As U.S. Gradually Closes Door, Nigeria Turns to China to Boost Economy

As U.S. Gradually Closes Door, Nigeria Turns to China to Boost Economy
The US has cut back on its import of Nigerian crude oil

AFRICANGLOBE – With United States government threatening to massively cut down on its oil imports in the wake of its discovery of shale gas, Nigeria, one of its major suppliers, is beginning a frantic search for new customers if its economy is not to be negatively impacted by the development.

Senior Special Assistant to the President (Public Affairs), Doyin Okupe, told reporters last week in Abuja that the Federal Government was already adopting appropriate strategies to effectively mitigate the impact of decline in the US markets, including the encouragement of China, the emerging superpower in the global economy, to be interested in Nigeria as its new preferred investment destination.

Desperate to realise this objective and restore the Nigerian economy on a firm footing, President Goodluck Jonathan is scheduled to lead a high-powered delegation on an official visit to China next week.

Special Adviser to the President(Media & Publicity), Reuben Abati, said on Wednesday in Abuja that the team that would accompany the president on the trip would consist of governors, members of the National Assembly, ministers and representatives of Nigeria’s private sector to China.

This would include the governors of Abia, Anambra, Gombe and Bauchi States and the representative of the Senate, Paulinus Nwagu, and the Hoause of Representatives, Tahir Monguno,

Others include the Ministers of Foreign Affairs, Finance, Petroleum Resources, Works, Agriculture, Aviation, Solid Minerals, Transport, National Planning, Trade & Investment, Niger Delta, Justice, Culture & Tourism as well as the Minister of State for Defence.

According to Mr. Abati, the delegation would, during the visit, hold high level talks with Chinese leaders and captains of industry on the prospects of increasing China’s direct investment in the Nigerian economy.

The itinerary of the visit, which would last five days, reveals that President Jonathan would hold separate meetings with his Chinese counterpart, President Xi Jinping, Premier Li Keqiang and the Chairman of the Standing Committee of the National Peoples Congress, NPC, Zhang Dejiang.

Mr. Abati said talks between President Jonathan and the Chinese leaders would focus on greater bilateral cooperation in areas such as the development of public infrastructure, oil and gas, power supply, agriculture, communications and tourism.

The president, who is also scheduled to participate in a special session of the Nigeria/China Investment Forum to be attended by leading Chinese investors and their Nigerian counterparts, is also billed to lead the Nigerian delegation to hold separate meetings with the Chairmen and Chief Executive Officers of leading Chinese conglomerates in the telecoms and oil and gas sectors, including Huawei, SINOPEC and ZTE.

During the visit to Beijing, President Jonathan is expected to perform other engagements including the commissioning of the new Nigerian Embassy building, laying of the foundation stone for the residence of Nigeria’s Ambassador to China and meeting with members of the Nigerian community in China.

Before returning to Abuja, the President and his delegation will visit Daqing in China’s Heilongjiang Province to confer with leaders of the provincial government and tour the Daqing Petrochemical Industry and Agricultural Demonstration Farm.

“It is expected that before the conclusion of the visit on Friday, July 12, 2013, new bilateral agreements and memoranda of understanding will be concluded and signed to guide and sustain future Nigeria-China relations in these and other areas of cooperation,” the presidential spokesman said.

The Minister of Finance and Coordinator for the Economy, Ngozi Okonjo-Iweala, said a part of the bilateral agreements to be signed by the President during the visit would be a $3 billion Chinese loans to build infrastructure in Nigeria.

The minister said the agreed loans would be based on interest rates of less than three per cent over a 15-20 year period, to underscore the increasing Chinese interest in Nigeria.

According to the minister, Nigeria requires an estimated $10 billion a year of investment to improve infrastructure like roads and electricity to meet the needs of a rapidly growing population of over 167million, and to sustain economic growth at around 6-7 percent.

“We know that China fuelled its growth by really keeping one step ahead in terms of infrastructure … we need roads, we need power, we need help on aviation, agriculture,” Mrs. Okonjo-Iweala told reporters.

China has demonstrated increasing interest in Africa in recent times, granting a number of cheap loans to countries in the continent, which remains one the major suppliers of oil and raw materials like copper and uranium to most Chines companies.

Nigeria has benefitted from some of the loans, including $500 million to build airport terminals in Lagos, Abuja, Port Harcourt and Kano; and over $700 million to build a hydroelectric power plant in Niger State; $600 million to build a light railway in the capital Abuja.

 

By: Bassey Udo