The Challenges And Prospect Of Nigeria-China Trade Relation

Project and Seminar Material for International Relations

The Challenges And Prospect Of Nigeria-China Trade Relation


Abstract


This study was carried out to examine the challenges and prospects of nigeria-china trade relation. Specifically, the study ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria, determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria and examine the challenges facing the Nigeria-China trade relations. The findings revealed that the relationship between the two countries have huge current and potential benefits to both countries and Africa as a continent as it further creates more favourable environment for business ties between China, Nigeria and West Africa at large. However, it is important that China‘s seemingly elitist approach in its relationship with Nigeria be redefined to encompass all i.e. both the leaders and the citizenry to ensure lasting and hitch-free relationship. According to Humphrey Pole-Pole, this will be better implemented as win win-win strategy in which case it apportions a win for China, a win for African governments and a win for African people to sustain the economic pacts.The study thereby recommend that Nigeria must continue to build, maintain and embrace a mutually trusting and respectful alliance with China. The partnership will continue to pave the way for structural engagements to the greatest extent between the two countries


Chapter One


Introduction

1.1 Background of the Study

Over the past several decades, the economies of the world have become greatly connected through international trade and globalization. Foreign trade has been identified as the oldest and most important part of a country’s economic relationship. The basis for foreign trade rests on the fact that nations do differ in their resource endowment, preferences, technology, the scale of production, and capacity for growth and development. Over the past decades, the volume of trade between nations of the world has increased considerably. In particular, Nigeria has witnessed a sharp rise in the volume of trade and investment with other nations in the world. The relations between Nigeria and China, which cut across political, trade, investment, aid, and military spheres, have grown so much in recent years..

The inevitability of inter-state relations emanates from the inherent tendency of man for social relations; The world of a man is in flux. The fluidity of the world’s social relations has increased significantly. In particular, Nigeria has witnessed a sharp rise in the volume of trade and investment with other nations in the world. The relations between Nigeria and China, which cut across political, trade, investment, aid and military spheres, have grown so much in recent years. The inevitability of inter-state relations emanates from the inherent tendency of man for social relations; The world of a man is in flux. The fluidity of social relations conduces into the search for social coalescence, partnership and cooperation. Naturally, man is created with inbuilt and ever elastic gregarious instincts which propel man to enter into social relations with other men basically to eke out a living. These gregarious instincts combine with differential natural resource endowments to induce man to develop the propensity to partner with others to address the needs of the community. Fundamentally, the scenario opens new vistas of relations between and among states in a world of change.

International trade is recognized as the most significant determinant of economic development of a country, all over the world. The foreign trade of a country consists of inward (import) and outward (export) movement of goods and services, which results into: outflow and inflow of foreign exchange. Thus it is also called EXIM Trade. For providing, regulating and creating necessary environment for its orderly growth, several bilateral trade agreements have been entered into between and among countries of the world.

Traditionally, African countries, particularly Nigeria, have traded rigorously with the developed nations, especially the European Union (EU), Canada and the United States (U.S.). These economic relations are governed by various bilateral and regional agreements that exist between these countries and Nigeria. Although the relationships have gone a long way, the development impact is contestable. However, due to the trade performance of some Asian countries that has enhanced their income and improvement in technology, especially China and India, many African countries, including Nigeria, have begun to diversify their markets to these countries. These emerging trade partners have created some incentives to trade with the continent through their foreign direct investment (FDI) and aid. China’s first contact with Africa generally was in the early 15th century when some Chinese traders and explorers landed along the coast of Africa. This foundation was laid by Zheng He, the famous navigator of China’s Ming Dynasty, who led a large fleet to visit more than 30 countries and regions in Asia and Africa. Zheng He, who lived from 1371 to 1435, undertook the African expedition with about 2000 ships and 27,800 people. All these took place almost a hundred years before Europe discovered and colonized Africa. Sino-African relations, therefore, date back to centuries. In Nigeria’s case, the country’s contact with China unofficially, began in the 1950s, 1957 to be precise. In fact, Nigeria’s initial contact with the Chinese was through Egypt. It is on record that Chan Hanq Kang, commercial officer in the Chinese Embassy in Cairo, established unofficial trade links with Nigeria, along with Tunisia, Libya, Ghana, Ethiopia, Tanganyika (now Tanzania) in 1957. During the colonial era, it was a taboo for Nigerians to have anything to do with the communist world which China belonged to. Nigerians like Funmilayo Ransom Kuti, a frontline Nigerian political and social activist, much to the chagrin of the colonial authorities, secretly visited Berlin and Beijing in the 1950s to attend meetings. Her application for the renewal of her passport was turned down. All contacts with the Eastern bloc countries and China were prohibited and proscribed. All Nigerian students who received benevolent scholarships from unknown sources, as well as Nigeria Trade Union Leaders who attended international conferences in those countries, must be smuggled out of Nigeria via Ghana. But this position was reversed in 1958 by the Nigerian Prime Minister, Tafawa Balewa in a policy statement in parliament which states in part: “we shall of course endeavor to remain in friendly terms with every nation which promises and respects our sovereignty”. However, Nigeria’s first contact with the People’s Republic of China (PRC) was in 1960, when the Chinese government was invited to the country’s independence celebrations.

Nigeria’s first contact with China is designated as “the era of Informal Ties, 1960-1971”. At independence, Nigeria’s political leadership was not only pro-west but vividly anti-communist. The resultant effect of this peculiar disposition was that Nigeria’s attitude towards Communist China followed what had then emerged as a clear pattern of most of her relations with the socialist states-diplomatic isolation accompanied occasionally by bitter attacks against communist subversive ideology at home. As previously stated, Nigeria’s political leadership did not consider close relations with the People’s Republic of China to be one of the agenda items that the country would need to cultivate at the time of independence. While the then Prime Minister Tafawa Balewa declared on October 7, 1960 that Nigeria would be friendly with all countries that recognize and respect her sovereignty, territorial integrity and political independence, he soon made it clear thereafter where the line was going to be drawn. The leaders of the three major political parties-the Northern People’s Congress (NPC), the Action Group (AG), and the National Convention of Nigerian Citizens (NCNC) were, for various reasons, not comfortable with communism. The ideology was not properly understood and was therefore feared. Consequently, neither Chief Obafemi Awolowo nor Dr Nnamdi Azikiwe visited a communist country during their lives. This was despite the fact that Nigeria was the third largest market in Africa for Chinese goods with a steady growth in imports from China. At the same time, the Chinese did not allow Nigeria’s ideological preference for liberalism to stand in the way of their obviously very lucrative trade relations with the country. Nigeria, which has consistently voiced its willingness to formalize ties with People’s Republic of China did so on 10 February 1971.Nigeria established relations with China in February 1971 and has since then maintained good relations with it. China as economic partner to Nigeria has been very dogged and focused in her relations with Nigeria over the decades. Despite the ups and downs of Nigeria-China trade relations, the Chinese have continued to ensure that their market shares in Nigeria remains on a steady path of growth. This should suggest that China has a long term plan for its engagement with Africa. Meanwhile, China and Nigeria have remarkably many things in common. The two countries share the same national day, and are both multi-racial. Furthermore, China has 56 ethnic groups, while Nigeria has approximately 250.Nigeria’s population is the largest in Africa, and China is not only the largest in Asia but the largest in the world. China had suffered from humiliation and occupation during its colonial period and Nigeria also had its fair share of colonial experience and humiliation.

The trade relations between Nigeria and China have now become most evident. In Lagos, Onitsha, Aba, Kano, Nnewi and almost every Nigerian market, one can buy something; Chinese textiles, food items, drugs, electronics, phones, computers and cooking utensils. Nigeria’s communications satellite (NIGCOMSAT-1) was designed, built and partly funded by China.

The NIGCOMSAT-1 was also launched in China. Nigeria is, therefore, doing so much today with China in terms of trade and investments. The Nigerian government in recent times has found Chinese companies more sensitive to economic challenges than their western counterparts. Indeed, the Olusegun Obasanjo Administration (1999-2007) came with an increase in the tempo of Nigeria-China bilateral relations. This is understandable since Nigeria had just freed itself from the status of a pariah state which Nigeria’s burdensome military dictatorship forced on it.


1.2 Statement of Research Problem

The foundation of Nigeria-China trade relations dates back to the early 1960‘s when Chinese delegation visited Nigeria in 1964 seeking to establish diplomatic ties with the country. Ever since then, Scholars of foreign policy have produced research works on the bilateral relationship that exist between Nigeria and China. Hence, This research examines the challenges and prospect of Nigeria – Chinese trade relations.


1.3 Objectives of the Study

The primary objective of this study is to examine the challenges and prospect of Nigeria-China trade relations. Hence, the study seeks to:

  1. To ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria.
  2. To determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria.
  3. To examine the challenges facing the Nigeria-China trade relations.

1.4 Research Questions

  1. What are the challenges facing Nigeria-China trade relations?
  2. To what extent have the Nigeria-China trade relations enhance economic development in Nigeria?
  3. What are the bilateral trade agreement between Nigeria and china?
  4. How has the bilateral trade enhance the volume of Chinese trade in Nigeria?

1.5 Significance of the Study

The significance of this study cannot be underestimated as:

  1. This study will lay emphasis on general historic knowledge of bilateral relation between Nigeria and China especially in the area of bilateral trade relations.
  2. The findings of this research work will undoubtedly provide the much needed information to government, organizations on the opportunities provided by the trade partnership between Nigeria and China, and the nature of economic relations and its effects on national development.
  3. This study is valuable to the field of International Relations and also academia as it relates the challenges and prospect of bilateral trade relations

1.6 Scope of the Study

This study intends to cover the period between 2015 – 2020 of China and Nigeria trade relations. Tracing some of the challenging contents of the Nigeria – Chinese trade relations. Emphasis will focus on the challenges and prospect of trade partnership relations between Nigeria and China,


1.7 Limitations of the Study

This study was constrained by a number of factors which are as follows:

Just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data on the progress made so far on trade from both countries.

Inaccessibility to cooperate bodies engaged actively in the trade. However, efforts were made to overcome some of these shortcomings through adequate use of primary sources of data collection.


1.8 Operational Definition of Terms

Challenges:

This is a difficult task or problems.

Trade:

This is the transfer of goods or services from one person to another.

Inter-State Relations:

This represent the state of the political relationship between countries.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

This research explores the presently thriving China-Nigeria bilateral economic relations. Consequently, the study ascertain if the Nigeria-China bilateral trade agreements has enhanced the volume of Chinese trade with Nigeria, determine whether the increase in the volume of Nigeria-China trade has enhanced economic development in Nigeria and examine the challenges facing the Nigeria-China trade relations. The study was carried out using the qualitative research method.


5.2 Conclusion

The following noteworthy conclusions are made.

The relationship between the two countries have huge current and potential benefits to both countries and Africa as a continent as it further creates more favourable environment for business ties between China, Nigeria and West Africa at large. However, it is important that China‘s seemingly elitist approach in its relationship with Nigeria be redefined to encompass all i.e. both the leaders and the citizenry to ensure lasting and hitch-free relationship.

According to Humphrey Pole-Pole, this will be better implemented as win win-winstrategy in which case it apportions a win for China, a win for African governments and a win for African people to sustain the economic pacts. While the possibilities certainly exist for Nigeria to derive higher value from China‘s growing influence, Nigerians have not fully capitalized on the potential benefits. Far more needs to be done to expand policy creation, institution building, human capital, entrepreneurship, and the culture and leadership capabilities to maximize gains. Most importantly, Nigeria needs to develop a comprehensive strategy to more effectively balance the engagement of China and the West to leverage its own strength and create a plan for sustainable development that resonates with its citizens.


5.3 Recommendations

Nigeria must continue to build, maintain and embrace a mutually trusting and respectful alliance with China. The partnership will continue to pave the way for structural engagements to the greatest extent between the two countries. Both Nigerian and Chinese foreign policy should represent the full capacity of both nations‘ values and insights. A foreign policy focused on a particular issue, such as trade or human rights, might run the risk of never establishing the kind of relationship in which complex questions can be posed and experiences voiced.


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