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Opinion: Who's in charge, China or Nigeria?

Despite China’s escalating energy requirements, its attempts to expand its energy relationship with Nigeria have largely failed.

hu jintao and olusegun obasanjo
Chinese President Hu Jintao is welcomed by Nigerian President Olusegun Obasanjo as he arrives in Abuja, Nigeria, April 26, 2006. The relationship between China and Nigeria peaked during Obasanjo's administration, from 1999 to 2007. (Afolabi Sotunde/Reuters)

WASHINGTON — For some, the rapid growth of China’s presence in Africa has been disquieting.

Beijing is not always helpful where it has political influence. It occasionally colludes with corrupt and abusive governments, and its thirst for natural resources has raised the specter of a second “scramble for Africa.”

In Nigeria, Chinese economic and political influence, however, is a chimera. It peaked under President Olusegun Obasanjo, from 1999 to 2007, and then rapidly dissipated during the subsequent Umaru Musa Yar’Adua years.

The relationship has occasionally produced benefits for both sides, though often generating more media attention than actual substance. For example, media excitement over the May announcement of China’s intent to build refineries ignores a pattern of failure to implement such deals.

Post-independence in 1960, Chinese trade and investment in Nigeria were negligible, though Hong Kong and Taiwanese entrepreneurs had established a manufacturing presence, especially in textiles.

However, during the Obasanjo administration, the value of Nigeria-China trade increased dramatically, particularly near the end of his administration. The value of trade between the two countries grew from more than $3 billion in 2006 to more than $7 billion in 2008. (By comparison, the value of U.S.-Nigeria bilateral trade was more than $42 billion in 2008).

Nigeria sold oil to China (its only export), although not very much, and purchased cheap manufactured goods, with the balance of payments strongly in favor of the Chinese. According to the World Bank, only 3 percent of the oil Beijing imported from Africa originated from Nigeria, the continent’s biggest producer.

Despite China’s escalating energy requirements, its attempts to expand its energy relationship with Nigeria has largely failed. Obasanjo, seeking an alternative to the big Western oil companies, sought to secure Chinese investment in big infrastructure projects in return for oil block concessions he would grant on highly favorable terms, known as “oil for infrastructure” projects.

During Obasanjo's second term, China's President Hu Jintao and Prime Minister Wen Jiabao each visited Nigeria, and Obasanjo went twice to Beijing. Both sides made numerous dramatic announcements, including promises that the Chinese would rebuild the railway system and construct power plants and refineries.

However, these agreements lacked transparency and were short on details. There are also credible charges that negotiations were heavily greased by Chinese bribes and other forms of corruption. A Chatham House report makes a strong, if circumstantial, case that Obasanjo sought Chinese money for his attempt to change the constitution and secure a third presidential term through bribery.

Obasanjo ultimately failed and in 2007 was succeeded by his handpicked successor, a Muslim from northern Nigeria, Yar’Adua. The new administration canceled or suspended most of Obasanjo’s “oil for infrastructure” contracts, which from its perspective strongly favored the former president and his political allies.

http://www.globalpost.com/dispatch/worldview/100604/nigeria-oil-china