The Political Economy of China’s Investment in Nigeria

Abstract

In the last few years, there has been a significant increase in the number of Chinese businesses operating in Nigeria. The transition to civil rule in 1999 and the eventual consolidation of a liberalized economy by successive administrations have resulted in the signing of several business deals with the Chinese government and Chinese enterprises. In line with the Federalist structure of the Nigerian government, many of these new enterprises have arisen from collaborations between Chinese companies and state and local governments in Nigeria. While central government efforts to shift the economy away from oil dependency have largely failed, state and local governments, at least on the surface seem committed in working with Chinese firms to increase investment in enterprises that will help generate a growth-oriented diversified economy. However, Chinese interests in Nigeria appear to continue to focus on oil extraction and related industries. Among other things, this chapter will look specifically at the construction of a Free Trade Zones in Lagos and Ogun States with emphasis on evaluating the extractive practices within these two zones. The chapter will focus on documenting and assessing the nature and impact of Chinese investment projects in different regions of Nigeria to see if the shapes of Chinese projects are in the image of Prometheus or Leviathan.

Assessment of the (Inter) Dependency of Economic Relations Between Nigeria and China: 1999-2019

“…Thus, since 1999, the two countries have signed several diplomatic agreements. These include agreements in trade and investments; on consular matters; cooperation against illicit trafficking; exchange of notes on the provision goods and an agreement on tourism cooperation (Alao, 2011;Bukarambe, 2005;Toogood, 2016;Utomi, 2008;Adunbi & Stein, 2019). Also, various technical assistance in the military, education, health, and technology have been received by Nigeria.…”

“…Indeed, Chinese companies have increasingly been investing in Nigeria. For instance, as of 2016, there were 308 registered Chinese companies in Nigeria in various sectors of the Nigerian economy (Adunbi & Stein, 2019). Also, in a space of five years between 2010 and 2015, Nigeria was the fourth-highest recipient of loans from China in Africa (SAIS-CARI, 2018).…”

“…Also, many Chinese-owned companies are operating in Nigeria across a range of industries, including fabrication, communication and information technology, textile manufacturing, and household consumer goods. These companies are either fully owned by Chinese investors or owned in partnership with Nigerian investors, and usually operating from free-trade zones 9 (Page, 2018;Adunbi & Stein, 2019).…”

Drivers and Impacts of China’s Economic Engagements in Nigeria: Focus on Infrastructures Investment

“…However, it was recommended that Intelligence sharing, working-level communication, risks clouding are future policy decisions for a more secured and stable relationship. Adunbi and Stein (2019) submitted that there has been a recent significant increase in Chinese businesses operating in Nigeria especially in the post military rule from 1999. Discussing on "The Political Economy of China"s Investment in Nigeria: Prometheus or Leviathan?…”

“…Wenjie (2015) and (Page, 2018) submitted that China"s relationship across African state and Nigeria has led to an inattention to human rights considerations, isolation of rogue governments and support of dictators, and corruptions of repressive regimes and indirectly fueling criminality in Nigeria. However, (Adunbi & Stein, 2019) conversely asserted that Chinese and Nigerians collaboration has led to new enterprises across states and local governments, improvement in social and economic infrastructure and skill transfer etc., in Nigeria.…”