Dear Yuan, let’s have a kiss

China currency, Yuan has potential to help to reduce the pressure on the reserves and the sharp demand for dollar for importation. PHOTO: BANK OF CHINA.

China currency, Yuan has potential to help to reduce the pressure on the reserves and the sharp demand for dollar for importation. PHOTO: BANK OF CHINA.

If you needed any proof that adversity is the mother of creativity this is it: The dollar with the huge muscles of a heavyweight boxing champion was holding us by the jugular, about to cause a sudden asphyxiation, then we suddenly realised that we could find another pretty damsel who could rescue us from the vice-grip of Madam D, D for dollar. The new damsel, Yuan, aka renminbi, doesn’t have a name that is too well known, but she has a name; she is not as pretty as Madam D but she is pretty enough for us to have an affair with. In a word, we are saying to China: we are open for business.

The Central Bank of Nigeria (CBN) on the sidelines of President Muhammadu Buhari’s visit to China recently signed a currency swap agreement with the Industrial and Commercial Bank of China. In 2005, according to the CBN, trade between Nigeria and China was about $2.8 billion and rose to about $14.9 billion last year. China accounts for about 80 per cent of that transaction. That vast volume of business was largely conducted in dollars. With the huge pressure on our naira and economy and the shortage of dollars for imports, the CBN had to take some unpalatable palliative measures to shore up the value of the naira. The pressure did not ease significantly so the recent China-Nigeria currency swap agreement is a significant opportunity for the naira to have a bit of fresh air. It will shore up the value of the naira that is currently now under pressure in the foreign exchange market. It also means that the Yuan can be used directly by Nigerians for imports instead of the almighty dollar.

Since 2005, the International Monetary Fund (IMF) has accepted the Yuan as a world reserve currency along with the dollar, euro, pound sterling and the Japanese yen. That opened the door for many countries to sign currency swap deals with China. So far about 30 countries have done so. This includes the 400 billion Yuan currency swap with Hong Kong in 2014. Earlier in 2008 China signed one with South Korea and another with Malaysia in 2009. South Africa also signed a 57 billion Rand agreement in April last year to facilitate trade and investment.

It is a pity that the Nigerian Federal Government had ignored China for a long time. Yes, some state governments in Nigeria have done some small businesses with China‘s industries and universities but all these do not come to scratch considering what we could have done with this juggernaut if we had not fallen prey to Western propaganda and our own penchant for intellectual insularity.

Many years ago, many parents never wanted to send their children to school in the Soviet Union or Cuba or any of the communist or socialist countries; no one considered China even for a second and yet the Soviet Union and China were already super powers in the global playground. Our governments harassed professors at the Ahmadu Bello University (ABU) for “teaching what they are not paid to teach: Socialism.” Our governments thought that studying socialism and wearing a goatee beard would make you a noisemaker, a radical and a trouble maker so they did not want to have anything to do with such men. In fact, during the Shehu Shagari Administration, a newspaper photographer who always wore a beard was prevented by the Press Secretary, Charles Igoh, from covering Government House activities because of his beard. I was chairman of the Editorial Board of the newspaper then and we tackled the matter with an editorial titled “Charles Igoh’s Bigotry.” They had to rescind the order.

But China, in particular, with its huge population, its vast resources, its unconquerable spirit built on its Confucian ethos, its creatively adaptive technology is a country we should not have ignored.

Due to our ignorance we ignored it. But China has been growing at warp speed, feeding 1.4 billion people and exporting food to other countries. It is the leader in appropriate technology, and is able to build skyscrapers within a few weeks and they do not drop to the floor like houses in Lagos. It is the author of acupuncture, a peculiar method of healing that no one has been able to copy. It is the leader in alternative medicine and India is only a distant second. During the last few years of international financial crisis, China’s growth has been put at about 9 per cent. China has lifted more than 620 million people out of internationally defined poverty (living on $2 per day).

China is now an industrial superpower. Its goods are everywhere in Africa, shops, supermarkets, offices. Its food is in every elite stomach in the world. It has since 2010 overtaken Japan and is now the second largest economy in the world. The informed speculation is that it may become the world’s number one economy in 2025, putting the United States economy behind it. This may or may not happen but the educated speculation only goes to confirm the strength and rampaging nature of this behemoth.

Buhari and his team may have been wondering how the China miracle happened. For me, even beyond the currency or oil swap deal, this should be the major take-away from the president’s visit to China. B China places a heavy emphasis on good education. It produces seven million graduates a year, 40 per cent of them in engineering and science. Nigeria has a programme called STEM (Science, technology, engineering and mathematics) but how much is the Federal Government investing in it if education as a whole gets less than 10 per cent allocation from the Federal budget every year? This is a far cry from the UNESCO prescription of a minimum of 26 per cent.

The Chinese work ethic is founded on the Confucian philosophy and values: dedication, hardwork, loyalty to club and country and integrity. These values drive the China success. Do we in Nigeria, as a people, have values that ought to drive our striving for accomplishment? If we have them, why are we stuck in the mud?

China believes in thrift as a working philosophy. Government is able to fund many of its grand infrastructure projects in China with savings. The government encourages its institutions and people to set a minimum savings target of 25 per cent. Now, 27 of our state governments cannot pay salaries to their staff. Two years or so ago, when crude oil was selling at more than $100 a barrel the Federal Government wanted the excess fund from crude saved for the rainy day. The State Governments refused and headed to the Supreme Court to press their case. They shared the money and blew it. Now the rains are here and they have no shelter. The Labour Unions are giving them hell; the staff are giving them the sharp side of their tongues. They are running to the money lender unmindful of the fact that he who goes aborrowing goes asorrowing. But they have no choice now. When they had the chance to make a choice they chose the wrong one.

When China was in deep poverty and could hardly feed its people because of its huge population it devised one child per family policy to be able to feed its teeming population. That huge population hubbled it but today its growth is phenomenal, its food policy has been very successful. So it has increased the number of children per family to two. In 1991, Nigeria under President Ibrahim Babangida worked out a population policy of four children per woman, not per man, not per family. It was a policy designed not to solve any problem. Editors in Newswatch interviewed the First Lady, Mariam, a very intelligent, perceptive woman and a fighter for women’s rights. We asked how she reacted to that policy when her husband returned home that day. She said: “I raised hell. I didn’t like it. I said women should have been consulted first and of course the decision was taken by the men. I said here we go again. We bear the brunt. We should have been involved.” The husband merely said to her: “They will sort it out.” How? He didn’t say. The Maradona in Babangida came alive.

If that government wanted to be serious about population control shouldn’t it have set a limit of four or less children per man instead of per woman? Now, in the name of religion or tradition many men are breeding children like rabbits and creating problems for the society now and in the future. Will Buhari fashion out a new population policy for the country knowing that population must be tied to a country’s ability to feed itself?

In China, production for expert is subsidised. So, imported goods from China are cheap. In Nigeria, there was a policy called the export grant policy but it has been suspended for the past two years. That policy should be reinstated so that Nigerian businesses can benefit from the new deal with China. But of course the government must continue to press on with its import substitution policy and not allow junk to be brought into the country simply because we are paying for them in Yuan.

The government must also encourage Chinese firms to set up manufacturing companies here and produce their goods instead of just bringing their textile products and setting up shops in Kano and Balogun markets in Lagos. This is the major killer of the Nigerian textile industry.

The Chinese are very smart businessmen. This new mistress called Yuan is alluring and even when we say “honey, let’s have a kiss” we must not drop our guards. Yes, we must not.



1 Comment
  • emmanuel kalu

    even the American’s are wary of dealing with china. There has being many horror story about china and they are known to destroy economies with substandard goods. They are doing it to Nigeria right now. Nigerian’s government are always looking for new easy way out the problem. our currency problem is solely because we import everything, without exporting anything. we need to focus on increasing our export, and reducing our import, instead of looking for alternative for the dollar.

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