After an over-enthusiastic first fling China’s commercial overtures 
to Africa’s rising economic giant are running into difficulties in many sectors

Two showpiece contracts of the Nigerian-Chinese relationship have gone spectacularly awry in the last few months but, in time, no doubt these will be put down to teething problems of a new trading partnership that has taken firm root and is beginning to blossom.


The first bombshell came in October when the Nigerian government suspended and then terminated an $8.3bn contract with the China Railway Construction Company (CRCC) for the modernisation of Nigeria’s dilapidated North-South railway system.


Fate then intervened on 10 November, when Nigeria’s first-ever communications satellite, NigComSat-1 – which had been launched with much fanfare by China in May 2007 at a cost of $257m – suffered a sudden solar panel failure and electrical breakdown.

Out of orbit


Nigeria’s prestige and national pride are at stake in the satellite project and so the government of President Umaru Yar’Adua could yet be persuaded to move ahead with the planned launch of two more satellites at a cost of a further $500m. But, cautious as ever, the government has not rushed to approve the disbursing of the appropriate concessionary loan from China Exim Bank.


The Yar’Adua administration’s wariness of taking on large debts to China is understandable given its concern that the cancelled rail project – which had been forced through by the government of ex-President Olusegun Obasanjo days before the November 2006 China-Africa Summit in Beijing – did not meet basic standards of due diligence.


The sheer haste with which the rail contract was awarded illustrates the extent to which some Chinese firms – convinced that they had the sustained support of both governments – were ready to risk getting their fingers burned. In earlier negotiations with international finance institutions over the railway project, the IMF is said to have asked for documents the size of a New York telephone directory. But when the CRCC came in, within a fortnight it had negotiated the very same project in its entirety.


With Nigeria’s banks rather than its government now putting out the welcome mat, the Chinese are busier than ever. Leading the way on the Nigerian side, First Bank has signed a $2.4bn joint venture with China’s Shenzhen Energy Group (CSEG) to build a 3,000 MW power plant and an agreement on a $500m free trade zone in Ogun State. First Bank also has deals with textile manufacturer Yuemei Group and China Construction Bank. Another leading Nigerian bank recently advertised for Mandarin-speaking marketeers to target more Chinese businesses.


Tricks of the trade


Ngozi Okonjo-Iweala, the former Nigerian finance minister now at the World Bank, thinks Nigeria can learn some tricks from Chinese businesses. She said: “China knows poverty first hand and has evolved a successful wealth-creation formula that it is willing to share with African nations, Nigeria included.”


With over 40 companies now wholly-owned or in partnership with Nigerians, China’s business expansion in Nigeria has been spectacular. Its firms have built the multi-billion dollar Sportsmen Hostel of the National Stadium in Abuja, the Nigerian Telecommunications Commission headquarters, an important link road in Lagos and have the contract to repair the Apapa-Oshodi Expressway. China Exim Bank has been involved in financing Nigerian power stations like Omotosho and Geregu. China National Offshore Oil Company has an offshore oil production stake valued at $2.3bn.


One of the rites of passage for foreign investors in Nigeria is having their expatriates kidnapped. After Chinese construction workers were hijacked recently in Anambra State, analyst Jegede Kayode, told The Africa Report: “The kidnapping doesn’t signify a backlash against Chinese interests; expats are generally being kidnapped daily in that region of Nigeria.” Kayode runs Afrobridge Consulting, which brokers business between Nigeria and China. “In 18 months I have doubled my staff strength both in Nigeria and in Beijing,” he said.


One of the most high-profile Chinese entrepreneurs in Nigeria is Pamela Wu, who has fully accepted Nigeria’s ‘bring your own infrastructure’ business environment and has thrived in a difficult climate to build up Big Treat Plc, Nigeria’s largest confectionery group. She combines business with rounds of golf at the prestigious Ikeja Golf Club.


The numbers of Chinese resident in Nigeria are a matter of conjecture, but are thought by analysts to have risen from only 6,000 in 1992 to at least 75,000 now. An official at Nigerian Immigration Services told The Africa Report: “We have heard stories of some Chinese illegals living inside their factories and never coming out, but we are on alert.” And the illegal immigration flows both ways. Guo Kun, China’s consul-general in Lagos recently said his visa section was having a tough time verifying documents because “Nigerian businessmen put forward bogus letters of invitation for business” in China.


From pak choi 
to pullovers


Chinese are heavily represented in the retail sector. Etudor Akpan, a manager at a Chinese restaurant in Apapa, Lagos, said: “In the last six months I have sourced workers for at least four new Chinese restaurants opening in Apapa alone. These people mean business here in Nigeria.” At Gatankowa Fairly Used Goods Market in Abule-Egba, a few kilometres outside Lagos, Chinese traders sell used textiles on the road. In the Ojota area of Lagos, there is a Chinatown market built in the traditional Chinese style; it was shut down last year because Nigerian custom officials alleged that the Chinese were smuggling goods into the country, but this was resolved amicably and more such sites are planned across the country.


At a factory in the Adeniyi-Jones area of Ikeja industrial estate in Lagos, a Chinese manufacturing firm, Amigo Hair Attachment Products, was found to have employed hundreds of Nigerian under-age children in a new sweatshop labour racket. And the Nigerian National Agency for Food and Drug Administration Control recently sealed up a Chinese dairy company in Lagos which had imported the unsafe baby milk that had killed babies in China.