South African Instit

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African perspectives. Global insights.

China in Africa Project

O C C A S I O N A L P A P E R N O 1 0 1

Nigeria and the BRICs: Diplomatic, Trade, Cultural and Military Relations

N o v e m b e r 2 0 1 1

A b i o d u n A l a o

A b o u t S A I I A

The South African Institute of International Affairs (SAIIA) has a long and proud record

as South Africa’s premier research institute on international issues. It is an independent,

non-government think-tank whose key strategic objectives are to make effective input into

public policy, and to encourage wider and more informed debate on international affairs

with particular emphasis on African issues and concerns. It is both a centre for research

excellence and a home for stimulating public engagement. SAIIA’s occasional papers

present topical, incisive analyses, offering a variety of perspectives on key policy issues in

Africa and beyond. Core public policy research themes covered by SAIIA include good

governance and democracy; economic policymaking; international security and peace;

and new global challenges such as food security, global governance reform and the

environment. Please consult our website www.saiia.org.za for further information about

SAIIA’s work.

A b o u t t h e C h I N A I N A F R I C A P R o J e C t

SAIIA’s ‘China in Africa’ research project investigates the emerging relationship between

China and Africa; analyses China’s trade and foreign policy towards the continent; and

studies the implications of this strategic co-operation in the political, military, economic and

diplomatic fields.

The project seeks to develop an understanding of the motives, rationale and institutional

structures guiding China’s Africa policy, and to study China’s growing power and influence

so that they will help rather than hinder development in Africa. It further aims to assist African

policymakers to recognise the opportunities presented by the Chinese commitment to the

continent, and presents a platform for broad discussion about how to facilitate closer

co-operation. The key objective is to produce policy-relevant research that will allow Africa

to reap the benefits of interaction with China, so that a collective and integrated African

response to future challenges can be devised that provides for constructive engagement

with Chinese partners.

A ‘China–Africa Toolkit’ has been developed to serve African policymakers as an

information database, a source of capacity building and a guide to policy formulation

SAIIA gratefully acknowledges the generous support of the main funders of the

project: The United Kingdom Department for International Development and the Swedish

International Development Cooperation Agency.

Project leader and series editor: Dr Chris Alden, email: J.C.Alden@lse.ac.uk

© SAIIA November 2011

All rights are reserved. No part of this publication may be reproduced or utilised in any form by any

means, electronic or mechanical, including photocopying and recording, or by any information or

storage and retrieval system, without permission in writing from the publisher. Opinions expressed are

the responsibility of the individual authors and not of SAIIA.

Please note that all currencies are in US$ unless otherwise indicated.

A b S t R A C t

The increasing involvement of the emerging powers of Brazil, Russia, India and China,

collectively called the BRICs, in Africa is a much-discussed topic. This is especially so in

relation to key issues of how African governments have perceived this relationship, how

the competitions between these emerging powers have played out on the continent, and

how other local stakeholders on the continent have viewed the growing dominance of

the BRICs in Africa’s socio-economic activities. These issues have become more profound in

countries that are also regional power blocks on the continent.

The paper explores the relationship between the BRICs and Nigeria, undoubtedly one

of Africa’s key countries and one that is also an aspiring member of the expanded BRICs. It

considers the relationship in the areas of economic relations, diplomatic contacts, cultural

and social dealings, and military collaborations. The paper also looks at the links between

Nigeria and the BRICs on the crucial subject of oil, Nigeria’s primary natural resource, and

the complex politics that surround the exchange of oil for development. It concludes that

despite the efforts to portray a smooth relationship between Nigeria and the BRICs, there

have been areas of difficulties. Occasional hiccups still exist between Nigeria and the

BRICs, and among the BRICs themselves in their bid to gain the upper hand in the Nigerian

market. However, in the long term all parties are confident of the continuing development

of mutually beneficial relations.

A b o u t t h e A u t h o R

Abiodun Alao is a senior research fellow at the Conflict, Security and Development Group

at King’s College, London. He has written extensively on African security issues. His published

books on the subject include Natural Resources and Conflict in Africa: The Tragedy of

Endowment;1 The Mau-Mau Warrior;2 The Burden of Collective Goodwill: The International

Involvement in the Liberian Civil War;3 Brothers at War: Dissidence and Rebellion in Southern

Africa;4 Peacekeepers, Politicians and Warlords: The Liberian Peace Process;5 and Africa

After the Cold War: The Changing Perspective on Security.6

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C H I N A I N A F R I C A P R O J E C T

A b b R e v I A t I o N S A N d A C R o N y m S

BPE BureauofPublicEnterprises

BRIC Brazil,Russia,IndiaandChina

CCECC ChinaCivilEngineeringConstructionCorporation

CGCC ChinaGezhoubaGroupCorporation

CNOOC ChinaNationalOverseasOilCompanyLimited

DMC DisasterMonitoringConstellation

DRC DemocraticRepublicofCongo

EOI ExpressionofInterest

GDP grossdomesticproduct

GICC GeneticInternationalCorporationofChina

ICBC IndustrialandCommercialBankofChina

IT informationtechnology

KNOC KoreaNationalOilCorporation

LNG liquefiednaturalgas

MEND MovementfortheEmancipationoftheNigerDelta

MOU memorandumofunderstanding

NAFDAC NationalAgencyforFoodandDrugAdministrationandControl

NTPC NationalThermalPowerCorporation

OMEL ONGCMittalEnergyLimited

ONGC OilandNaturalGasCorporationLimited

OPL OilProspectingLicence

OVL ONGCVideshLimited

PGCIL PowerGridCorporationofIndiaLimited

PHCN PowerHoldingCompanyofNigeria

SON StandardsOrganisationofNigeria

N I G E R I A A N d T H E B R I C S

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I N t R o d u C t I o N

Fewcountrieshavebeenheldinequalmeasuresofconsternationandadmirationas

Brazil,Russia,IndiaandChina,knowncollectivelyastheBRICs.Theextenttowhich

theyhavetransformedtheireconomiesandextendedtheirtentaclesacrosstheworld

withinarelativelyshortperiodhavebeensubjecttointenseinterestanddiscussion.7

Someviewtheirrapideconomicdevelopmentaspossibletemplatesforotherdeveloping

countriestoattaintheeconomicadvancementthathaseludedthemsinceindependence.

OthersbelievethataspectsoftheirpoliciescautionagainstusingtheBRICs(oratleast

someofthem)asmodelsfordevelopingnations.8

PerhapsthemostcontroversialofalltheBRICrelationships,however,havebeenthose

heldwithAfricancountries.Animportantissueiswhethertheserelationshipsaretruly

mutuallybeneficial–beyondtheplatitudinousdeclarationsbygovernmentsofrespective

sides.Anotheristhelong-termconsequencesoftherelationships.Concernsalongthese

linesareexpressedoftenacrosstheAfricancontinent.However, thesituationinkey

Africancountries,especiallyNigeria,SouthAfrica,Angola, theDemocraticRepublic

ofCongo(DRC)andAlgeria,areparticularlyprofound.Asregional‘hegemons’around

whichAfrica’srelationshipswiththerestoftheworldareoftengauged,BRICinteractions

withthesecountriesareofconsiderableinterest.ThepaperreviewsNigeria’srelationship

witheachoftheBRICcountries,especiallyintermsoftradeandcommercialrelations,

bilateralagreementsandmilitarylinks.Itexamineshoweachcountryhasrelatedwith

theNigerianpopulationandhoweachis,inturn,perceivedbyNigerians.Finally,the

paperundertakesacomparativeassessmentoftherelationshipamongthefourcountries

themselvesintheirbidtocaptureNigeria’smarketandattention.

K e y C h A R A C t e R I S t I C S d e t e R m I N I N g t h e R e l A t I o N S h I P b e t w e e N N I g e R I A A N d t h e b R I C S

Byanystandard,NigeriaisanimportantAfricancountry.Withalmost140millionpeople,

thecountryisbyfarthemostpopulousonthecontinent.However,whatgivesNigeriathe

greatestrecognitionisitsenormousnaturalresourceendowments,especiallyinoiland

naturalgas.Itistheworld’sseventh-largestoilproducerwithoneofthelargestdeposits

ofnaturalgas.Indeed,oilprovidesmorethan95%ofNigeria’searnings.Othernatural

resourcesincludecolumbite,palmproduce,groundnutsandfertilelandforagriculture.

Thecountryalsohasanactiveandarticulatepopulation.

Nigeriahasanumberofinternalchallenges,whicharereflectedinitsrelationswiththe

BRICs.Ithasover250ethnicgroups,andpastmanagementofethicdifferencesresulted

inacivilwarthatwasoneofAfrica’smostbitterconflicts.9Althoughthewarendedmore

thanfortyyearsago,ensuringethniccohesioncontinuestobedifficult,owinglargelyto

remainingdifferencesthatreflectthedivisionofthepast.Nigeriahasbattledtomanage

itsabundantnaturalresources.Resource-producingcommunitiesbelievethattheyarenot

derivingsufficientbenefitsfromthedeposits.10Thishasresultedinmajorinstabilityinthe

oil-producingregionsofthecountry.Managementoftheresourceshasalsooccasioned

massivecorruption,whichisbelievedtohavepercolatedthebodypolitic.11Nigeriahas

experiencedpoliticalinstability,withmorethanhalfthepost-independenceperiodspent

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undermilitaryrule.Althoughthelastdecadehaswitnessedcontinuouscivilianrule,there

havealsobeenallegationsofelectoralmalpractices.However,theApril2011elections

havebeenconsideredoneofthebesteverconductedinthecountry.12

The country’s infrastructure is ineffective.Transportation isweak, evenby third

worldstandards;electricityisepilepticandmedicalservicesarepoor.Despiteitswealth,

Nigeria’sGDPremainsbelow$3,000.Lifeexpectancyandinfantmortalityratesare47

yearsand91.54deathsper1 000birthsrespectively.Althoughthemilitaryisstrongby

Africanstandards,13yearsofinvolvementinpoliticshaveerodedprofessionalism.Thishas

necessitatedconsiderablereformsincethereturnofcivilianrule.Itisthedesiretoaddress

someofthesechallengesthatdetermineaspectsofNigeria’srelationshipwiththeBRICs.

TheBRICsarefarmoreadvancedthanNigeriaonvirtuallyall fronts.Althougha

largecountrybycontinentalstandards,NigeriaisstillsignificantlybehindtheBRICs,as

reflectedinTable1.

Table 1: Overview of Nigeria and the BRICs

Nigeria Brazil Russia India China

Population 138 million 190 million 140 million 1.15 billion 1.43 billion

GDP per person $2,500 $10,800 $15,900 $3,500 $7,600

Infant mortality per thousand

91.54 21.170 10.8 47.57 16.6

Life expectancy (years)

47.56 72.53 66.29 66.8 74.68

Key imports Machinery, chemicals,

manufactured goods

Machinery Machinery, iron and

steel

Crude oil, fertiliser

Crude oil, mineral fuel,

metal, organic

chemicals

Key exports Petroleum, cocoa, rubber

Transport equipment,

coffee

Wood and chemicals

Machinery, iron and

steel, chemicals

Electrical and other machinery,

textiles, iron ore

Source:Author’sown

InalltheBRICs,thereisameasureofpoliticalstability,astrongmilitaryandanimpressive

levelofinfrastructuralstandards.Levelsofcorruptionaresignificantlylowandallare

appreciablyaheadinareasoftechnologicaladvancement.Indeed,insomeoftheBRICs

thestandardofadvancement iscomparabletoandsometimesevensurpassesthatof

WesternEuropeoreventheUS.However,economicadvancementhascomeataprice,

asthereisoftentheconstantneedforenergysupplytomeetthedemandsofgrowing

technologicaladvancement.Itisagainstthisbackgroundofwhatonecountrypossesses

andtheotherlacksthatthepaperexaminestherelationshipbetweenNigeriaandBRICs,

startingwithBrazil.

N I G E R I A A N d T H E B R I C S

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N I g e R I A ’ S R e l A t I o N S h I P w I t h e A C h o F t h e b R I C S

This section discusses key issues such as diplomatic relations, trade connections

(especiallyastheserelatetoNigeria’svast,andoftencontroversial,oilandgasresources),

majorbilateralagreements,involvementinNigeria’sinfrastructuraldevelopment,cultural

links,militarycontactsandofficialrelations.

N I g e R I A A N d b R A z I l

Ofallfourcountries,BrazilandNigeriasharethelongesthistory.Duringtheinfamous

slavetradebetweenthe17thand19thcenturies,manypeoplewerecapturedfromwhat

laterbecameNigeriaandenslavedinBrazilianplantations.Asaresult,Brazilnowhasthe

largestpopulationofblacksintheworldoutsideNigeria.Indeed,itisbelievedthatmost

blackstakentoBrazilduringtheslavetradeoriginatedfromthesouth-westernpartsof

Nigeria.TheYorubalanguageisverypopularamongBraziliansandmanyconsiderNigeria

astheirhistoricalhome.AtNigeria’sindependencein1960thetwocountriesestablished

diplomaticrelationsatambassadoriallevels.Relationsremainedrelativelybasic,centred

more on cultural sentiments and historical affinity than on any deep commercial

connection.However,duringthisperiodbothcountriesfollowedastonishinglysimilar

patternsofdevelopment.Bothexperienceddecadesofmilitaryrule;bothmodelledtheir

constitutionsalongthelinesoftheUS;bothhadpowerfulcentralgovernments;andboth

hadartificiallycreatedcapitalcities.Inthelastdecadeotherissueshavebroughtthese

similaritiestotheforefrontofattention.

Sincetheearly2000stherelationshipbetweenNigeriaandBrazilwasbasedonthree

mainconsiderations.ThesewereBrazil’srisetoglobalimportanceasamajoreconomic

power;Nigeria’sappreciationofwhatitcouldgainfromBrazilinitsownsearchforsocio-

economicdevelopment;andBrazil’sneedforNigeria’snaturalresourceendowments.In

addition,therecentincreaseintradeandcommerciallinksbetweenthetwocountrieshas

revitalisedincreasinglystagnantculturalandhistoricallinks.

Diplomatic relations

ThefirstfewyearsfollowingthereturnofdemocraticruletoNigeriainMay1999didnot

giveanyindicationofthestrongdiplomaticrelationsthatwereabouttounfoldinNigeria–

Brazilrelations.Althoughbothsidescontinuedtocherishhistoricalandeconomiclinks,

therewasinitiallynoboisterousdisplayoffriendship.BrazilwasthelastofalltheBRICsto

bevisitedbytheNigerianpresident;andthiswasnotevenuntilhissecondterminoffice.

However,despitetheabsenceofofficialcontactatthehighestlevels,cordialdiplomatic

relationscontinuedbetweenthetwocountries.Thiswasenforcedbytheobviouspro-

AfricanforeignpolicyadoptedbytheBrazilianPresidentLuizInácioLuladaSilva,after

heassumedofficein2002.14

ThefirstmajordiplomaticconnectionbetweenthetwocountriescameinJanuary

2005,whena14-mandelegation ledbytheBrazilianMinisterofExternalRelations,

CelsoAmorim,visitedNigeria.AlthoughthemeetingwastobeaprecursorforPresident

DaSilva’svisit,NigerianPresidentObasanjousedtheopportunitytodiscussissuesof

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commoninterest.ThisincludedapromisethatNigeriawouldco-operatewithBrazilon

thesubjectofUNreforms.Thefirstmajorclimaxoftherelationshipbetweenthetwo

countrieswasinApril2005,whenPresidentDaSilvapaidatwo-daystatevisittoNigeria.

Thisgavethepresidentstheopportunitytolaythefoundationfordiscussionsthattook

placeduringPresidentObasanjo’sreciprocalvisitinSeptember2005.

TherelationshipbetweenNigeriaandBraziltookamajorleapforwardinSeptember

2005whenthetwopresidentssignedabilateralagreement.Thisfocusedonfourmajor

areas of trade and investment, technical co-operation, cultural revival, and regular

politicalconsultations.Becauseof itshistorical linkswithAfrica,Brazilalsowanted

NigeriatoprovideteacherstoteachAfricanhistoryinBrazil.Duringthevisit,Obasanjo

notedthatbothcountrieswereintheprocessof‘re-ignitingthegoldenyearsofNigeria–

Brazilrelationsofthe1980s’.15Sincethen,thevalueofbilateraltradehasreachedover

$2billionandthejointco-operationprofilehascoveredvirtuallyeveryfacetofhuman

activity.16Obasanjousedtheopportunityofthevisittocallfordiplomaticeffortstorevive

theSouthAtlanticPeaceandCo-operationZoneandcommittedtheNigeriangovernment

toconveningan inaugural summitof leaders fromAfrica, theCaribbeanandSouth

America.OtherNigerianleaderswhohavevisitedBrazilincludetheformerlatePresident

UmaruYar’AduaandcurrentVice-PresidentNamadiSambo.

Table 2: Diplomatic visits by Nigerian leaders to Brazil, May 1999 to May 2011

Date Leader Focus of discussion

September 2005 President Obasanjo Participation in the commemoration of Brazilian National day

August 2009 President Yar’Adua Bilateral discussions

January 2011 Vice-President Namadi Sambo Bilateral discussions

Source:Author’sown

Table 3: Diplomatic visits by Brazilian leaders to Nigeria, May 1999 to May 2011

Date Leader Focus of discussion

April 2005 President da Silva Bilateral discussions

November 2006 President da Silva To attend the 1st Africa South American Summit

Source:Author’sown

Asdiscussedlater,diplomaticexchangeshavefocusedontradeandculturalrelations

betweenthetwocountries.Subjectsofinteresthavealsocoveredotherareas.Forexample,

NigeriaandBrazilareworkingtogetherintheareaofdrugsandnarcoticscontrol.Both

countrieshaverealisedthattheircitizensandthosefromothercountrieshavebeenusing

NigeriaandBrazilasroutesfordrugs.Theseriousnessofthisproblemwashighlighted

inApril2010,bywhich timetheNigerianNationalDrugLawEnforcementAgency

hadplacedtheNigerian–Brazilrouteonredalertinabidtointerceptmovesbydrug

traffickingsyndicates.

N I G E R I A A N d T H E B R I C S

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Trade relations

AlthoughtraderelationsbetweenNigeriaandBrazilhavealwaysbeenasubjectofinterest

forbothcountries,therehasbeenaremarkableincreaseoverthelastdecade.Theimpact

ofthenewdawninNigeria–Braziltraderelationswasalreadynoticeableafterthefirstfew

yearsofcivilianruleinNigeria.Between2003and2005,Nigeria’smerchandiseexportsto

Brazilincreasedfromnearly$1.5billionto$5billion.ThismadeNigeriathefifth-highest

exporterofgoodstoBrazil,aftertheUS,Germany,ArgentinaandChina.Bycontrast,

however,Brazil’sexportstoNigeriaroseonlyslightly,reaching$643,000in2005.Both

sideshaveidentifiedanareaofmutuallybeneficialtradeintheareaofenergy.Nigerian

diplomatsinBrazilhaveidentifiedBrazil’sabilitytodevelopbio-fossilsanditsuseof

ethanolasanalternativetofuelasissuesofpotentialinteresttoNigeria.17In2008foreign

tradebetweenthecountrieswasestimatedat$8.2 billion.Braziliscurrentlythesecond-

largestimporterofNigerianproductsworldwide.

ThebulkofNigeria’stradewithBrazilisoilandgas;andNigeriaisBrazil’slargest

sourceofpetroleum.InitsrelationshipwithBrazil(asindeedwithalltheBRICs),Nigeria

hasendeavouredtotieitsoiltradewithBraziltoinfrastructuraldevelopment.Thisidea

wasfirstbroachedinAugust2009,whenthelateformerPresidentYar’AdualedaNigerian

businessdelegationtoBrazil.Duringthevisit,Nigeria’sformerMinisterofPowerand

Mines,LanreBabalola,saidNigeria’simmediateinterestwasBrazil’shugehydroelectric-

generatingcapacity.TheministeracknowledgedthatNigeria’senergypotentialhadyet

tobefullyharnessedintermsofarrivingatasustainableenergymix.Thiswouldenable

Nigeriatoreachitsgoalofmeetingtheenergyneedsofallitscitizens.Asdiscussedlater,

BrazilhasalsoparticipatedinopenbidstotakecontrolofNigeria’soilblocks.

Recentlytherehasbeenclosecollaborationbetweenthetwocountriesontheissueof

hydropower.ThejointagreementbetweenNigeriaandBrazilonenergyco-operationwas

signedwhenthelatePresidentYar’AduavisitedBrazilinAugust2009,followingwhich

anEnergyCommissionwasestablishedbetweenthetwocountries.Accordingtothe

NigerianVice-President,NamadiSambo,theobjectiveoftheCommissionistoassistin

revolutionisingtheNigerianenergysector.Brazilhasexpressedinterestincompletingthe

developmentoftheZungeruhydropowerplantandfinancingtheMambillahydropower

projectunderapartnershipthatwillallowthecountrytohelpdevelopNigeria’spower

industry.TheMambillaprojectwillbebankrolledby theBraziliangovernment from

scratchonaturnkeybasis.InreturnforBrazil’sparticipationintwohydropowerprojects,

NigeriawillgrantBrazilaccesstoitsoilandgasindustry.Thisisparticularlyimportantto

Nigeria,asthegovernmenthadearlierfailedinitspromisetodoubleelectricityoutputto

6 000megawattsbyDecember2009.18InJanuary2011,theVice-PresidentNamadiSambo

furthercementedthisagreementduringhisvisittoBrazil.

Cultural relations

NigeriaandBrazilcontinuetomaintainculturallinks.Recentlytherehavebeenjoint

effortsbetweenNigeria’sCentre forBlackandAfricanArtsandCivilizationand the

Braziliangovernment(throughBrazil’sSpecialSecretariat)topromotepoliciesonracial

equality.Brazil’sgovernmentandthePanAfricanStrategicandPolicyResearchGroup

hostedtwointernationalconferences.ThesewereheldinRiodeJaneiroin2008and

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in Brasilia in 2009. This bond has also delivered a memorandum of understanding

(MOU)thatarticulatesbroadareasofcross-nationalco-operationandarelationshipthat

emphasisesthehistory,artandcultureofNigeriaandBrazil.Signedon15March2010in

Abuja,representativesofthetwocountriesareintheprocessofmappingoutstrategiesto

ensurethesuccessfulimplementationoftheMOU.

Military relations

InSeptember2003,Nigeriaapprovedthepurchaseof15F-7NIandFT-7NIChinese

multirolecombatortraineraircraft.Ithasalsochosentoupgradeitsmilitarylinkswith

Brazil andhasappointed its firstdefenceattaché to thecountry.TheNigerianVice-

President,NamadiSambo,commissionedtheDefenceSectionoftheNigerianEmbassyin

BrazilduringhisvisittoBrazilinDecember2010.ThisindicatesNigeria’swishtoextend

furthermilitarylinkswithBrazil,especiallyinlightofbothcountries’commitmenttothe

SouthAtlanticPeaceandCooperationZone.19

Overall,Nigeria’srelationswithBrazilhavebeenbeneficialforbothcountries.Nigeria

hasbenefitedfromBrazil’sexperienceinthefieldofinfrastructuraldevelopmentand

BrazilhasbenefitedfromNigeria’snaturalresourceendowments.WhileNigeriacontinues

itsfriendshipwithBrazil,anothercountrythatshareshistoricalrelationswithNigeriais

Russia.

N I g e R I A A N d R u S S I A

RussiahasalwaysheldaspecialplaceintheheartsofmostNigeriansasthecountry

thatsupportedNigeriaduringitsbittercivilwarbetween1967and1970.20Although

noelaboraterelationshipwasdevelopedafterthecivilwar,theSovietUnion(andlater

Russia) continued to feature prominently in Nigeria’s diplomacy. This relationship

progressedfurtherfollowingthereturnofcivilianruletoNigeriainMay1999.

Diplomatic relations

InMarch2001,PresidentObasanjovisitedRussiaandbothcountriessignedaDeclaration

onthePrinciplesofFriendlyRelationsandPartnership,andaProgrammeonCultural

andScientificCooperation.RussianPresidentDmitryMedvedev’svisittoNigeriain2010,

thefirstsuchvisitfromaKremlinleadertoAfrica’smostpopulousnation,boostedtheir

relationshipsignificantly.Bothcountriessignedadealtoco-operateindevelopingnuclear

energy,especiallyforthepurposeofelectricity.Anothermajorprojectofinteresttothe

RussianswastheTrans-SaharanGaspipeline,aprojectaimedatsendingNigeriangas

toEurope,andsupportedbytheEUasawaytodiversifyitsenergyresources.Thisis

ofconsiderableinteresttoGazprombecauseofitsbeliefthatitisfarbehinditsforeign

competitorsinAfrica,especiallywhencomparedwithcompaniessuchasRoyalDutch

Shell,ChevronandExxonMobil.By2010bothNigeriaandRussiahadalso started

exploringdiscussionsonspacetechnology,nuclearenergyandpartnerships inother

technicalfields.ThecountrieshavesignedanuclearagreementbetweentheNigerian

N I G E R I A A N d T H E B R I C S

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NuclearRegulatoryAuthorityandtheRussianStateAtomicCorporationtoexploreand

developgasandhydrocarbon-relatedprojectsinNigeria.

Table 4: Diplomatic visits by Nigerian leaders to Russia, May 1999 to May 2011

Date Leader Focus of discussion

March 2001 President Olusegun Obasanjo Bilateral discussions

Source:Author’sown

Table 5: Diplomatic visits by Russian leaders to Nigeria, May 1999 to May 2011

Date Leader Focus of discussion

June 2009 President Medvedev Bilateral discussions

Source:Author’sown

Trade relations

Therelationshipcontinuedtoprogressandin2008thetwocountriessignedaseriesof

MOUs.Oneofthesewastoregulatethepeacefuluseofnuclearenergy.Anotherenvisaged

theparticipationoftheRussian-basedGazprom,theworld’slargestenergycorporation,in

theexplorationanddevelopmentofoilwellsandgasreservesinNigeria.By2009trade

figuresbetweenbothcountriesreachedthe$1.5 billionmarkandbothcountriesbegan

talkingaboutfurtherdevelopingtheirrelationship.Nigeria’sformerForeignMinister,Ojo

Maduekwe,andhisRussiancounterpart,SergeiLavrov,mettodiscussvariousareasof

collaboration.Specifically,Russiawasinterestedinprojectsrelatedtothedevelopment

ofNigeria’sinfrastructure;theferrousandnonferrousmetalsindustry;electricpower

generation, including nuclear energy; and the extraction of hydrocarbon and other

rawminerals.Foritspart,Nigeriawasinterestedinallspectrumsofbilateraleconomic

co-operation,includingtheelectricitysector.

In2010tradebetweenthetwocountriesreached$300 million.Despitetherelative

insignificanceofthisamount,NigeriahasbecomeRussia’ssecond-largesttradepartner

in sub-Saharan Africa, after South Africa. Russia exports metals, fertilisers and oil

consumablestoNigeria,whileNigeriaexportsagriculturalproductstoRussia.21However,

Russiaappearstobegrowingincreasinglydiscontentwithplayingsecondfiddletoother

countrieslikeChinaandIndia.TheRussianAmbassadortoNigeria,AlexandraPolyakov,

hasattributedthelowtradevolumetotheabsenceofalegalframeworktosupportthe

2009InvestmentPromotionAgreementbetweenthetwocountries.

Cultural relations

SocioculturalcontactbetweenNigeriaandRussiadatesbacktotheformerSovietUnion.

ManyNigerianstravelledtotheformerSovietUnion,wheretheyimpartedaspectsof

Africanculture.ManyalsomarriedSoviet citizens; someofwhomcame fromother

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partsoftheSovietUnionbutthemajoritywerefrompresent-dayRussia.Manyofthese

marriagesstillexist,thusreinforcingcontactbetweenNigeriaandRussia.Presentlyboth

Russia’sembassyinNigeriaandNigeria’sembassyinMoscowhaveculturalattachéswhose

mainresponsibilityistofosterculturallinks.Althoughnowsignificantlylimited,Russia

stilloffersscholarshipstoyoungNigerianstudentstostudyinthecountry.

Military relations

Nigeria’smilitaryforcesusewarships,helicoptergunships,trooptransportsandunmanned

drone intelligenceplanes sold toNigeriabyRussiancompanies.Russian instructors

providespecialisedtrainingtoNigeriannavyandairforcesailorsandpilotsinhowto

operatetheshipsandhelicopters.

RussiawasalsoinvolvedintheSeptember2003launchofamilitarysatellitetargeted

at boosting surveillance of Nigeria’s military and crude oil facilities. The satellite,

NigeriaSat-1,wasbuiltbyNigeria’sNationalSpaceAgencyandRussia’sRowbrowExport

inPlesetskatthecostof$13million.Itisalow-earthorbitmicrosatellitedesignedto

monitordisasters.22NigeriaSat-1hasthreespectralbands,namelygreen:0.52–0.62 µm,

red:0.63–0.69 µm,andnear-infrared:0.76–0.9 µm.

N I g e R I A A N d I N d I A

Like Brazil, Nigeria and India have a long history of political friendship, economic

relations and social interaction. The relationship predates Nigeria’s existence as an

independentnation.Indeed,therearerecordedcasesofIndianstradinginNigeriaas

earlyasthe1890s.23Thedepthoftherelationshipowesmuchtothesimilarityincolonial

experienceandsomeofthepoliciesBritainadoptedwhileoverseeingthetwocountries.

Bythe1930sIndianshadpenetratedtheNigerianmarket,especiallythetextileindustry,

andthefollowingdecadeswitnessedtheirdiversificationintomanyothersegmentsof

Nigeria’seconomy.Thisrelationshiphasdevelopedsignificantlyinrecentyears–despite

theeconomicvicissitudesemanatingfromtheglobalmeltdown.Economicconnections

rangefromoilexploration,telecommunicationsandtransportation,toretailing,banking

andmilitarytraining.Ofallthese,however,therelationshipbetweenthetwocountries

inoilandgasappearstobethemostimportantinrecenttimes.Thisisduelargelytothe

importanceoftheseresourcesfortheeconomicdevelopmentofbothcountries.

Diplomatic relations

Sincetheearly2000stherehavebeenvisibledemonstrationsoffriendshipbetweenthe

twocountries.TheIndianHighCommissioninNigeriaestimatedthat35 000Indians

werelivinginNigeriaasofOctober2010.24TherearealsomanyNigerianslivinginIndia.

Diplomaticfriendshipisevidentinseveralexchangesofvisitsbetweenleadersofboth

sides.

ThesigningoftheAbujaDeclarationinOctober2007signalledanimportantnew

phase indiplomatic linksbetweenNigeriaandIndia.Before thisbothcountrieshad

lackedaninstitutionalframeworktosupportinvestmentsandcommerce.Followingthe

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declarationtherehavebeenjointsessionstoreviewthestateofrelationsbetweenthetwo

countries,thefifthofwhichtookplaceinIndiainMarch2011.

Table 6: Diplomatic visits by Nigerian leaders to India, May 1999 to May 2011

Date Leader Focus of discussion

January 2000 President Obasanjo Chief guest at the 50th Republic day celebrations

November 2004 President Obasanjo Working visit

November 2007 Vice-President Goodluck Jonathan

To attend the Federalism Conference

November 2007 High-level diplomatic delegation

To attend the Africa Hydrocarbon Conference

April 2008 Vice-President Goodluck Jonathan

To attend the India Africa Forum Summit

August 2009 Commerce and Industry Minister Chief Udenwa

To participate in the doha Round Informal Conference

January 2010 Labour and Employment Minister Prince A Kayode

Bilateral visit

February 2010 defence Minister Major General (retired) Godwin Abe

Led Nigerian delegation to defExpo

August 2010 Science and Technology Minister Prof MK Abubakar

Led Nigerian delegation to participate in the Bangaluru Space Expo25

March 2011 Foreign Affairs Minister Odein Ajumogobia

To attend the 5th Session of the Joint Commission and sign bilateral agreements

Source:Author’sown

Table 7: Diplomatic visits by Indian leaders to Nigeria, May 1999 to May 2011

Date Leader Focus of discussion

March 2000 External Affairs Minister Satya Mey Vijayte

Co-chairing the Third Session of India–Nigeria Joint Commission

december 2003

Prime Minister Shri Atal Behari Vajpayee

Participation in the Commonwealth Heads of Government Meeting

September 2006

Speaker Lok Sabha Shri Somnath Chatterjee (accompanied by a large delegation)

To attend the 52nd Commonwealth Parliamentary Conference

October 2007

Prime Minister dr Manmohan Singh

Bilateral discussions; signing of the Abuja declaration on Strategic Partnership

July 2008 Special Envoy to the Prime Minister Shri Anand Sharma

Bilateral trade discussions

January 2010

Honourable Minister for Commerce and Industry Shri Anand Sharma

To attend the ‘Namaskar Africa’ event

January 2010

Minister for Petroleum and Natural Gas Shri Murli deora

Bilateral visit

Source:Author’sown

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Trade relations

IndiahashadahistoryofextensivecommerciallinkswithNigeria.Accordingtothe

NigerianForeignAffairsMinistry,Indo–Nigeriatradereachedapeakof$10.2billion

during2008–09,althoughtheglobalrecessionreducedthisto$8.7billionin2009–10.

Bilateraltradegrewbyover50%duringthefirsthalfof2010–11,comparedwiththe

correspondingperiodforthepreviousyear.Tradeisestimatedtoreach$12billionfor

2011–12,andIndianinvestmentsinNigeriaareestimatedat$5 billion.India’sexports

toNigeriaaredominatedbymanufactureditemssuchasmachineryandinstruments,

pharmaceuticals,electronicsandtransportequipment. Mainitemsinthenon-oilimport

basketofIndiafromNigeriaincludemetalliferousoresandmetalscraps,non-ferrous

metals,woodandwoodproducts,andcashewnuts.Traditionally,thebalanceoftrade

hasbeeninNigeria’sfavour,owingtolargeIndianimportsofcrudeoil.Itisbelievedthat

NigeriaiscurrentlyIndia’slargesttradepartnerinAfrica.Ontheindustrialfront,Indian

companiesinNigeriaarethesecondlargestintermsofemploymentofNigeriansafterthe

Nigeriangovernment.

In2007theIndianPrimeMinisterDrManmohanSinghvisitedNigeriaaspartofa

high-levelmeetingtodiscussstrengtheningrelationsbetweenthetwocountries.Since

thenIndiahascontinuedtobealeadingtradepartnerforNigeria.Nigeria’sdesireto

expand thisportfoliowasdiscussedduring thevisit to India inMarch2011by the

NigerianForeignMinister,OdeinAjumogobia,whenheattendedthefifthsessionofthe

JointCommissionwithIndia.TheJointCommissionconstitutesalegalframeworkof

thecollaborationbetweenNigeriaandIndia.Underitthereisawholerangeofactivities,

suchasthebilateralairserviceagreement.26ThefollowingareasareexamplesofIndia’s

businesslinkswithNigeria.

IndiaisoneofNigeria’sbiggestsuppliersofpharmaceuticals.Indianpharmaceutical

companiesbasedinNigeriahaveimportedmedicaldrugsatrelativelycheapprices.There

hasalsobeenasignificantincreaseinNigerianstravellingtoIndiaformedicaltreatment.

ThecostofmedicaltreatmentinIndiaisfarlowerwhencomparedwithEurope;andthe

standardfarmoreadvancedwhencomparedwithNigeria.Accordingly,manyNigerians

considerIndiaasthebestlocationtoundergomedicaltreatment.

Pharmexcil,theIndianPharmaceuticalExportsPromotionCouncil,openeditsfirst

officeoutsideIndiainNigeriainMarch2011.Therewasatwo-dayexhibitionfeaturing

over40IndianpharmaceuticalcompaniesinNigeriaandthetwogovernmentssigned

anMOUonpharmaceuticalco-operationinMarch2011inNewDelhi.TheIndianHigh

Commissioner inNigeriausedtheopportunity toassureNigerians that Indiawould

co-operatewiththeNationalAgencyforFoodandDrugAdministrationandControl

(NAFDAC)tocombatfakedrugs.27Asofthetimeofthevisit,ithadbeenestablishedby

theNigeriagovernmentthatmostofthefakemedicinesenteringthecountryoriginated

fromIndia.TheMOUstipulatesthatIndianscaughtimportingfakedrugsintoNigeriawill

bejailedforlifeandwillhavetheirpropertyconfiscated.ItalsoconfirmsIndia’sagreement

topayfortheprosecutionofanyonesuspectedofcounterfeitingdrugs.Compensationof

NGN28 300,000(about$2,000)willbepaidtoanyinformantwhoprovidesNAFDACwith

informationtouncoverthesourceandproducerofcounterfeitedproducts.Furthermore,

IndiawillcollaboratewithNAFDACincapacitybuilding,trainingprogrammesandassist

inprovidingfundingtotrainmedicalengineers.29

N I G E R I A A N d T H E B R I C S

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IndiafirstbecameinvolvedinNigeria’sbankingsectorin1962,whentheBankof

IndiaopenedabranchinNigeria.ThebankchangeditsnametoAlliedBankbutlater

wentoutofbusiness.Followingthis,Indiashowedlittleinterestinthebankingsector

untilthelastdecade.Anoticeableexception,however,wastheMahtanifamilyfromIndia.

TheyheldconsiderablestakesinCharteredBank,establishedin1988,andlaterRegent

Bank,establishedin2005.InNovember2005bothbanksmergedwithotherstoform

theInvestmentBankingandTrustCompany(IBTC),inwhichtheMahtanifamilyhave

retainedasignificantstake.

AnotherlandmarkIndianinvolvementinbankingcameinJune2011,whenIndia’s

largestcellularservicecompany,BhartiAirtel, formedapartnershipwithECOBANK

tolaunchmobilebanking.Thetwoagreedtolaunchawiderangeofmobilefinancial

services,includingPersontoPerson,BusinesstoBusinessandmobile-savingproducts.

ThesewillbemarketedunderbrandnamesEcobankMobileandAirtelMoney.30This

partnershipdemonstratestheincreasingimportanceoftheactivitiesofIndiancompanies

intelecommunications.

TelecommunicationsisamajorenterpriseinNigeriaandthecountryprovidesthe

largestmarketinAfrica.IndianshaveenteredNigeria’sbusinessquiteforcefully,with

BhartiAirtelinvesting$600 millioninNigeria’smobilemarketwhenitpurchasedZain

Telecom’sAfricanbusinessfor$10.7 billion.Thecountry’sinvolvementinZainTelecom

hasmadeitpossibleforIndiatoinfiltrateotheraspectsofbusinessintheinformation

technology(IT)sector.Forexample,theNationalInstituteofInformationTechnology,

anIndiancompany,trainsabout15 000NigeriansannuallyinIT,whichenablesthemto

getjobswithoutmuchdifficulty.InMarch2011ZenMobile,oneofIndia’sfast-growing

handsetmanufacturingcompanies,madeitsdebutinNigeria,promisingtoprovidebest-

qualitymobilephonesataffordableprices.IntotalsixZenmobilephoneswerelaunched,

namelytheX381,X410,X430,M20,Z66andX82.31

IndiansareinvolveddeeplyinNigeria’sretailbusinessandownanumberofbigshops

inNigeria.Theseinclude‘ParkandShop’,oneofNigeria’sbiggestretailshops,aswellas

SumalFoods,DanaJuice(whoseproductsincludejuiceandpharmaceutics),Trawley,

UnitedFoods(makersofIndominenoodles),andOKFoods.

AmajorlinkbetweenNigeriaandIndiaintheeducationsectoristhePan-African

e-NetworkProject.The satellite and fibrenetworkproject is an initiativeof Indian

President,DrAPJAbdulKalam,usingIndianexpertiseinITtobenefitthehealthcareand

highereducationsectorsinAfricancountries.Itwillprovideeffectivecommunicationand

connectivityamongthe53Africannationsthataresignatoriestotheproject.Theproject’s

threecomponentsaretele-education,telemedicineandaVideoConferencinglink.Asone

ofthepilotcountries,NigeriaintroducedtheprojectinFebruary2009.TheUniversity

ofLagoswillbethelocationforthetelemedicineandtele-educationcomponents.The

UniversityofIbadanwillserveastheregionalhighlyspecialisedhospital.

Underthearrangement53universities,53hospitals,fiveregionaluniversitycentres

andfivespecialisthospitals inAfricawillbeconnectedviasatellite, fibreopticsand

wirelesslinksto12highlyspecialisedIndianhospitalsandsevenIndianuniversities.

Eachhostcountrywillhaveoneuniversityandonehospitalconnectedtothenetwork.

Eachconnectedhospitalwillreceiveonehouroflivetele-consultationaswellasoffline

consultationforfivepatientsperdayfromthe12selectedhospitalsinIndia.Ongoing

medicaleducation forsomedoctorsandnurseswillalsobeoffered.Eachconnected

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universitywillbeabletoruntele-educationalcoursesofferedbythesevenselectedIndian

universities.Theproject,estimatedat$100millionforafive-yearperiod,isbeingfunded

entirelythroughIndia’sMinistryofExternalAffairsAid-to-Africabudget.

TwoIndiancompaniesareattheforefrontofIndia’sinvolvementinvehicleimportation

intoNigeria.ThesearetheDanaGroupandtheStallionGroup.TheDanaGrouphasbeen

responsiblefortheimportationofKiavehiclesintoNigeria,whiletheStallionGrouphas

beenresponsiblefortheimportationofvehiclessuchasHyundai,HondaandAudiVW.

TheDanaGroupisalsoinvolvedinairlines,operatingflightsacrosskeycitiesinNigeria,

especiallyprofitablerouteslinkingLagos,thecommercialcapital,withthecapitalAbuja

andtheoilrichcityofPortHarcourt.IndiantricyclesarecommoninLagos.

Indiaisalsotryingtoensurethatitmeetsthesatisfactionofitsclients.TheDana

GrouphasenteredintoanagreementwithaNigeriancompany,AffordableCarsLimited,

toprovidesales,after-saleservicesandtechnicalservicestoKiacustomersinIkeja,Lagos

andtheenvirons.This,accordingtothemanagingdirectorofDana,JackyHathiramani,is

tobringservicesclosertothecustomers.32

Table 8: Overview of India–Nigeria trade ($ million), 2003–2010

2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10

Indian exports to Nigeria

565.49 644.68 874.03 903.48 1,083.34 1,529.26 1,408.25

Indian imports from Nigeria

75.64a 48.40a 72.46a 7,026.93 7,616.09 8,900.35 7,287.91

a Excludesoilimportfigures.

Source:FiguresprovidedbytheIndianHighCommission,Abuja,Nigeria

OtherinitiativesincludethesigningofatechnicalserviceagreementbetweenNigerian

ChemicalIndustriesLimited,Notore,andanIndiancompany,TataChemicalsLimited,

inApril2011.TataChemicalsLimitedisanintegratedchemicalcompanyandpartofthe

TataGroupofCompanies.33TheaimoftheagreementwastoassisttheNigeriancompany

infurtheroptimisingandachievingbreakthroughperformanceinitsfertiliserplantin

Onne,RiversState.

IndiaisalsointerestedinestablishingacoalandgaspowerprojectinNigeria.India’s

largestpowerproducer,theNationalThermalPowerCorporation(NTPC),cameupwith

thisinitiativebutlaterabandoneditfollowingdelaysinfinalisingapartnershipforthe

venture.InFebruary2011theNTPCrestateditscommitment.Thearrangementinvolved

Nigeriaensuringtheyearlysupplyof3milliontonnesofgasforNTPCprojectsinIndia.

Inreturnforthegas,theNTPCwastobuilda700-megawattgas-firedpowerplantanda

500-megawattcoal-basedplant;andrenovatea200-megawattunitata1 300-megawatt

plant.TheNTPCalsoofferedtotrain30Nigerianengineersandsetupatraininginstitute

inthecountry.TheproposalwasinitiallycalledoffbecausetheNigerianpartnerswanted

anequitystakeinthepowerprojectstobesetupbytheNTPCinlieuofusingtheir

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influencetoensurethesigningofthegasagreement.34Thishasnowbeenresolved.

Overall,India’sinvolvementinNigeriafallsunderitswideroutreachprogrammein

Africa.Sincetheearly2000sIndiahasbeenextensivelyinvolvedinwiderinvestmentin

Africa.ThecountrylaunchedaninitiativeknownasTeam-9Techno-EconomicApproach

forIndiaMovement,seekingco-operationwithWestAfricancountrieslikeChad,Cote

d’Ivoire,EquatorialGuinea,Ghana,Mali, Senegal,GuineaBissauandBurkinaFaso.

Indiapledged$500millionasconcessionarygiftstothesecountries.Otherrecentcases

ofIndiangenerositytoAfrica includeprovidingacredit line for$200milliontothe

NewPartnershipforAfrica’sDevelopmentandcancellingdebtsowedbyAfrica’shighly

indebtedpoorcountries;launchingtheFocusAfricaProgrammebyIndia’sEximBank

topromoteAfrica–Indiatrade;andattainingfullmembershipoftheAfricanCapacity

BuildingFoundationandpledging$1 milliontocapacitybuildingandpovertyalleviation.

However,centraltoIndia’sinvolvementinNigeria,andperhapsthemostcontroversial,

appearstobeNigeria’soilreserves.

Aswithmostemergingpowers,Indiarequiresaconsiderableenergysupply.Indeed,

itisenvisagedthatIndia’senergydemandisexpectedtoincreasebyover40%duringthe

nextdecade,whilesupplyfromitsageingoilfieldsisexpectedtoincreasebyonly12%.

Thishasnecessitatedhigherimportsofoilandgasassets,andIndiaviewsAfricaasthe

continenttomeetthisdemandespeciallyagainstthebackgroundofinstabilityinthe

MiddleEast.AlthoughIndiamaybelookingtowardsAfricaasawhole,Nigeriaisitsmain

target–especiallysincetheWestAfricannationplanstoincreaseitsdailyoilproduction

from2.7millionbarrelsto4millionbarrelsby2012.RecentlyNigeriahasbeenoneof

India’smainsourcesofcrudeoil,fulfillingaround8–12%ofitsrequirements.35Currently

Indiaimportsapproximately13 million metrictonnesofcrudeoilfromNigeriaannually.

The special adviser to theNigerianpresidentonpetroleummatters,DrEmanuelO

Egbogah,hasrespondedpositivelytoIndia’srequesttoincreasetheseimports.

Besidestradeinhydrocarbons,IndiahasalsomadeadecisiveentryintotheNigerian

upstream and refining sectors. Indeed between 2005 and 2007 Indian companies

participatedinNigerianbidroundsandwonsixoilblocks.ONGCMittalEnergyLimited

(OMEL)wonthreeblocks(OPL279,OPL285andOPL297);Sterlingtwo(OPL2005and

OPL2006);andEssarone(OPL226). Thereisabitofahistorytothis,whichtoanextent

showsthenatureofconductingoilbusinessinNigeria.InAugust2005ONGCVidesh

Limited(OVL)wonBlocks321and323,whicheachholdreservesoftwobillionbarrels,

committing$485 millioninsigningamount.However,theNigeriangovernmentawarded

thesetotheKoreaNationalOilCorporation(KNOC)onthegroundsthatithadafirst

rightofrefusalovertheblocks.36KNOCsignedproduction-sharingcontractsforthe

blocksinJanuary2006,butpaidonly$92 millioninsigningamount.Thisforcedformer

NigerianPresidentObasanjotocanceltheallocationanditwasreturnedtotheOVL.

TheOVLalreadyhasthreeblocksinNigeria–OPL279andOPL285(wonin2005)and

OPL246(woninNovember2006).37TheIndiangovernmentgrantedtheONGCVidesh

Limited(OVL)approvaltoinvest$359millionduringthefirstexplorationphaseinthe

twodeepwaterblocks.TheOVLbudgeted$1,195millionforOPL279and$164million

forOPL285,includingthesignaturebonusandacquisitioncost.Asdiscussedlater,this

allocationwastiedtoeconomicdevelopment.

TheOVLisalsoinvolvedintheNigeria–SaoTomejointdevelopmentzoneandbacked

a15%stakeinanoilblockinthezone.ThismarkstheOVL’sentryintoNigeria,the

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world’seighth-largestoil-producingcountrywhereIndiaisseekingmoreequitystakes.

TheOVLhadbidforBlock2intheNigeria–SaoTomejointdevelopmentareaaspartof

aconsortiumledbyDevon,PioneerandERHCEnergy.Otherpartnersintheblockare

EquatorExplorationandA&Harmattan,eachwitha10%stake;andFobyEngineering

andMomoOil&Gas,whichholdtheremaining75%equally.

IndiaandNigeriaarecurrentlyreviewingprogressintheexplorationblockswhere

OVLhasparticipatinginterests.Indiahasalsoproposedsecuringliquefiednaturalgas

(LNG)fromNigeria. IndiancompaniesGasAuthorityof IndiaLimitedandPetronet

LiquefiedNaturalGasLimitedhaveexpressedinterestinacquiringastakeinthe$8 billion

LNGprojectatBrassintheNigerDelta,andwilllookatotherinvestmentopportunitiesin

thearea.Indiahasalsoexpressedadesiretoparticipateinthenextroundofbiddingfor

explorationblocksinNigeria,expectedtobelaunchedinmid-2012,andalsoinexisting

oilassets.

India’spositiveperformanceintheoilbusinesspromptedNigeria’sMinisterforForeign

Affairs,whowas formerly theMinister forPetroleumAffairs,OdeinAjumogobia, to

commendanIndiancompany,SterlingGlobal,thatwasoperatingintheshallowwaters

oftheNigerDelta.DespitethegeneralinstabilityintheNigerDeltathatpreventedother

companies likeTotalandShell fromoperating,SterlingGlobalwasable tocontinue

operatingbecauseithaddevelopedcordialrelationswiththelocalcommunity.

OilhasalsoplayedapartinIndia’sinfrastructuraldevelopmentactivitiesinNigeria.

In2006whenIndiawontwoofthe18oilblocks(Blocks279and285),OMELpromised

toinvest$6 billioninbuildinganewrefinerythatwouldproduce180 000barrelsper

day;buildinga2 000-megawattpowerplant;orinbuildinganEast–Westrailwayorany

otherdownstreamprojectasmaybedeterminedbythecountry’ssteeringcommittee.

OMELwasalsogiventherightoffirstrefusalonBlock250inexchangefortheexecution

ofafeasibilitystudyonanewrailway.However,theimplementationofthisdealhas

beenproblematic, as the Indianshavenothonoured their commitment.Nigeriahas

askedOMELtofulfil its$6 billioncommitmentof investingininfrastructure.Anad

hoccommitteefromtheHouseofRepresentativeshasbeenformedtoinvestigatealleged

irregularities in the allotment of oil blocks between 2006 and 2008, after original

applicationsforOPL216andOPL246couldnotbetracedinthefiles.

India’slackofco-operationwasunsurprising.Itpromisedtoerectrefineriesanda

railwaysysteminreturnforjuicyoilblocks,butdidnothingattheendoftheday.By

November2010thesituationhadstabilisedsomewhatandbothsideshadstartedlooking

tothefuture.ConcernremainedovertheEast–Westrailway.However,thespecialadviser

totheNigerianpresidentonPetroleumAfrica,EmmanuelEgbogah,statedthatalthough

theNigeriangovernmentwouldnotexemptIndiafromtheagreement,therewouldbeno

deadlineimposedonthecountrytomakethisdelivery.

IndiaandNigeriahavecomea longwayintheirrelationship,whichiscertainto

continuetoprogress.IndiawillcontinuetobeactiveinmostaspectsofNigeria’ssocial

andeconomiclife.However,theoilandgassectorislikelytoremainthecentreofinterest

andattention.ThisisbecauseIndia’sinterestcontinuestoincreaseinlinewithNigeria’s

reservesanditsdesiretoseekexternalpartners.AlthoughNigeriaintendsonexploring

furtheritsrelationshipwithIndiaintheoilandgassector,itisdeterminedtodosoona

platformthatisfairandwillnotexploitit.Nigeriadesiresapartnershipthatisopenand

mutuallybeneficial.AsacountryNigeriahassufferedsignificantlyatthehandsofoil

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multinationalcorporations,evenfromEuropeandtheUS.Consequently,thereisanatural

tendencyforNigerianstobesuspiciousofallformsofexternalinvolvementinthepolitics

oftheircountry’soil.Indiawillhavetoshowthatitisnotjustanothercountryinterested

inexploitingNigeria’soilwithoutprovidinganyformofassistanceinreturn.

Otheroil-producingcountrieslikeNorwayareknowntohavederivedconsiderable

benefits fromtheiroildeposits.NorwaycanprovidevaluableadviceonhowNigeria

candevelopcrediblepoliciestoensureitmakesthebestofitsendowmentsandofits

relationshipwithIndia.Foritspart,Indiacanobtainmoreknowledgeonhowtotransfer

developmentassistancetoanotherdevelopingcountryinexchangeforoilconcessions.

N I g e R I A A N d C h I N A

CurrentlybothChinaandNigeriaareundergoingsignificantchangesthateachhopes

willenableittobenefitfromitsenormouspotential.Withitsmassivepopulationand

superpowerstatus,Chinahasembarkedonanaggressivepursuitoftradeandinvestment

acrosstheworld.Nigeria,foritspart,hastriedtobringaboutmajordomesticreforms

initspoliticalandeconomicsectorsandthusremoveitsnegativeimageasanunstable

andunreliablebusinesspartner.38Thismutualdesireto‘reachout’formsthebackground

for recent developments and future prospects of Sino–Nigerian economic relations.

Interestingly,eachcountryhaswhatcanattracttheother.Chinaisamajoreconomicand

politicalforcethatcanpositivelycomplementNigeria’sdesiretodiversifyitseconomic

relianceontheWest.ChinaisalsoseenasacredibleinvestorinNigeria’smajormineral

endowmentsandacountrywhosesupportcanassistinNigeria’sinternationaldiplomacy.39

ChinafindsNigeriaattractivebecauseofitsextensivemarket.Itrecognisestheenormous

opportunitiesforanycountrywithinroadsintotheNigerianmarket.

Sino–Nigeriantradelinkscutacrossabroadspectrum,rangingfromoilandgasto

miningandretailing.Oneareathatisyettobefullyexploredisthecurrentandpotential

relationshipbetweenthetwocountriesinthebankingsector.Thebankingsectorsinboth

countriesareundergoingsignificantchangesthathaverequiredthemtogoon‘charm

offensives’foroutsideinvestmentsandengagements.ThissectionexaminesChina’srole

inNigeria’sbankingsectorwithinthecontextofwiderChinesebusinessinterestsinthe

country.ItidentifieskeyareasinNigeria’sbankingsectorthatareinlinewithChina’s

overalleconomicpolicy,andconsiderswhatdifferentchangesinthesectormeanfor

possibleChineseinterestandinvolvement.

Diplomatic relations

2011marksahistoricperiodof the40thanniversaryofdiplomaticrelationsbetween

NigeriaandChina.InJune2002NigeriaandChinasignedfouragreementsonconsulate

matters,co-operationinthefightagainstillicittrafficking,theabuseofnarcoticdrugs

andpsychotropicsubstances,andthediversionofprecursorchemicals.Otheragreements

includedanexchangeofnotesontheprovisionofgoodsbetweenthetwocountriesand

anagreementontourismco-operation.

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Table 9: Diplomatic visits by Nigerian leaders to China, May 1999 to May 2011

Date Leader Focus of discussion

April 1999 President-elect Obasanjo Bilateral discussions

August 2001 President Obasanjo Bilateral discussions

April 2005 President Obasanjo Bilateral discussions, with the president visiting as African Union chairperson

February 2008 President Yar’Adua Bilateral discussions

September 2010 President Obasanjo Private visit

Source:Author’sown

Trade relations

Nigeria andChina signed their first economic, scientific and technical co-operation

agreement,aswellasatradeagreement,in1972.ThistookplaceduringavisittoNigeria

bytheformerChineseMinisterofForeignTradeandEconomicCooperation,FangYi.

Sincethentradelinkshavegrownsignificantly,coveringmostaspectsofeconomiclife.

TheNigeria–ChinaChamberofCommercewasestablishedtoensurefurtherdevelopment

oftraderelationsbetweenthetwocountries.TradebetweenNigeriaandChinareacheda

newhighof$7.76billionin2010,makingNigeriathefourth-largesttradepartner(after

Angola,SouthAfricaandSudan)andsecond-largestexportmarketofChinainAfrica

(afterSouthAfrica).40

ThedevelopmentoftheNigerianRailwayProjectwasakeyaspectofthecountries’

relationship.TheprojectfirstbeganduringtheMurtalaMohammedandObasanjoregime

of1975–1979,butendedbecauseofallegedgreedandcorruptiononthepartofsome

Nigerian leaders. Itwas laterreactivated,witha teamofChineseengineers fromthe

ChinaCivilEngineeringConstructionCorporation(CCECC)visitingNigeriatoassess

theproject.AcontractwassignedinDecember1995withapricetagof$528.60million.

Itinvolvedthesupplyofcoaches,locomotives,wagonsandguardvans,andrestructuring

ofraillines.

Duringthe1990sothereconomicrelationsincludedChina’sinvolvementinirrigated

riceplantationsinItoikin,Lagos;waterresourcesinBornoState;andinNigeria’sNational

ElectricityPowerAuthority,nowthePowerHoldingCompanyofNigeria(PHCN).China

wasalsoinvolvedinNigeria’scontroversialsteelprojectsinAjaokutaandAladja.The

twocountriessignedanenablingagreementinMay1997,althoughthislaterplunged

intoaseriouscorruptionscandalinvolvingthelatePresidentSaniAbachaandotherkey

Nigerianleaders.NigeriaandChinaalsosignedseveraleconomicagreementsduringthe

Obasanjocivilianadministration.

ChinesefirmshavebeentroopingintoNigeriatoconductbusiness.InApril2005

ZTECorporation,aChinese telecommunications firm,enteredadealwithNigerian

Telecommunications Limited to expand Nigeria’s Code Division Multiple Access

networkfollowingasuccessful10 000-linetrialinMaiduguri,BornoState.Theproject

ismeanttoprovidelocaltelecomcomponentsandotherancillaryservices.TheCCECC

built theNigerianCommunicationsCommissionbuilding inAbuja.Huawei,agiant

N I G E R I A A N d T H E B R I C S

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Chinesetelecommunicationscompany,hasalsostarteddoingbusiness inNigeria. In

addition,ChinaisthesourceofthehordesofOkada(motorcycles)onNigerianroads.

ShaoHuixiang,deputydirector-generalofShanghaimunicipality,wheremanyofthe

motorcyclesoriginate,confirmedtheincreaseintransactionsbetweenChinaandNigeria.

HenotedthatthebackuptradedestinationbetweenShanghaiandNigeriaaloneamounted

toapproximately$172million.

InApril2008theBornoStategovernmentawardedsixmajorcontractstoChinese

constructionandengineeringfirmsforconstructiononayear-roundwaterchannelcalled

WaterFall.Thiswastoaddressissuesoffloodinganddrainageconstruction,andalsoto

curtailmosquitoinfestation.Chineseconglomerate,ZhuhaiMinghongGroupCorporation

Limited,agreedtorevivethe350-acremoribundAwoomamaResortinOruEastLocal

CouncilofImoStateinJanuary2009.Chineseofficialsnotedthattheresortborderedthe

twocommercialcitiesofAbainAbiaStateandOnitshainAnambraState,aswellasthe

yet-to–be-realisedOgutainlandport.Itsrevivalwouldhelptopromoteeffectivepatronage

andprovidejobopportunitiesforNigeria’steemingnumbersofunemployedyouth. 

InJuly2005astate-ownedcompany,GeneticInternationalCorporationofChina

(GICC),bought its firstconsignmentof100 000 tonnesof freshcassavachips from

Nigeria.Thisdealcontinuedoveraperiodofsixmonthsonamonthlybasis.GICChas

alsobeguntoimportcocoabeansandrubberdirectlyfromNigeria.Chinaalsoimports

sesameseedsfromNigeria.Therearecurrentlyover500Chineseexpertsandtechnicians

workinginvariousfieldsofagriculturein20Nigerianstates.

TwentyChinesecompaniesparticipatedinthe2007LagosInternationalTradeFair.

ParticipationofChinesecompaniesinthisimportantinternationaltradefairisanannual

ritual.Thevolumeof tradebetweenNigeriaandChina increased from$178million

in1996to$1.44billionin2001.Thisrosefurtherto$1.168billionin2002,$1.858

billionin2003,$2billionin2004andto$2.83billionin2007.ChinaisoneofNigeria’s

top-tentradepartnersandhasestablished30companiesinNigeria.Someoftheseare

solelyownedandothersarejointlyownedwithNigerians.Thesecompaniesareinvolved

intheconstruction,oilandgas,technology,andserviceandeducationsectorsofthe

Nigerianeconomy.Chinahassignedoilexplorationcontractsworthover$4billion.Its

involvementintheoilsectoristiedtoChinabuildingapower-generatingstationthat

wouldaddsubstantialmegawattstoNigeria’spowersector.

ChinahasalsoformedcollaborationswithNigeriathatcutacrossregionallines.In

July2011aNigerianenergyfirm,GlobalBiofuels,joinedanumberofChinesefirmsto

floatethanolrefineryplantsacrosstheWestAfricansubregionandtoexploreinherent

agriculturalpotential for fuel.Theproject,which is the first inAfrica,will cover a

landmassof97 500hectaresofland,ofwhich65 000hectaresisdedicatedtoNigeria.

Itsfirstphasecovers6 500hectaresandisduetocommenceintheEkitiStateinsouth-

westernNigeriabeforetheendof2011.Atfullimplementation,theproject’sestimated

outputwillbe1 950 000 tonnesofgrainperyearand60 000 tonnesofethanolproduced

fromthesugarystalkofsweetsorghum.Otherattendantbenefitsoftheprojectincludethe

productionof216gigawattsofelectricpowerandtheprovisionof8 000directjobsand

50 000indirectjobs.Itisexpectedtoreducegreenhousegassessignificantly.

Theproject’suniquenessliesinthediversityofactorsinvolved.Financingtheproject’s

totalcostof$183,367,333hasbrought togetheravarietyof stakeholders.Themain

contributingpartnersat70%areWEMETInternationalCompletePlantEngineering

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CompanyLimitedoftheGaungxiProvinceinChinaandCOZAInternationalLimited

ofHongKong.Otherstakeholders,witharangeofinterestsintheproject,includethe

governmentofEkitiStateofNigeria,AfricanFinanceCorporation,FirstBankofNigeria

Place, Nigeria Export–Import Bank, Access Bank Place and the African Biofuel and

RenewableEnergyFuel.41

NigeriaalsohasongoingarrangementswithChinaonitsrailways.TheManaging

Director forChinaGezhoubaGroupCorporation (CGCC)ProjectsNigeriaLimited,

ZhangJun,signedadocumentwiththeChairmanoftheNigerianRailwayCorporation

Board,BelloHaliruMohammed,onhowbothcountriescouldcollaborate furtheron

issuesrelatingtorestructuringNigeria’srailwaysystem.InJuly2011Nigeriasignedan

$874-millioncontractwiththeCCECCfortheconstructionoftheAbuja–Kadunarailway.

Toexecutethisproject,theNigeriangovernmentnegotiatedaconcessionaryloanof$500

millionwiththeChinesegovernmentataninterestrateofabout3%,whichistoberepaid

in15years.42

OfallChina’s interests inNigeria, itspredominant focus isoil.Thisresourcehas

beenattheforefrontofcontroversyinNigeria,largelybecausetheresourcehasbeen

mismanaged and the communitiesproducing it havepersistently complained about

neglect.ChinaandNigeriahavesignedseveraloildealsoverthelastfewyears.Themost

significantoftheseistheagreementthatinvolvedChinainvesting$4billioninNigeria’s

infrastructure in return for the first refusal rightson fouroilblocks in2008.43This

investmentinevitablyputChinaonacollisioncoursewithNigerianmilitantsfightingthe

Nigerianstateoverthemanagementofoilinthecountry’sNigerDelta.Onanumberof

occasionsChineseoilworkersweretakenhostagebymilitantsandultimatelyfreedafter

thepaymentofransoms.InSeptember2009theMovementfortheEmancipationofthe

NigerDelta(MEND)warnedChinesefirmsnottoinvestintheregionuntilpermanent

peacehadbeenachieved.ThiswasatthetimethatChina’snationaloffshoreoilcompany,

theChinaNationalOverseasOilCorporation(CNOOC),wasbiddingforthesix-billion

barrelsdeal,worth$30billion.MENDisquotedassayingthat‘theChineseshouldbe

carefulaboutinvestmentuntilthereisjusticeintheregion.Wecanguaranteethatifthe

governmentofNigeriafailstoaddresstherootissues,theChinesewillregrettheywere

negotiatingwiththewrongpeople’.44

Theperiod2004to2009witnessedsomemajorChinese investments. InJanuary

2006CNOOCacquireda$2.3billionmajoritystakeinAkpo,amajoroilfield.CNOOC

alsoacquireda45%stakeinOPL246,worth$2.7billioninoffshoredeepwateroilfields

operatedbyTotal, theFrenchoilgiant.This is reportedasCNOOC’s largest foreign

investment todate.CNOOCpaid$424million for financing, operating and capital

expenses.ItwasarrangedthattheprofitswouldbesharedwiththeNigerianNational

PetroleumCorporationonaratioof70:30infavourofCNOOC.CNOOCalsoagreedto

spend$2billiontobuildrefineriesanddownstreaminfrastructureinNigeria.

On 7 April 2011 the Nigerian Government signed a contract to rehabilitate the

2 110-kilometreEasternraillinewiththeCGGCandtwoothercompanies(ATurkish

firm,EsserContractingandIndustryLimited,andaNigerianfirm,LingoNigeriaLimited).

ThethreeEasternraillinesarethe463-kilometrelinefromPortHarcourttoMakurdi;the

1 016-kilometrelinefromMarkurditoKuru,withtheinclusionofthespurlinestoJos

andKafanchan;andthe640-kilometrelinefromKurutoMarkurdi.45

TradebetweenChinaandNigeriahasstrengthenedandaccelerated.From2009–10

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thetradevolumeincreasedby21.9%to$7.76billion,thehighestinhistory.Exports

fromNigeriatoChinasharplyincreasedby19.5%to$1.07billion.Interestingly,labour-

intensiveproductsnolongerformthebulkofexportsfromChinatoNigeria.Examples

ofthesearechemicalproductsandlocallyproducedproducts,whichhavelittleinfluence

onlocal industriesandemploymentofNigerians.Incontrast,exportsofqualityand

technologicalgoodshaveincreased.AsatMarch2010mechanicalandelectronicproducts

accountedforatleast60%ofChina’stotalexportstoNigeria.46

BothChinaandNigeriaareworkingtoimproveandmaintaingoodstandardsinthe

servicesrendered.TheChineseembassyinNigeriahasbeenconsistentinitseffortsto

workcloselywithorganisationsliketheStandardsOrganisationofNigeria(SON)and

NAFDAC. SON and the General Administration of Quality Supervision, Inspection

and Quarantine of China are currently negotiating the Industry Product Inspection

CooperationAgreement.

InFebruary2011historywasmadewhentheNigeriangovernmenthandedoverthe

OlorunsogopowerstationintheOgunStatetoaconsortiumledbySepcoIIIElectric

PowerConstructionCorporationofChinaanda localcompany,PacificEnergy.This

was the firsthandingoverunder theadministration’sPowerRoadmap.Thehanding

overofthestationstemmedfromNigeria’sinabilitytorepaytheloanprovidedbythe

Chinesegovernmentfortheconstructionoftheplant.Chinaprovided65%ofthefunding

requiredforthe335-megawatt-capacityOlorunsogoplantandthe335-megawatt-capacity

OmotoshopowerstationinOkitipupa,OndoState.Theloanwasprovidedthroughthe

contractorsfortheprojects.ThesewereSepcoIIIElectricPowerConstructionCorporation

fortheOlorunsogoplantandChinaNationalMachinery&EquipmentImport&Export

CorporationfortheOlorunsogoplant.

WhentheNigeriangovernmentfailedtorepaytheloansforthetwoplants,theChinese

contractorsweresaidtohaveleftNigeriawiththemanualsandotherdocumentsrelating

totherunningoftheplants.ThefewdocumentstheyleftbehindwerewritteninChinese.

Interestingly,thisresponsewasseenasunderstandablebytheNigeriangovernment.The

MinisterofStateforPower,NuhuWya,notedthattheChinesehadactedassuchbecause

‘acontractorwhoisbeingowedwillguardjealouslyhisfallbackposition’.Therearealso

ongoingdiscussionswiththecompanythatbuilttheOmotoshostationtotakeoverthe

management.47

In the past existing banking links between Nigeria and China have been on a

comparativelylowscale.Morerecently,ChinahasincreaseditsinvolvementinNigerian

banking,especiallyfollowingNigeria’sreformsofthesector.Broadly,thebankinglinks

form twocategories.These areChinesebanks sponsoringdevelopment activities in

Nigeriaandlinksbetweenthecountries’commercialbanks.Underthefirstcategory,a

numberofChinesebankshavebeeninvolvedindevelopmentactivitiesinNigeria.In

2006ChinaDevelopmentBankgave$20 millioninfinancialsupporttoNigeria’sReliance

TelecommunicationsLimited.China’sEximBank is involved in thedevelopmentof

Nigeria’soilfacilitiesrailway.

Thesecondcategory,whichisthelinksbetweenthecountries’commercialbanks,

comprises the activities of Chinese individuals and activities between China and

Nigeria’scommercialbanks.TherearesomeChineseindividualswhohavesignificant

financialinvestmentsinNigerianbanks;onesuchindividualheldastakeofupto5%

inoneofNigeria’smajorbanksinNigeria.ThreeNigeriancommercialbanksareknown

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tohaveestablishedlinkswithChina.ThefirstoftheseisNigeria’soldestbank,First

Bank,whichwasgrantedalicencetooperateinChinain2009.Thisdevelopmentgave

FirstBankafootholdinAsia.FirstBankhasalsodevelopedbankingrelationshipswith

Chineseinstitutions.ThisincludesanMOUwithYuemeiGroupCompanyLimited,a

textilemanufacturingfirmwithavalueof$50million;apartnershipwithShenzhen

EnergyInvestmentCompanyLimited(ShenzhenEnergyGroup) inthebuildingofa

3 000-megawattgasturbinepowerplantinNigeria,worth$2.4billion;andanMOU

withanotherChinesefirm,GuangdongXinguangInternationalChina–AfricaInvestment

Limited,fora$500-millioninvestmentinOgunState,Nigeria.TheGuangdongXinguang

Group’scollaborationwithFirstBank is in theareasof investmentbanking,project

financing,businessadvisoryservicesandcorrespondentbankingrelationships.FirstBank

alsohasanMOUwithChinaConstructionBanktocoverglobalbankingcollaboration.

StandardIBTCisanotherbankthathasestablishedbankinglinkswithChina.48The

bankhaslinkswiththeIndustrialandCommercialBankofChina(ICBC),andwasvisited

inMarch2010bytheICBCchairman,JiangJianqing.TheICBChasacquireda20%stake

intheStandardBankGroup,thebankinggrouptowhichStandardIBTCNigeriabelongs.

TheICBC’sinvolvementinStandardIBTChasenabledtheICBCtobecomeinvolvedin

anumberofothereconomicinterestsinNigeria.ThevisitalsogaveNigeria’sfinancial

sectortheopportunitytoshowcasethecountryandtodemonstrateNigeria’smannerof

operatingtotheChinese.

AthirdbankthathasestablishedlinkswithChinesebanksistheNigerianExport–

Import Bank, which is at the core of Nigeria’s trade-oriented activities. It provides

short-termguaranteesforloansgrantedbyNigerianbankstoexportersandofferscredit

insuranceintheeventofnon-paymentbyforeignbuyers.Thebankhasheldhigh-level

talksandmadeagreementswithChinesefinancialinstitutionssuchasChina’sEximBank.

TheselinksfurtheropenChinatootherexistingopportunitiesinNigeria’sbankingsector.

InMarch2011China’sEximBankgranteda$30-milliontradefinancefacilitytoAccess

BankPlace.Thefacilitycoverslettersofcreditandexportcreditguarantees.49

Cultural relations

CulturalcontactsbetweenNigeriaandChinahavebeenontheincrease.ManyNigerians

acknowledgethecountry’slong-termlinkswithChina,andthepresenceofahugeChinese

communityinNigeriahashelpedtodeveloprelationsbetweenthecountries.Thereare

alsomanyNigerianswhohavetravelledtoandlivedinChina.Ontheirreturn,anumber

ofthesehaveheldimportantpoliticalpositionsandhavebeenstrongadvocatesofChinese

valuesinNigeria.50NigeriansarealsotryingtomakeinroadsintoChinesesocietyinsome

unusualways.OnesuchexampleisEmmanuelUweche,whoisbecomingahousehold

nameinChinaasapopstar.AsthefirstAfricantoreachalevelofsuchrecognitionin

China,UwechesingsinMandarinunderthestagenameHaoGe.51

A l l I A N C e S A N d R I v A l R I e S A m o N g t h e b R I C S F o R N I g e R I A ’ S m A R K e t

BecauseofthenatureandextentoftheirrelationshipwithNigeria,itisinevitablethatall

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theBRICsshouldbeinvolvedinsomeformofrivalry.Someoftheserivalrieshavealso

arisenbecauseofNigerianauthorities’fluidandsometimesincoherentpolicyregulations.

Ofthefourcountries,BrazilseemstohavetheleastlinkswithNigeria.Asdiscussed,

thecountryhasneithertheextensiveoillinksofChinanorthewidecontrolofIndia’s

retailbusiness.Russia’spositionissomewhatcomparabletoBrazil,andthetwocountries

haveexperiencedrivalryinareasinwhichtheyshareacommoninterest.Thismaybe

attributedtoalackofclarityfromNigeria;ortothebeliefheldbyalltheBRICsthat

theycanexploittheweakstructuresinNigeriatofurthertheirgoalsinthecountry.One

exampleofthisisworthrecordinghere.WhentheNigeriangovernmentcalledforthe

submissionoftheExpressionofInterests(EOIs)forcompaniestoacquireamajoritystake

inNigeria’selectricityinfrastructureinDecember2010,331localandforeigncompanies

submittedEOIstotheBureauofPublicEnterprises(BPE)bythedeadlineof4March

2011.Brazilianfirm,PROINFRA,offered$100billionforamajoritystakeinall23power

plantsslatedforprivatisation.However,itsofferwasdeliveredoutsidetheBPEprocess

ofEOIs.Onthetransmissionside,PowerGridCorporationofIndiaLimited(PGCIL)

saiditwouldsubmitarevisedofferforthemanagementofNigeria’selectricitygridtobe

constructedatacostof$3.5billion.However,thePROINFRAofferwasnotpartofthe

interestexpressedtotheBPEbytheother331companies.India’sEssarandTataGroup,

aswellasContour-GlobaloftheUSwereamongthe331companiesjostlingforamajority

stakeinthepower-generatingcompanies.TheBPEhadrevealedthat174applicationswere

receivedforthefourthermalstationsandtwohydrostations;while157otherapplications

expressed their interest in acquiring the11distributioncompanies.Essar expressed

interestininvesting$2billionforageneratingcapacityofatleast2 000megawatts,an

equivalentoftwo-thirdsofthecurrentaverageelectricityoutput.Between13and20

December2010,BPEpublishedadvertorialsinlocalandforeignmediainvitingprospective

coreinvestorstoexpressinterestinthe11distributioncompaniesunbundledfromthe

PHCN.Italsoinvitedprospectivecoreinvestorstoexpressinterestinthefourthermal

powerstationsasconcessionariesforthetwohydropowerstations.Theinitialdeadlinefor

thereceiptofEOIswas18February2011,butthiswasextendedto4March2011.

InMarch2011,PGCIL said itwould submit a revisedoffer for themanagement

of Nigeria’s electricity grid. The Indian state-run power giant was among the three

companiesshortlistedbytheBPEduringa2007biddingroundforthemanagementofthe

TransmissionCompanyofNigeria.Underthepowerroad-map,electricitygenerationand

distributionwouldbeprivatised.Nigeria’sfederalgovernmentwouldcontinuetoownthe

nationalgridbutitsmanagementwouldbeprivatised.PowerGridCorporationwonthe

bidin2007,butthedeal,whichwassubjecttotheapprovaloftheNCP,wasdelayeddue

tothenon-implementationoftheNigerianElectricityRegulatoryAct,whichwaspassed

in2005.

InMarch2011theNigeriangovernmentrejectedtheBrazilianofferof$100billionto

managethe23powerplants.ThegovernmentsaidthatnofirmoutsidetheBPEadvertised

processwouldbeconsideredforparticipation.SincetheBrazilianfirmhadcontactedthe

NigerianMinistryofMinesthroughtheNigerianEmbassyinBrazil,itwassaidthatthe

firmhadnotcompliedwiththeregulations.

AlthoughbothIndiaandChinaareinvolvedinextensivetradelinkswithNigeria,

therearefewareaswherebothareinvolvedinsimilarenterprises.Chinahasnotbeen

deeplyinvolvedinfisheries,banking,moviesandentertainment,northecrucialarea

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oftelecommunications.TheseareasareIndia’smajorstrengths.Foritspart,Indiahas

not been deeply involved in enterprises like satellite co-operation and agricultural

co-operation–areaswheretheChinesehaveconsiderableadvantage.Indeed,itwould

seemthattheonlyareaswherebothcountrieshaveshownsimilarlevelsofcommitment

areoilandgasandmanufacturing.

IndiahastwomajoradvantagesoverChina.Thefirstisthatoflanguage.AsanEnglish-

speakingcountry,itismucheasierfortheIndianstopenetrateNigeria’slocalmarket

thantheChinese,whooftenareunfamiliarwithEnglish.India’ssecondadvantagelies

inbusinessdealingsandthelongevityofitsrelationswithNigeria.SinceIndiahasbeen

tradingwithNigeriaforoveracentury,thecountriesseemtohavemasteredthetricksof

survivalinthemurkybusinessofrelatingwithNigerians.China’srelationswithNigeria

arecomparativelyrecentandunderdevelopedcomparedwiththoseofIndia.

China’sadvantageoverIndiaarises fromthemassiveextentof its involvement in

NigeriaandtheamountofmoneyitpumpsintoNigerianbusiness.Itssecondadvantage

isitsentrenchmentinmanyAfricancountries,especiallyinstrategicresourceslikeoil.

Chinahasdevelopedasoundunderstandingoftheintricaciesinthepoliticsofoilandcan

drawfromitsknowledgeofandexperiencesinothercountries.

ItwouldseemthatIndiarealisesitslimitationsintryingtocompetewithChinain

Africa,especiallyas it lacks the financialmuscleanddiplomaticpowers thatBeijing

possesses.Inresponse,IndiahastargetedspecificareasofinterestinNigeriaandremained

focusedwithoutengaginginanyoutrightcompetitionwithChina.Indiahasalsoworked

onensuringsounddiplomacyinitsrelationswithNigeria,inanattempttoavoidthe

kindofcontroversyChinaseemstohavecourtedindealingwithAfricanleaderswith

questionablecredentials.

NigeriahassignedacontractwithbothIndiaandChinatodevelopitsrailways.As

oneofitsmethodsofrepaymentforoilblocks,India’sOMELagreedtobuildanEast–

West railway.Nigeria’s$6-millionagreementwithChina’sCCECC involvedChinese

expertsrehabilitatingtheexistingrailnetwork,supplying50locomotives,150coaches,

400wagonsand20railbuses,andprovidingtechnicaltrainingfortheNigerianRailway

Corporationstaff.

OnecommonlinkthatIndiaandChinahaveisthesuspicionthatbothcountriesare

becominghavensforNigeria’smoney,stolenbythecountry’spoliticalelite.WithWestern

banksbecomingmorecriticaloverforeignlodgementsofmoney,themorepermissive

IndianandChinesebanksnowseemtobethehavenforlootedtreasurymoney.

t h e b R I C S I m P A C t o N t h e N I g e R I A N P e o P l e

ThecloseandextensivelinksbetweenNigeriaandBrazilandthosebetweenNigeriaand

RussiahavehadlittleimpactonNigerianpolitics.Thisislargelybecausemostofthe

relationswereconductedatgovernmentlevels,withfewactivitiespercolatingtothelocal

population.Indeed,unlikethecasesofChinaandIndia,fewNigeriansknowmuchabout

theactivitiesandeventhepresenceofBraziliansandRussiansinNigeria.MostNigerians

only associateBrazilwith football, and this is limited to the activitiesof individual

Brazilianplayers;andassociateevenlesswithRussia.Thereisanegligiblenumberof

BrazilianorRussiancompaniesinNigeriathatmayhaveemployedNigerians,fromwhich

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theirtreatmentofNigerianstaffcouldbemeasured.TherearealsofewBrazilianand

RussiangoodstorivalNigeriancommodities.Consequently,Nigerianshavenogrounds

forcomplaintsabouttheactivitiesofBrazilorRussiainthecountry.

ThesamecannotbesaidoftheIndiansandChinese.FormostNigerianelites,India

isjustanotherimportantcountrywithextensivediplomaticandcommerciallinkswith

Nigeria.ItisalsoapreferredlocationforNigerianelitestoundergomedicaltreatment.

However,thereisabeliefthatmanyofthosewhohavegonefortreatmentinIndiaoften

dieshortlyaftertheirreturntoNigeria.52Closelyrelatedtothisistheimpressionmany

NigerianshavethatmostfakedrugscomingintoNigeriaoriginatefromIndia.Although

thishasbeendisproved,theimpressionseemstohavebeenfixedinthemindsofmany

Nigerians.Indeed,aNigerianundergraduatemadeasweepingstatementthat‘fakedrugs

arefromIndiawhilefakegoodsarefromChina’.53

IndiansinNigeriaareoftenratedaspooremployers.AlthoughNigeriancivilsociety

groupshavenotforcefullycriticisedIndians,subtlecomplaintsaboutthemhavebeen

made. An official of the Federal Ministry of Commerce interviewed for the paper

confirmedthatIndiancompaniesareoneofthehighestemployersofNigerianlabour.

IndianshavemadethelargestimpactintheNigerianretailmarket.Owingtothenature

oftheretailenterprise,ithasalsoformedthebasisaroundwhichmanyNigerianshave

formedtheiropinionsaboutIndians.Therearetwobasicopinionsabouttheseemployers.

Thefirstisthattheyoftenmistreattheirstaff.Someofthestaffcomplainedthattheyare

overworkedandunderpaid.Therearealsocomplaintsofpsychologicalabuse.Itmust,

however,besaidthatthesameallegationislevelledagainstmostAsianemployersinthe

country.Further,theFederalMinistryofCommercepointedoutthattheyrarelyreceive

officialcomplaintsaboutIndiancompaniesovermistreatmentofNigerianstaff.

Complaintsofpoortreatmentaremoreprevalentamongthoseworkingatthelower

levelsinretailshops.Therearefewcomplaintsamongthosewhoareengagedatmore

seniorlevelsinkeyIndiancompanies.54TherehavealsobeenallegationsthatIndian

familiesmistreattheirdomesticstaff,particularlyfemalestaff.Besidesmanyofthese

peoplebeingoverworked,thereareclaimsthatsomearesexuallyabused.55

Finally, someNigeriancivil societygroupsbelieve that Indianbankshave joined

banksinWesternEuropeancountriesandtheUSwherethecorruptNigeriangovernment

officials have put their stolen wealth.56 Although Nigerians do not hold the Indian

governmentresponsiblefortheNigerians’corruptactivities,theyareunhappythatthe

Indiangovernmentisdoinglittletocondemnthepractice.

ChineseactivitieshaveattractedtheattentionofNigeriansinthreedifferentways.

ThefirstistheperceivedqualityofgoodscomingfromChina.Thereisawidelyheld

assumptionthatChineseproductsareofverylowqualityandthatpeopleinsearchof

durableproductsshouldavoidthem.ThisisanissuethatChineseofficialsinNigeriafind

mostobjectionable.TheyclaimthatcheapproductsentertheNigerianmarketbecause

NigerianbusinessmenoftentraveltoChinawithaspecificrequestforlow-qualityproducts

inordertomaximisetheirprofits.FewNigeriansareawareofthisandendupwiththe

impressionthatChineseproductsareoflowqualityingeneral.Thesecondconcernhas

todowiththewaytheChinesetreattheirNigerianworkers.Manyworkerscomplainthat

theyarenotwellpaidandthatthedemandsonthemareenormous.Somecomplainthat

theChinesetendencytopayinadequatewagesisbeingexportedtoNigeria.Therearealso

thosewhocomplainofunfairdismissalandverbalabusefromtheirChineseemployers.

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Finally,ChinaisaccusedofunderminingNigerianmarkets,especiallyitsclothingmarket,

withtheinfluxofcheapproductsfromChina.Thisseemstobeacomplaintthatfollows

ChinaacrossAfricancountries.

C o N C l u S I o N

Nigeria’s relationship with the BRICs is as complex as it is extensive. It is also a

relationshipthatgovernmentsonallsidesconsidermutuallybeneficial,evenifNigerians

aresometimescautious.Increasingly,however,westerncountriesthathavebeenunseated

bytheemergingpowersarepoisedforacomeback.DuringavisittoNigeriainJuly2011

UKPrimeMinister,DavidCameron,madeitclearthatChina’sinterestinthecountryisa

causeforconcern;andthatitwashisintentiontoensurethattheUKrivalstheBRICsin

tradewithNigeria.Thecomingyearsarelikelytoseegreaterfriendshipsdevelopbetween

NigeriaandtheBRICs.However,Nigeria’sinclusionintheleagueofemergingnations

seemsanimportantgoalforthecountry.ThiswouldseetheacronymBRICS(following

SouthAfrica’sinclusioninApril2011)beingamendedtoBRINCS,tobringonboard

Nigeria.

e N d N o t e S

1 Rochester:UniversityofRochesterPress,2007.

2 Oxford:OspreyPublishingCompany,2005.

3 Aldershot:AshgatePublishers,1996.

4 London:BritishAcademicPress,1994.

5 Co-authoredwithJohnMackinlayandFunmiOlonisakin.Tokyo:UnitedNationsUniversity

Press,1999.

6 Co-editedwithAdebayoOyebede.Trenton:AfricanWorldPress,1998.

7 FormoreontheoverallactivitiesoftheBRICsseeAldenC,China in Africa.London&New

York:ZedBooks,2007;RotbergRI(ed.),China into Africa: Trade, Aid and Influence.Cambridge,

MA:WorldPeaceFoundation,2008;TaylorI,China and Africa: Engagement and Compromise.

London&NewYork:Routledge,2006;ZhaoS(ed.),Chinese Foreign Policy: Pragmatism and

Strategic Behaviour.NewYork&London:MESharpe,2004;RaineS,China’s African Challenges.

London:IISS(InternationalInstituteforStrategicStudies),2009;BrainardL&LMartinez-

Diaz(eds),Brazil as Economic Superpower? Understanding Brazil’s Changing Role in the Global

Economy.Washington,DC:BrookingsInstitutionPress,2009;WintersAL&SYusuf,Dancing

with Giants: China, India and the Global Economy.Washington,DC:WorldBank,2007;Letiche

JM,Russia Moves into the Global Economy.London:Routledge,2007;OECD(Organisaton

forEconomicCo-operationandDevelopment),Globalisation and Emerging Economies: Brazil,

Russia, India, Indonesia, China and South Africa.Paris:OECD,2009;SujathaB,BRIC Economies:

Opportunities and Challenges (Brazil, Russia, India and China).Hyderabad:ICFAIUniversity

Press,2006.

8 AsrecentlyasJune2011,theAmericanSecretaryofState,HilaryClinton,declaredduringa

visittoLusaka,Zambia,thattheUSisdisturbedatthewaysinwhichChinaisconductingits

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activitiesinAfrica.ShestatedthattheUShadstarteddiscussionswithZambiaaboutwhatit

seesasthenegativeconsequencesofChinesepoliciesinthecontinent.

9 FormoreontheNigeriancivilwar,seeDeStJoreeJ,The Nigerian Civil War.London:Hodder

&Stoughton,1972.

10 Formoreonthis,seeAlaoA,Natural Resources and Conflict in Africa: the Tragedy of Endowment.

Rochester:UniversityofRochesterPress,2007.

11 Keyofficeholdersinthecountry,includingtheInspectorGeneralofPolice,StateGovernor,

bankingexecutivesandheadsofmajorfederalparastatalhave,atdifferenttimesinrecent

years,beenjailedforcorruption.TherearecasesbothwithNigeriaandEuropeofformerkey

politiciansaccusedofgraft.

12 ThefieldworkforthisstudywasconductedduringtheApril2011electionandtheauthorwas

abletoobserve(unofficially)theelectionsinsomeofthestates.

13 TheNigerianarmedforceshavetakenpartinseveralpeacekeepingmissions.Theseinclude

thoseinLiberiaandSierraLeone,wherethecountryleadsuccessfulregionaloperationsthat

addressedbittercivilconflicts.

14 Ofthe34Brazilianembassies inAfrica,16wereestablishedduringtheadministrationof

PresidentDaSilva.

15 LohorJ,‘Nigeria,BrazilSignBilateralAgreements’,This Day Online,Nigeria,6September2005.

16 Ibid.

17 See‘PressreportfromGroupof15:Thesummitlevelgroupofdevelopingcountries’,Geneva,

November/December2006.

18 ItwascalculatedthattheMambillaProjectinthecountry’snorth-easternstateofTarabawill

generate2 600megawattswhencompleted.

19 TheSouthAtlanticPeaceandCooperationZonewascreatedin1986throughaUNResolution

andisaimedatpromotingco-operationandpeaceintheregion.

20 SeeAlukoO,Essays on Nigerian Foreign Policy.London:GeorgeAllen&Unwin,1981.

21 SeeNigerian Newspapers World,‘LowtradevolumewithNigeriaworriesRussia’,13June2011,

http://www.nigeriannewspapersworld.com/plus/view.php?aid=3954.

22 ThelaunchingofNigeria’snationalsatellite,whichstarteddevelopmentinNovember2001,

waspostponedinJuly2003becausetheRussianSpaceAgencyhadtolaunchamilitarysatellite

duringthatperiod.NigeriaSat-1isoneoffivesatellitesthatwillmakeupanetworkknownas

theDMC.

23 Formoreonthis,seeKuraSB,‘Nigeria–Indiaeconomic,politicalandsocio-culturalrelations:

Criticalreflectionsforcontinuousmutualco-operation’,International Journal of African Political

Studies,5,1,2009,pp.1–31.

24 Figures obtained from the Indian High Commission in Nigeria. Indeed, a Nigerian is a

prominentmemberofoneofthemajorfootballclubsinIndia.

25 IndianHighCommission,Nigeria.

26 Ibid.

27 SeeThe Economic Times,‘40firmstakepartinIndianpharmaexhibitioninNigeria’,24March

2011.

28 Nigeriannaira.

29 EdomaruseC,‘LifeimprisonmentforIndianshippingfakedrugstoNigeria’,This Day,30

March2011.

30 ChimaO,‘ECOMANKpartnerAirtelonmobilebanking’,This Day,Lagos,7June2011.

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C H I N A I N A F R I C A P R O J E C T

31 OsuagwuP,‘Newinvestors,Zen,locatesNigeriawithsixmobilephones’,This Day,Lagos,15

April2011.

32 GesindeS,‘DanaMotorspartnersaffordablecarsforKiadealership’,Saturday Tribune,Lagos,

19March2011.

33 OsagieC,‘Notore,IndiangiantTatainlandmarkchemicaldeal’,This Day,Lagos,14April

2011.

34 The Economic Times,‘NTPClookingtorevisitproposalforNigeriaventure’,13February2011,

http://articles.economictimes.indiatimes.com/2011-02-13/news/28539623_1_trincomalee-

region-coal-and-gas-based-power.

35 FiguresobtainedfromtheIndianHighCommission,Abuja,Nigeria,16March2011.

36 In2005theOVL,UK-basedEquatorExplorationandNigeriancompanyOwelE&PLimited

hadmadethewinningofferofapproximately$175millioninsignaturebonusforBlock321

and$310millionforBlock323.KNOCexercisedarightoffirstrefusal,whichithadobtained

inlieuofdownstreaminvestmentcommitments.

37 Itwaslaterdiscoveredthatoneoftheblocks(275)maynotbelucrative.

38 For example, there is a general impression that corruptionhaspercolated all aspectsof

Nigerianeconomicandpoliticallife.Mostindexesoncorruptionratethecountryasoneof

themostcorruptintheworld.TheTransparencyInternationalCorruptionPerceptionsIndex

for2009rankedNigeria130thoutofthe180countriessurveyed.

39 AkeyareawhereNigerianeedsChina’ssupportisinitsbidforapermanentseatintheUN

SecurityCouncil.Beijinghaspromisedtoprovidethissupport.

40 OsagieC,‘Nigeria–Chinatradehits$7.76billion’,This Day,Lagos,5April2011.

41 ABREC,pressrelease,http://www.faber-abref.org/fichiers/Press_release_ABREF_GLOBAL.pdf,

accessed15June2011.

42 OchayiC,‘Federalgovernmentunveils25yearsdevelopmentplansfortherailway’,Vanguard,

28July2011.

43 HurstC,‘China’soilrushinAfrica’,Institute for the Analysis of Global Security,July2006,p.11.

44 OriKO,‘Nigeria:WillChina’soilfirmbedifferentinoperationsintheNigerDelta?’,Afrik

News,2October2009,http://www.afrik-news.com/article16239.html.

45 OdogboD,‘FederalGovernmentFirmssignEasternRailContract’,This Day,Lagos,8April

2011.

46 Pressinterview,RongYansong,EconomicandCommercialCounselloroftheChineseEmbassy

toNigeria,11March2011.http://ng.china-embassy.org/eng/xw/t771224.htm,accessed15July

2011

47 AlikeE,‘FederalgovernmentcededOlorunsogopowerplanttoChinesefirm’,This Day,Lagos,

16February2011.

48 ThisbankwasestablishedthroughamergerbetweenStanbicBankofNigeriaandindustry

giantChina’sIBTCCharteredBank.

49 ChimaO,‘Accessbankgets$30mfinancingfromChinaEximBank,This Day,Lagos,22March

2011.

50 OneoftheseisHonourableOjo,aformermemberoftheFederalHouseofRepresentativewho

attendedaconferenceorganisedbytheSouthAfricanInstituteofInternationalAffairsandthe

CentreforDemocracyandDevelopmentinAbuja,May2011.

51 WangJ,‘NigerianfindspopstardominBeijing’,New York Times,11March2011.

52 ANigerianseniorcivilservantnotedthatthreeofhisfriendsdiedaftertheyhadundergone

medicaltreatmentinIndia.However,headmittedthathewasunsurewhetherthiswasasa

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resultoftheseverityoftheirconditionorthequalityoftheIndianmedicaltreatment.This,of

course,isaperceptionissue,butitisworthrecordingwhatsomeNigerianelitesthinkabout

thesubject.

53 Personalinterview,FemiEyiowuawi,UndergraduateofObafemiAwolowoUniversity,Ile-Ife,

Nigeria,19December2010.

54 Forexample,theauthor’sdiscussionswithaNigerianstaffmemberin‘ParkandShop’,an

Indianretailshop,andaNigerianseniorstaffmemberofDanaAirlinesshowthesedifferent

perceptionsofIndiansasemployersinNigeria.

55 Anacademicwhoislookingatthesubjectofsexualabuse,DrOlutoyinMejiuni,claimedthat

therehavebeenfewcasesofsexualabusereportsofdomesticstaffbyIndians.Shepointedout

thatotherforeignnationalsarealsoinvolvedinthispractice.

56 TheformerAmericanambassadortoNigeriaalsopointedthisoutinapublicinterviewin

December2010.WiththeincreasingclampdownonmoneylaunderinginEuropeandthe

US,IndiaandChinaarebecomingsafehavensforNigerianswhohavelootedtheircountry’s

treasury.

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