Beijing’s Bonuses & DC’s Dividends: When President Buhari Went East and West

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President Buhari’s first meeting with Chinese President Xi Jinping was on September 28, 2015, at the United Nations General Assembly (UNGA) Meeting in New York. Following this, the President participated in the Summit of the Forum on China-Africa Cooperation (FOCAC), with the theme “China-Africa Progressing Together: Win-Win Cooperation for Common Development” in Johannesburg, South Africa, from December 4-5, 2015. 

At the FOCAC, China announced a package of 60 billion U.S. dollars of funding for African countries, as follows:

  • 5 billion dollars of aid and interest-free loans
  • 35 billion dollars of preferential loans and export credit
  • 5 billion dollars of additional capital for the China-Africa Development Fund
  • 5 billion dollars of additional capital for the Special Loan for the Development of African SMEs
  • 10 billion dollars for the take-off of a China-Africa production capacity cooperation fund.

Between April 11 and 15, 2016, President Buhari embarked on an important international trip, a Working Visit to China. He was the first African leader invited on a State Visit to China, after the FOCAC 2015. The primary aim was to secure greater support from Beijing for the development of Nigeria’s infrastructure (power, roads, railways, aviation, water supply, and housing), agriculture and solid minerals.

He met separately with President Xi Jinping; Premier Li Keqiang; the Chairman of the Standing Committee of the National Peoples’ Congress, Zhang Dejiang; Mr. Yang Xiong, Mayor of Shanghai City; and was hosted to a reception by the Secretary of the Communist Party of China in Guangdong Province, Mr. Hu Chunhua.

During the Trip the President also opened a China-Nigeria Business/Investment Forum in Beijing.

During a meeting with Mr Li Keqiang, the Premier of the State Council of the Peoples Republic of China, President Buhari regretted the failure of past governments to meet Nigeria’s obligations in joint projects with China, and pledged that his administration will honour all agreements concluded between Nigeria and China under previous administrations to ensure the speedy completion of outstanding joint projects, including the 4,000 megawatts Mambilla Hydro-Electric Power Project.

The following Agreements were signed between Nigeria and China on that State Visit:

– Framework Agreement between the Federal Ministry of Industry, Trade and Investment and the National Development and Reform Commission of the Peoples’ Republic of China to Boost Industrial Activities and Infrastructural Development in Nigeria.
– Framework Agreement between the Federal Ministry of Communications and the China Aerospace Science and Technology Corporation,
– Memorandum of Understanding between Nigeria and China on Scientific and Technological Cooperation.

The following were also agreed:

– President Xi offered 15 million U.S. dollars agricultural assistance to Nigeria for the establishment of 50 Agricultural Demonstration Farms across the country.
– China and Nigeria agreed to strengthen military and civil service exchanges as part of a larger capacity-building engagement. In line with this, China offered to raise its scholarship awards to Nigerian students from about 100 to 700 annually. In addition, 1,000 other Nigerians are to be given vocational and technical training by China annually.

While in China President Buhari directed the immediate establishment of Nigerian Government technical committees to finalize discussions on the proposed Chinese funding for rail, power, manufacturing, agricultural and solid mineral projects.

In July 2016, Minister of Budget and National Planning, Udoma Udo Udoma, led a Nigerian government delegation to a Coordination Meeting planned as a follow-up to the December 2015 Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC). The Nigerian delegation joined delegations from more than 50 African countries, to meet and discuss with Chinese government officials.

Their mandate: to ensure the implementation of the bilateral agreements signed during President Buhari’s State Visit to China in April, as well as present and discuss a shortlist of Nigerian infrastructure and industrial projects selected to benefit from China’s $60 billion Infrastructure and Human Development assistance to African countries. Senator Udoma said, at the time: “Our relationship with China is very important to us, which was why our President led a big delegation on a State visit to China in April this year. We are quite impressed with the infrastructural development in China and believe that China has a lot to teach us in Nigeria; particularly we will like the support of China in the area of infrastructure development.”

The priority projects presented by the Minister to the Chinese Exim Bank included: Nigerian railway modernization projects from Lagos to Kano (Lagos–Ibadan) and (Kano – Kaduna)
– The coastal railway project from Calabar to Lagos
– The Mambilla Hydro-electric project
– Niger Delta East-West road project.
– Others include power transmission projects, Greater Abuja Water project, Abuja Mass Transit project, Galaxy Backbone project, NTA Digitalization, Expansion of Abuja-Keffi road, and the dualization of the Akwanga – Keffi road.

Quotes from President Buhari’s 2016 Trip to China

“Although the Nigerian and Chinese business communities have recorded tremendous successes in bilateral trade, there is a large trade imbalance in favor of China as Chinese exports represent some 80 percent of the total bilateral trade volumes. This gap needs to be reduced. Therefore, I would like to challenge the business communities in both countries to work together to reduce the trade imbalance… You must not see Nigeria as a consumer market alone, but as an investment destination where goods can be manufactured and consumed locally.”

“Last year [2015], during our meeting in New York, President Xi Jinping and I agreed to explore ways of practical cooperation in trade, investment, finance, human resources, agriculture, and fishing. We also agreed to strengthen industrial capacity cooperation in the manufacture of cars, household appliances, construction materials, textiles, food processing, and others.”

“We have an aggressive but realistic infrastructure development programme that forms the backbone of our economic diversification policy. We are embarking on major power, road, rail, seaport, and airport development programmes that will enhance the competitiveness of manufacturing businesses in Nigeria.”

“Clearly, our vision of a diversified and inclusive economy will not be achieved overnight. It will be a long, and in some cases, painful journey. I am very confident we will get there. But we must start that journey now. We hear proposals for shortcuts or quick wins. However, all we need to do is look at our history to know that there are no quick wins or shortcuts in fixing Nigeria. The many decades of damage and destruction cannot be repaired overnight.”

“The reform program we are implementing is not because oil prices are below $45 per barrel today. It is because when oil prices were over $100 per barrel, the majority of Nigerians were still suffering. They were simply forgotten and left behind. So, our reforms are to ensure that the majority of Nigerians are not left behind.”

What you need to know about trade between Nigeria and China

Business and trade relations between Nigeria and China have grown astronomically in the last decade with bilateral trade volumes rising from USD2.8 billion in 2005 to about USD14 billion in 2017.

Nigeria accounted for about 10 per cent of the total trade volume between China and Africa and 42 per cent of the total trade volume between China and the Economic Community of West African States (ECOWAS) countries, in 2015.

On April 28, President Muhammadu Buhari left Abuja for Washington DC, on an official working visit to the United States of America, on the invitation of President Donald Trump. Read the Press Release announcing the visit here

Earlier, on April 27, Minister of Transport Rotimi Amaechi, signed, on behalf of the Government of Nigeria, an Agreement for the commencement of the interim phase of the Concession of Nigeria’s 3,500km Narrow-Gauge Rail network, to a consortium of international companies, led by General Electric (GE), in Washington DC. Read the press release here

On April 30, President Buhari had a private lunch and then a bilateral meeting with President Trump, in the Oval Office of the White House. The meetings touched on security, violence between herdsmen and farmers, trade and investment, governance and anti-corruption, and human rights. After the meeting, the two Presidents held a joint press conference, in the Rose Garden of the White House.

Read the President’s full speech at the White House Bilateral Meeting, here
Read the President’s full speech at the Rose Garden press conference here

On April 30, as part of his working visit to the United States, President Muhammadu Buhari met with a group of US Agribusiness CEOs, and their Nigerian counterparts, to promote US/Nigeria trade and investment relations, at the Blair House, Washington DC. Some of the investment plans discussed include:
– Burger King’s plans to integrate Nigerian farmers in livestock production
– Heinz’ plans for the backward integration of Nigerian tomato farmers into its value chain;
– Tractor manufacturing company, John Deere’s plans for a Nigerian assembly plant that will produce 10,000 tractors in four years. (Find out what John Deere is already doing in Nigeria, in partnership with the Federal Ministry of Agriculture, here)

Also on April 30, the President met with American and Nigerian businessmen from the US Chamber of Commerce’s US-Africa Business Center (USAfBC) and the Corporate Council on Africa (CCA). In attendance were senior executives from Chevron, Lockheed Martin, AGCO, GE, Procter and Gamble, and Boeing.

On April 30, Minister of Foreign Affairs, Geoffrey Onyeama, Minister of Industry, Trade and Investment, Okechukwu Enelamah, and Attorney General of the Federation and Minister of Justice, Abubakar Malami briefed the press, to mark the end of President Buhari’s official visit to the United States.

Find a detailed account of the President’s US Trip in this account by presidential spokesperson, Garba Shehu, here

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