New deals for prosperity

Nigerian president's visit to China lands host of energy projects among others

Nigerian President Goodluck Jonathan's trip to China last week is being credited with attracting $25 billion in investment to assist his country's rapid development.

Experts said the cooperation, in which several major financial agreements were signed with Beijing, is crucial to Nigeria's drive for a robust economy, but it will also help China to relieve its overcapacity in production and restructure its economy.

Nigerian Minister of Industry, Trade and Investment Olusegun Aganga said the most ambitious deal was a $20 billion Memorandum of Understanding signed between Power China and the Nigerian Ministry of Power, reported the Nigerian newspaper This Day.

The deal to supply electricity is the biggest power agreement the Nigerian government had signed with an international firm, said the minister.

Aganga said Nigeria's Bauchi state had also signed an MoU with China Machinery Engineering Corporation for electricity provision at an estimated cost of $260 million.

This Day reported that other agreements included those between Ladol and China Offshore Oil Engineering Corporation to develop dry-dock facilities in Lagos and Bayelsa states; between China Great Wall and a Nigerian company for manufacturing transformers in Nigeria; and between the Ministry of Aviation and China Civil Engineering Construction Corporation for the construction of international terminals at Nigeria's four major airports.

Aganga described the China mission as Nigeria's most successful because of the large turnout of investors who were willing to do business in the country.

Presidents Xi and Jonathan also officiated at the signing ceremony of five documents after their talks at the Great Hall of the People on July 10.

Among them was an agreement by China Ex-Im Bank to lend $500 million to Nigeria to build airport terminals in Lagos, Abuja, Port Harcourt and Kano. The 20-year loan is at a 2 percent interest rate with a 30 percent local content provision, Nigerian Aviation Minister Stella Oduah told Reuters.

"It's free money, so we're happy," she said.

Another agreement, reported This Day, was between First Bank of Nigeria Plc and China Development Bank to provide $100 million loans to small and medium-sized enterprises in Nigeria.

"Today we have about 17 million SMEs in our country, employing close to 32 million people," Aganga said. "So when we talk about job creation, the real sector to focus on is SMEs."

Nigeria has benefited from low-interest loans that China has granted to African countries in recent years, including more than $700 million to build a hydroelectric plant in Niger state, and $600 million for a light railway in the capital Abuja, Nigerian authorities have said.

President Jonathan was accompanied by 19 top government officials, including part of his cabinet, on the four-day state visit, as he attempted to boost economic ties between the world's second-largest economy and Africa's second-largest one.

Accompanying the ministers were state governors and businesspeople.

The annual trade volume between China and Nigeria has exceeded $13 billion. In 2002, it was only $2 billion.

President Xi said the two countries had been brought together by a common task of pursuing national development.

"As a Nigerian proverb says, 'A man cannot sit down alone to plan for prosperity'," he said.

The presidents vowed to increase cooperation in many areas, including infrastructure construction, energy, agriculture and defense.

"It is in our strategic national interest to have a very good relationship with China," Reuben Abati, special media adviser to Jonathan, said before the visit. "China has shown a lot of interest and support for the president's determination to diversify the nation's economy."

He Wenping, a researcher in African studies at the Chinese Academy of Social Sciences, noted that Jonathan's visit came after he had declared a state of emergency in three states in northern Nigeria due to terrorist attacks that left more than 200 people dead.

Gunmen attacked a Nigerian boarding school on July 5, setting a dormitory on fire as students slept. At least 30 were killed.

"That Jonathan insisted on the scheduled China visit under such domestic pressure indicates the importance he has attached to relations with China," she said.

"Nigeria is the first African country to include RMB in the foreign exchange reserves, which also shows its recognition of the value of China's economy."

Reduced demand for oil from the US is pushing Nigeria to strengthen ties with other major oil importers, He Wenping added. Last year, China became the largest importer of oil from the West African nation.

Nigeria is the largest oil exporter in Africa, with sales accounting for about 80 percent of government revenues.

Nigeria's policy of economic development through infrastructure construction is also pushing the government to seek financial and technical support from China, said He.

Niu Xinchun, from the China Institutes of Contemporary International Relations, noted that Jonathan brought his defense minister to China.

"It suggests that Nigeria, suffering from security issues, also wants to improve cooperation with China in that regard," he said, adding that Nigeria was also a good market for China's industrial overcapacity.

"China's transfer of industrial know-how to Nigeria will improve China's own industrial structure."

Nigeria's Minister of Mines and Steel Development Musa Mohammed Sada, who was on the visit, told Reuters that Chinese state-owned metals trader Sinosteel is in talks to take over a steel mill in Nigeria and expand its capacity from 1.3 million to 5.6 million tons.

China's steel industry has suffered from overcapacity in recent years, while Nigeria is looking for Chinese funding to develop its industry beyond raw material exports, a goal that has been hampered by poor infrastructure.

"As a resource-rich country with some 70 percent of its population under the age of 30, Nigeria has enviable growth potential," a Xinhua News Agency commentary said on July 11.

Nigeria is the most populous nation in Africa. According to the latest UN forecast, by mid-century Nigeria will have a larger population than the US. By 2100, the African nation could be the second-most populous country in the world.

Its economy is also one of the most promising on the African continent, with an annual growth rate of about 7 percent over most of the past decade.

Chinese Premier Li Keqiang told Jonathan when they met last week that cooperation between Beijing and Abuja was in the front line of China's cooperation with African nations.

Jonathan also met top legislator Zhang Dejiang, and leaders of major companies, including Sinopec, Huawei and ZTE.

He also took part in a special session of the Nigeria-China Investment Forum, attended by 300 leading Chinese and Nigerian business people. The event culminated in the signing of no fewer than seven MoUs.

The Nigerian president later visited Daqing in Northeast China's Heilongjiang province to have a look at the oil-related industry there.

AP and AFP contributed to this story.

lixiaokun@chinadaily.com.cn

(China Daily Africa Weekly 07/19/2013 page5)