Nigeria 2015: analysis of election issues and future prospects

China-Nigeria relations

Overview

China-Nigeria relations got off to a slow start after independence. Although China never officially recognised Biafra during the Nigerian civil war (1967-70), its stance was supportive. Nigeria only recognised the People’s Republic of China in 1971.

While relations improved a great deal in the decades that followed, Taiwan remained a bigger trading partner for Nigeria than the mainland well into the 1980s. However, things began to change thereafter and economic ties have “grown phenomenally in the 21^st Century” as China has actively trawled sub-Saharan Africa for much-needed natural resources.¹⁸⁵

By 2011, Chinese Foreign Direct Investment in Nigeria since the beginning of the millennium was estimated at $7 billion.¹⁸⁶ Military cooperation has also grown. However, Nigeria is not a large oil exporter to China.¹⁸⁷ In terms of development aid to Nigeria, China remains a minor player.¹⁸⁸

Strategic Partnership

Relations between the two countries were close during the presidency of Olusegun Obasanjo (1999-2007). In 2005, China and Nigeria upgraded the relationship to a ‘Strategic Partnership’. This emerged in the context of a broader ‘China-Africa New Strategic Partnership’. The institutional framework for this broader partnership is the Forum on China-Africa Cooperation, a ministerial-level summit that was established in 2000.¹⁸⁹

Trade

Nigeria has run a goods trade deficit with China every year between 1995 and 2013. ¹⁹⁰

Nigerian goods exports to China have been increasing steadily in recent years, from $0.2 billion in 2006 to $1.6 billion in 2013, though they peaked at $1.7 billion in 2011. The vast majority of Nigerian exports to China are oil and natural gas, which made up 72% of exports in 2013.

China has been Nigeria’s largest source of imported goods every year since 2006, overtaking the US. Import values peaked in 2013 when Nigeria imported $14 billion of Chinese goods, a quarter of total imports. The vast majority of imported Chinese goods were manufactured goods, machinery and transport equipment. In 2006, during Chinese President Hu Jintao’s visit to Nigeria, China secured four oil drilling licenses in exchange for a $4 billion investment in oil and infrastructure projects in Nigeria.¹⁹¹

Facets of the relationship

For its part, China’s relative agnosticism about governance and human rights is attractive to Nigeria. However, predictions that Nigeria and other African countries might seriously downgrade relations with Western countries and institutions in favour of China have so far proven wrong.

The contemporary China-Nigeria relationship is not without its tensions. As cheap Chinese imports flood Nigeria, critics have accused China of just being another ‘neo-colonial’ power. Major economic projects involving Chinese state companies have often been announced only to fall through, including in the oil sector.

President Obasanjo introduced an ‘oil for infrastructure’ approach to relations with China, under which Nigeria awarded Chinese energy companies oil blocs in return for Chinese-financed and built infrastructure projects, but his successor, President Umaru Yar’Adua abandoned this approach, instead encouraging Chinese companies to access Nigeria’s oil resources by buying stakes in existing companies.¹⁹²

The number of Chinese living in Nigeria was recently estimated at 70,000. The arrival of Chinese traders and low-cost Chinese goods has led to allegations that domestic manufacturing and trade are being undermined. For example, Nigeria’s textile industry is now under severe pressure; Chinese businesses have illegally copied Nigerian designs and then sold them under fake labels back in Nigeria, as well as in other parts of the world.¹⁹³ There are an estimated 12,000 Nigerians resident in China.¹⁹⁴

5. India-Nigeria relations

Overview

India and Nigeria have long had cordial relations. They have shared history and values around decolonisation and were subsequently both members of the Non-Aligned Movement.

Today both countries are primarily motivated by the concrete benefits of economic cooperation. Nigeria is India’s most important trade partner in Africa and India is Nigeria’s second largest trading partner.¹⁹⁵

However, there is also an element of competition with China underpinning India’s growing interest in building ties with important African countries such as Nigeria. This element of rivalry potentially gives Nigeria greater room for manoeuvre in conducting its relations with these two rising economic powers.¹⁹⁶

India has provided assistance in the fields of defence and education since independence. Indian IT companies have set up franchises in Nigeria and these have provided training opportunities for local students.¹⁹⁷

Trade

Nigeria has run a goods trade surplus with India every year between 1995 and 2013.¹⁹⁸

Nigerian goods exports to India have increased dramatically over the last decade, from $1 billion in 2005 to $12 billion in 2013, though they peaked at $14 billion in 2011.

The vast majority of Nigerian exports to India are oil and natural gas, which made up 98% of exports in 2013. India has become the largest importer of Nigerian crude oil. In 2013, Nigeria made up about 8% of India’s oil imports.¹⁹⁹

Indian goods imports to Nigeria have increased over the last decade, from $0.7 billion in 2005 to $3.1 billion in 2013, though they peaked at $3.5 billion in 2012.

Both India and Nigeria are signatories to the ‘Global System of Trade Preferences among Developing Countries’ (GSTP), signed in 1988 and operation since 1989.²⁰⁰ This agreement aims to foster trade between developing countries within the framework of the United Nations Conference on Trade and Development.

Facets of the relationship

As with China, initiatives between India’s oil companies and their Nigerian counterparts have not always gone smoothly, sometimes falling victim to the vagaries of Nigerian politics.

In 2007 the two countries signed the ‘Abuja Declaration on Strategic Partnership’, which committed both countries to expand ties in trade, investment and consular relations.²⁰¹

More broadly, Nigeria participates in the India-Africa Forum Summits (IAFS).²⁰² The IAFS draw their agenda from the first summit, which produced the 2008 Delhi Declaration and the second, which agreed the ‘Africa-India Framework for Enhanced Cooperation’.²⁰³ The third such summit was due to take place in December 2014 but it was postponed until 2015 following the Ebola outbreak in West Africa.

In 2012 the India-Africa Business Council was also established, with the Nigerian businessman Aliko Dangote one of its co-chairs.²⁰⁴

The Indian community in Nigeria has been estimated at 35,000, with 25,000 of them Indian Nationals but other reports suggest that the real number may be significantly higher than that. The community is well-established and relatively affluent.²⁰⁵

About 50,000 Nigerians live in India. There were protests by Nigerian expatriates in Goa in late 2013, following the murder of one of their number, leading to dozens of arrests; the police there had been investigating suspected Nigerian links to drug gangs. The incident aroused strong feelings back in Nigeria.²⁰⁶

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