THE POLITICAL ECONOMY OF NIGERIA – CHINA RELATIONS 1999 – 2010

THE POLITICAL ECONOMY OF NIGERIA – CHINA RELATIONS 1999 – 2010

Abstract

The relation between Nigeria and china has grown so much in recent years. This relation is governed by agreements which cut across political, trade, investment, aid, technical and military. The implementation of these agreements is uneven as China is strategically on the advantage side and Nigeria perpetually on the disadvantaged position. Therefore, the study examines the key features and patterns of the economic relations between Nigeria and China in order to establish an understanding of the impact of this relationship specifically to identify and examine the determinants of Nigeria–China relations; assess the relationship between economic reforms and the increase in trade between Nigeria and China; critically examine the relationship between economic reforms and increase in foreign investment between Nigeria and China. The study was guided by three research questions and three hypotheses. To analyse the issues raised, the study was anchored on the dependency theory. The research relied heavily on secondary source of data in order to substantiate the research hypotheses. The findings after a detailed review of the existing literature and analysis of available data were: Nigeria’s exports to china have been dominated by oil exports with few non-oil exports finding their ways into China; import concessions and preferential treatments granted to Chinese investors at the expense of Nigerians created a loss in revenue; Chinese manufacturers have gained at the expense of Nigeria because of their ability to produce and export cheap products to Nigeria thereby undermining Nigeria’s industrializations efforts. It is thus suggested that the Nigeria economy be diversified; exports and dependence on oil exports be balanced with other resources untapped; the local industries in Nigeria be given home grown policy protection in order to compete favourably with the Chinese manufacturers to boost industrialization efforts.

CHAPTER ONE

INTRODUCTION

1.1    Introduction

In the emerging world order, a broad transformation of political alignments is underway with economic factors rising to prominence in the calculations of every nation (Agbu, 1994). In fact, the growing integration of the world’s economy driven by the globalization process, and controlled by international capital which is domiciled largely in Western industrialized countries has opened up most countries of the world and promoted greater freedom in trade and capital flow. According to Kwanashie (2007) trade liberalization is the key to logic of the current global strategy for growth driven by neo-liberal or orthodoxy. This presupposes why the present China-Nigeria relations is fundamental.

Nigeria’s first contact with the Peoples Republic of China (PRC) was in 1960, when she was invited to the country’s independence celebrations. According to Owoeye (1986) this Nigeria’s first contact with China is designated as “the era of informal ties, 1960-1971.” At independence, Nigeria political leadership was not only pro-West but vividly anticommunist. The resultant effect of this peculiar disposition was that Nigeria’s attitude towards communist China followed what had then emerged as a clear pattern of most of her relations with the Socialist States diplomatic isolation accompanied occasionally by bitter attacks against communist ‘subversive’ ideology at home. As Alaba Ogunsanwo (2007), noted, “at independence, the worldview of Nigeria’s political leadership did not factor close relations with the Peoples Republic of China as one of the elements which the country would need to cultivate.” (Alli, 2007). This was despite the fact that Nigeria was the third largest market in Africa for Chinese goods, with a steady growth in import from China. At the same time, the Chinese did not allow Nigeria’s diplomatic snob and ideological preference for capitation to stand in the way of their obviously very lucrative trade relations with the country (Alli; 2007).

Nigeria which had consistently voiced its willingness to formalize ties with People’s Republic of China did so on 10 February 1971 (Owoeye, 1986). According to Kwanashie (2007) Nigeria established relations with China in February 1971 and has since then maintained good relations with her. Like her relationship with most other countries, Nigeria makes little effort in driving these relationships for her benefits. However, Kwanashie argued that the Sino-Nigeria economic relation if properly managed by Nigeria is capable of enhancing the success of reforms. He maintains that China provides a good source of growth inputs into the Nigerian economy. It is clear that Sino-Nigeria relations are driven by the diplomatic initiative of China. The danger for Nigeria is that China’s interests might over shadow the benefits that could result from these relations (Kwanashie, 2007).

China as economic partner to Nigeria has been very dogged and focused in its relations with Nigeria over the decades. Despite the ups and downs of Nigeria-China relations, the Chinese have continued to ensure that their market shares in Nigeria remain on a steady path of growth. This should suggest that China has a long term plan for its engagement with Africa, and it is important for African states, particularly Nigeria to develop a strategy for managing the relationship (Alli, 2007).