China’s Presence in Nigeria

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Nigeria’s foreign relations
The foreign relations between China and Nigeria
Case study: China’s presence in Nigeria
Recommendations and Conclusions
Reference list

Introduction

Nigeria is a federal republic and it should be known that the country has 36 states with the capital city in Abuja. As a matter of fact, Nigeria is located in West Africa where its neighbors are Niger, Benin, Cameroon and Chad. The country has three influential ethnic groups and this is the diversity and pride that every nation enjoys. These notable ethnic groups are the Yoruba, Hausa and Igbo. In this case, the country is roughly split between Christians and Muslims (Toyin, 1999, p. 13).

In addition, there are other people who are still practicing traditional religion and this is acceptable in such a populous nation. The nation has an extensive history that can be dated back to 9000 BCE. This is as far as human habitation in the area and country is concerned. There has been an argument that the original homeland of Bantus is located in Nigeria. This is somewhere between the Cross river and Benue.

It should be known that Nigeria as a nation derives its name from river Niger. In addition, it is the most populated African country besides being ranked position seven in the world as far as populous nations are concerned. Nigeria is mostly composed of blacks who form majority of the population (Suberu, 2001, p. 9). As much as the country is a member of the commonwealth nations, it has one of the fastest growing economies in the world and this is encouraging news.

The international monetary fund has been ranking the country well as far as economic growth rates are concerned and this trend is expected to pick up as time goes by through good and effective policies. The country gained independence in 1960 and the first government was formed through a coalition of parties.

The country has been faced with a lot of ethic and political differences largely because of its large ethic groupings. As a matter of fact, there was an imbalance because of various issues that were created by the plebiscite of 1961. All along, the country has been synonymously known for its troublesome military era that started with the oil boom that was witnessed in the 1970s when it officially joined OPEC (Ake, 1996, p. 23). The country is an oil producing nation and this has been the source of most oil conflicts.

In early years, there was an argument that most billions of dollars were finding themselves in government hands at the expense of the population. There have been a lot of military cops in the country until 1998 when Olusegun Obasanjo was elected as president. As much as there is an attempt towards democracy, the strides have been slow but more should be done.

The oil producing Niger Delta has witnessed a lot of ethic tensions and this is mostly because of this vital resource. The country has faced a lot of issues that revolve around inadequate infrastructure and other pressing needs. All along, the nation has been an important center for biodiversity and this will continue to be capitalized on for long term sustainability (Levy, 2004, p. 18).

The Niger delta has experienced a lot of environmental problems that have in most occasions been neglected. This is as far as oil spills are concerned and it is assumed that such issues have warranted the conflict. Petroleum plays an important role in the country’s economy although there are other sectors that have also played a crucial role.

And in the recent past, there has been increased involvement of most Chinese firms in the exploitation of oil across Nigeria. Additionally, most of these Chinese firms have gained the favor of the Nigerian government in terms of winning various developmental contracts particularly in general infrastructure all over Nigeria. To this end, one is left wondering how these increased foreign relations between Nigeria and China are bound to influence international relations between Nigeria and other neighboring and foreign countries.

Here, it is worth noting that many countries have held the relationship between China and Nigeria with a lot of skepticism considering that China is a fast growing economy, and thus, most people feel that China is out to establish a permanent oil supply out of this relationship. Subsequently, this research paper looks at the foreign relations between Nigeria and other countries with a keen interest on how these relations have changed over the years particularly with the presence of China in Nigeria.

As a result, the paper presents the relations between Nigeria and other African countries before looking at its international relations with other foreign countries. Overall, the paper considers the impact created by the presence of China in Nigeria in the hope that major differences will be noted in terms of foreign relations between Nigeria and other countries because of the threat caused by the Chinese currency in the Nigerian market.

Nigeria’s foreign relations

Studies show that after gaining independence, Nigeria embarked on a unique foreign policy of restoring Africa’s dignity. As a matter of fact, the nation played a big role in the fight against apartheid in South Africa. Nigeria has been enjoying good relations and the most notable one was with Israel in the early years of 1960 (Levy, 2004, p. 32). This has been the most notable exception of the country’s foreign policy and this can not be ignored in any case.

As a matter of fact, Israel was very instrumental in overseeing the reconstruction of the country’s infrastructure like the parliament buildings. It should be known that the country was able to emerge from its own civil war with a good and focused foreign policy. In the 1970s, its foreign policy was tested because of the ongoing liberation struggles that were going on in different countries.

Here, it is certain that Nigeria contributed large sums of money to various liberation struggles that were on-going in different African countries. And just to show how strategic Nigeria has been on African affairs, it is notable that the country was instrumental in the formation of the organization of African union (OAU). Moreover, the country has a lot of influence on African issues and most notably in West Africa where it dominates its affairs.

Additionally, Nigeria is a member of the United Nations where it has participated in various efforts and initiatives inside and outside Africa (McGreal, 2007, p. 19). On the other hand, the country is a major oil producer and this is why it has maintained vicissitudinous relations with many developed countries like the U.S., China, and other developing nations like Ghana. As a result, the international relations between Nigeria and other countries have been centered on various issues as time goes by.

Here, studies note that Nigeria as a nation has a lot of immigrants in other countries and this number increased when the country was facing economic hardships and civil wars. This was mostly witnessed during the periods of coup de tats that were very common in Nigeria.

Conversely, the country has had frosty relations with major international powers. As far as the civil war is concerned, the country maintained a low profile. Notwithstanding, the country was a major supporter of the general UN policy. Nigeria has always marinated good relations with the east, and thus Japan has been its major trading partner. On the other hand, its closeness with the west has always varied as time goes by. This has mostly been dependent on the ruler at that particular time.

As a matter of fact, the country has always sided with Britain on major economic and social issues since it was its colonial master. Further, the United States and the Soviet Union have always had an interest in the country because of its economic might and power (Lewis, 2007, p. 28). In fact, the US has always consulted with Nigeria over major African issues that have evolved as time goes by.

Overall, it is to be noted that the balance of trade between Nigeria and other western nation’s has always varied and this has been a major concern considering that despite most western nations showing interest in Nigeria, the country has always favored most Asian countries such as Japan and China as its first choice in different developmental projects.

Currently, there is a lot of shifting world coalitions and the nation has been cautious when dealing with contentious issues. The emergence of China as a major economic powerhouse has brought in anew focus and this means that Chinas’ presence in Nigeria will always be an important aspect.

The foreign relations between China and Nigeria

The relations between China and Nigeria have grown tremendously in the recent years. This is as far as bilateral relations are concerned. In addition, strategic cooperation between the two nations has also been positive and this is commendable. Furthermore, it should be known that the two countries established a formal relation in 1971. This is as far as the general diplomatic relations between China and Nigeria are concerned. The two nations became even friendly after Nigeria was isolated.

This was mostly because of atrocities that were being committed by the then military regimes. As a result, there was a lot of western condemnation between 1970s-1998, which isolated the country thereby giving China a chance to move closer, and tighten its relations with this major oil-producer (Taylor, 2007, p. 27). On the other hand, studies over the years document that China’s economy has been growing drastically, and it has always relied on Nigeria for its oil needs.

Besides, Nigeria wants to achieve high economic growth rates and that is why it has seen China as a friend in economic affairs. Here, most scholars note that the country has called on China to give it enough economic support for the country to achieve its envisaged goals. This can be explained from numerous visits that Chinas president Hu Jin Tao has made to Nigeria between 2004 and 2006 (Adeoye, 2011, p. 16).

Consequently, most western nations have been reluctant to provide enough military support to help Nigeria in the fight against insurgents, and thus Nigeria has turned to China for this favor among other economic interests. In this case, the two nations have ended up developing a strong military cooperation that has blossomed as time goes by. In addition, it should be known that the two nations have an agreement towards the development of communications.

As a matter of fact, Nigeria’s communication satellite was developed through the help of China. Other partnerships like the establishment and development of cellular network and space programs have also been initiated for long term sustainability. Trade between the two nations is now more than $3 billion, and this trend is set to increase as time goes by (Cody, 2007, p. 25).

Furthermore, China has been securing oil drilling licenses in Nigeria and other investments over the years making other foreign countries doubt the real intentions of China in the Nigerian market. As a matter of act, China was to initiate development projects through a four point plan that had been agreed upon by the two nations.

Additionally, to expand their bilateral relations, the two countries have been cooperating well in trade and investments. This has been seen in various areas like agriculture and the telecommunications sector. Thus, China has a controlling stake in the country’s oil refinery and this has been a strategic move seen by many western countries as China’s attempt to lock out other countries willing to exploit the same sector (Cody, 2007).

Here, studies show that the oil refinery produces 110,000 barrels in a single day, and that is why it was of great importance to China as a developing nation. This is because it has a large demand for oil that needs to be attended to as far as production activities are concerned. As a result, the bilateral relations between Nigeria and China have seen most Chinese firms enjoying preference in terms of exploring oil and undertaking developmental projects across Nigeria.

Other initiatives like a loan of USD 1 billion have been advanced to Nigeria by China to help it in infrastructure development (Olusegun, 2010, p. 27). As far as political relations between the two countries are concerned, there has been an argument that China is dumping cheap products in Nigeria. This has become a very sensitive issue together with the importation of second hand cloths in the Nigerian market. Such an issue can be explained by threats from militants who are willing to attack Chinese workers in Nigeria.

Case study: China’s presence in Nigeria

China’s presence in Nigeria has been immensely felt in recent years and this is a fact that has spurred a lot of speculation about the current day diplomatic relations between the two countries. China’s currency, the Yuan, is currently traded in Nigerian’s foreign exchange market and this explains its growing presence not only in the nation but also in other African countries. Certainly, the increase in trade flows between the two countries has seen the Yuan being used for trade settlement.

This was no surprise coming from the country’s central bank that legalized the Yuan thereby including it among the currencies that can be used for such settlements (VOANews, 2010, p. 21). Moreover, the country’s domestic foreign exchange market has been dominated by the Yuan in recent years and this shows how China’s presence has been increasing as time goes by. On the other hand, Nigeria being the second major economy among the African countries, China has found an important trading partner in the country in the long run.

Further, there has been an argument that China is using strategic countries like Nigeria to gain a foothold in Africa’s economy. As a matter of fact, bilateral relations between the two nations are very strong. A strong relationship is an indication of how strong the two nations have forged a strategic partnership. Investments and trade from China to Nigeria have been increasing in recent years because China is getting a lot of oil from the nation.

In addition, the level of trade between China and Nigeria has increased by more than 41.8%. In this case, the volume of trade in 2010 was more than $3.67 billion. From 2004, trade volume between the two nations grew by more than 300%. China has a foreign reserve of more than $2 trillion and it has been using this to establish its presence in Nigeria (Foster, 2009, p. 14).

Initially, China came in with a lot of money to Nigeria but this has been decreasing and staggering as time goes by. In recent years, China has been signing strategic partnerships with Nigeria as far as drilling of oil is concerned. This has been meant to give it an upper hand over other competing developed nations such as the United States.

For instance, China is in contract with Nigeria to develop an oil refinery worth $23 billion. The latest of such deals has been the setting up of an oil refinery in Nigeria worth $6 billion (Osagie, 2011, p. 35). The country’s investments in Nigeria are more than $7 billion which explains how important Nigeria has become to China. Additionally, there have been commitments from China as far as investing in Nigeria’s infrastructure is concerned and this will be closely watched by all stakeholders.

Conversely, China has been giving Nigeria loans in specific areas like the recent one which was worth $900 million (Afripol, 2011, p. 17). The loan was given by the China Export-Import Bank to help the country to finance various developmental activities. Therefore, we can not deny that China plays an important role in the Nigeria’s economic landscape and this is something that will be closely watched as time goes by. The country plays an important role in Nigeria’s economic development because of the numerous investments that it has made.

As a matter of fact, China is greatly respected in Nigeria and this is as far as economic issues are concerned. Thus, China seeks to establish a long term strategic partnership with Nigeria for sustainability and this has been proven through various development projects and initiatives undertaken by most Chinese firms and business people. It should also be known that China will continue to invest in Nigeria because it is in need of the country’s resources most notably oil.

Furthermore, China is currently on a great economic growth/expansion and it needs fuel to run the economy thereby justifying its presence in an oil producing nation like Nigeria. Its local industries need to expand immensely and this will not be achieved if the country does not have enough oil for this. Consequently, China will continue establishing a strong presence in Nigeria by contributing to its large economy and this explains why the Yuan is being traded in Nigeria’s domestic market (Osagie, 2011, p. 28).

Undeniably, China has flexed its muscle in Nigeria’s financial market and this is something that is expected to take a different direction depending on the prevailing situation on the ground. All along, China has grown its confidence in Nigeria as time goes by and this is set to stabilize its presence in the populous nation. Moreover, China is a significant player in Africa by all means and this can be explained from the numerous contracts and strategic partnerships that it has forged with other African countries besides Nigeria.

In the recent past, the impact of the dollar in the Nigerian market has decreased due to the existence of the Chinese Yuan. As much as the dollar is the principal trading currency, the Yuan has given it a run for its money in most markets across Africa. This does not mean that the dollar will be pushed away from the markets so easily because it is a universal currency with a good value. As a matter of fact, there has been a surging demand for it in recent months by Nigeria’s local banks.

However, the volume of the Yuan in Nigeria will continue to increase as time goes by and this will be driven by trade and investments between the two nations. Simply put, the presence of China in the country will spur and drive the demand for the Yuan in the market (Nakale, 2011, p. 34).

The business community in Nigeria has been very happy in recent months because the Yuan is traded in the country. In this case, they are not supposed to convert it into another currency before doing business. Such an aspect explains why China is a serious player in the country’s business.

Therefore, China’s presence in African economies and markets will continue to increase as time goes by and this is a fact. Conversely, western nations are not comfortable with Chinas’ presence in Africa because most Chinese firms have taken over major contracts across Africa thereby locking out other investors. As a result, the Yuan will continue to establish its foothold in the basket of major currencies as long as these partnerships are existent (The Nigerian Archive, 2011, p. 18).

Furthermore, Africa wants to develop her economy, and thus, any bilateral relationship will be very much encouraged. This explains why China has seized this important opportunity by establishing markets all over Africa besides the one in Nigeria. In this case, the presence of China is set to mature as time goes by through the right and correct policies for long term sustainability.

There has been an argument that China has an undue advantage over Nigeria’s economy and this has raised a lot of political anxiety in Nigeria. Therefore, there is the need for China to look into this issue before it threatens its presence as a major player in the economy of Nigeria.

On the other hand, various people and stakeholders are arguing that the Nigeria is being overwhelmed by China. This is as far as China’s presence in Nigeria’s economy is concerned. Here, it is worth noting that China has been known to produce goods at low costs and this means that most of its products are cheap. Western nations have rigorous controls on such cheap products and that is why China has been looking upon Africa to dump its inferior goods (Sahara reporters, 2010, p. 41).

In this case, Nigerians have protested that a lot of inferior and low quality products are being dumped in the country and this does not augur well for the two nations that are aiming to enhance their bilateral relationships. As a matter of fact, Nigeria is suffering from importation of cheap and inferior products from China. For instance, Nigeria’s textile industry has been predicted and projected to collapse because of the imports and something should be done to avert the situation.

However, it should be noted that irrespective of such major challenges, which need urgent intervention, the relations between China and Nigeria have benefitted the two countries by far. Thus, it is up to the stakeholders to identify loopholes and seal them if at all these relations will stand the test of time.

Recommendations and Conclusions

From the foregoing discussions, it is certain that as the relationship between Nigeria and China blossoms, there has been evidence of growing discomfort among Nigerians and other foreign nations. In this case, the immense presence and interest of China in Nigeria has occasionally been questioned. This is because the idea of economic development seems to be working in favor of China at the expense of Nigeria’s oil.

Accordingly, it is recommended that all stakeholders should come together in order to figure out various ways to address issues raised by consumers and other development partners in Nigeria. Furthermore, it is certain that Nigeria has submitted its economic integrity in the hands of a country like China for the sake of infrastructural development.

As a matter of fact, the strategic relationship between the two nations has been labeled an inferior products dumping affair (Pan, 2006, p. 13). Subsequently, this research paper notes that equal partnership between the two countries has not been addressed by technocrats and leaders and such an aspect should be evaluated.

On the other hand, Nigeria’s local industries are being outwitted by their Chinese counterparts. This is because products from China are cheap, and thus Nigerian industries are bound to encounter high costs of production and low sales. This issue poses a very big question as to who is in charge between Nigeria and China. Does this mean that China’s economic might and influence is giving the country an undue advantage over Nigeria? Overall, it is obvious that China’s presence in Nigeria has not been so helpful.

This is more so where it has political influence (Okoh, 2011, p. 25). In this case, China has always colluded with corrupt government officials to get resources thereby ignoring democratic and human rights. There are incidences where China has announced deals in Nigeria and failed to honor them.

Such issues are the ones that have attracted a lot of attention thereby terming the relationship between the two nations as skewed. All together, it is recommended in this paper that either Nigerian officials or Chinese traders should address this issue promptly because it can be the source of their downfall in the near future.

Furthermore, the foregoing discussions note that the balance of payment between the two nations favors China. For instance, Nigeria exports a lot of oil to China but it instead gets cheap manufactured goods and commodities from their counterparts. The oil for infrastructure projects is very common in Nigeria and this has been practiced by successive governments. Most of the deals and agreements between Nigeria and China lack transparency.

China’s population in Nigeria has been increasing as time goes by relative to the number of investments and trade that have taken place between the two nations (Campbell, 2010, p. 28). And since the business practices between Nigeria and China are very much different, there is the paramount need for integration of these practices in order to balance the trade.

In fact, Nigerians have complained that Chinese are racist and this is based on the fact that they pay low wages and give Nigerians menial jobs in their own country. Overall, despite that Nigeria needs more investments from countries like China; there is the need to base foreign and economic relationships on mutual trust and benefits if at all the two parties are to rip long-terms benefits out of the marriage.

Reference list

Adeoye, Y. (2011). SPDC JV sponsors China – Nigeria business summit. Web.

Afripol. (2011). Chinese Yuan joins trading currencies in Nigeria. Web.

Ake, C. (1996). Democracy and Development in Africa. London: Brookings Institution Press.

Campbell, J. (2010). Who’s in charge, China or Nigeria? Web.

Cody, E. (2007). China Builds and Launches a Satellite for Nigeria. Washington DC: The Washington Post.

Foster, P. (2009). China seeks a sixth of Nigeria’s oil reserves. Web.

Lewis, P. (2007). Growing Apart: Oil, Politics, and Economic Change in Indonesia and Nigeria. Michigan: University of Michigan Press.

Levy, P. (2004). Nigeria. Abuja: Marshall Cavendish.

McGreal, C. (2007). Ruling party named winner in disputed Nigerian election. London: Guardian.

Nakale, A. (2011). How African journalists perceive Chinese. Web.

Olusegun, T. (2010). New Refinery Planned for Lagos Free Trade Zone. Web.

Okoh, C. (2011). Nigeria, China Trade Relations Hit U.S. $7.5 Billion. Web.

Osagie, C. (2011). Nigeria-China Trade Hits $7.76bn. Web.

Pan, E. (2006). Q&A: China, Africa, and Oil. Web.

Sahara reporters. (2010). The Undue and Unhealthy Influence Of China On Nigeria’s Economy. Web.

Suberu, T. (2001). Federalism and Ethnic Conflict in Nigeria. New York: US Institute of Peace Press.

Taylor, I. (2007). Sino-Nigerian Relations: FTZs, Textiles and Oil. Beijing: China Brief.

Toyin, F. (1999). The History of Nigeria. New York: Greenwood Press.

The Nigerian Archive. (2011). WikiLeaks: Chinese oil companies not welcome in Nigeria. Web.

VOANews. (2010). China and Nigeria Building Huge Free Trade Zone in Lagos. Web.

Click Here To Order Now!