution, deterioration of natural resources, and loss of biodiversity. To ensure that BRI projects are sustainable and do not cause long-term environmental harm, it is crucial to thoroughly examine and resolve their implications.
Loss of sovereignty: Some critics have expressed fear that Nigeria may lose its sovereignty as a result of the BRI, claiming that the terms of the projects may not be in Nigeria’s best interests, and could lead to an unfair economic relationship with China.
Lack of alignment with development priorities: Another possibility is that the BRI initiatives in Nigeria may not be in line with the nation’s development priorities, leading to investments that are ineffective at resolving pressing issues or fostering long-term progress.
Trap diplomacy: It is alleged that China engages in ‘debt trap diplomacy’, which involves sponsoring significant infrastructure projects in developing countries with unsustainable loans and then exploiting the debt to exert influence over those governments.
In the final analysis, it is important to note that the potential advantages are not guaranteed but depend on the specific terms and conditions of BRI projects as well as broader economic and political conditions. Meanwhile, the disadvantages can be addressed to ensure that the benefits of the BRI are maximised and any negative impacts are minimised. This notwithstanding, the ultimate poser remains: how does the merit compare to the ills? ♦️