Buhari and a harvest of Chinese loans

Going by the number of memoranda of understanding (MoUs) signed by Nigerian delegation, it’s being reported that President Muhammadu Buhari’s China trip has already yielded a plethora of harvests of projects for partnerships in Nigeria. Take the six billion dollars Chinese loan of which Foreign Affairs Minister, Geoffrey Onyeama said Nigeria has been given a blank cheque to draw from as soon as appropriate projects to apply the funds are identified.

In the light of the above, there are two low hanging fruits to which Nigeria can apply the jumbo Chinese loans immediately. Without much ado, Nigeria should emulate Ethiopia where the Chinese has helped build a functional light railway system that has helped decongest the roads. Already, as the Chinese premier Xi Jinping pointed out in his welcome speech  to President Buhari and his visiting entourage, Nigeria is the first country to adopt Chinese gauge for her railway line and that project is still ongoing. With the $6 billion Chinese loan, the Lagos-Calabar and Lagos-Kaduna rail projects creating furore  in the parliament look like a done deal as the presidency does not need to appropriate the funds from Budget 2016.

Also, the new automotive policy in Nigeria focused on local assembly of vehicles to create employment which the present government inherited can be boosted through partnerships with Chinese firms.

Again, Ethiopia where the Chinese are producing the Lefan and Geely vehicles which are brands of sedan cars should be considered for replication.

The Ethiopian auto policy which is similar to the one being implemented by the National Automotive Council, NAC, in Nigeria could be accomplished with the Chinese loan of $6 billion exchanging at N300-$1 ($6b times N300=N1.8t) which is about one-third of Nigeria’s 2016 budget of N6.06 trillion and equivalent of the amount that has been earmarked for investment in capital projects this year.

Today, a four-cylinder Toyota, Nissan,Volkswagen or Ford sedan car that costs about $15,000 dollars in the international market would cost over three times that amount to import into Ethiopia due to the heavy tariffs and duties imposed, but a Lefan or Geely sedan car, locally assembled by the Chinese, can be obtained at about $15,000 in Ethiopia.

This is because in collaboration with the government, the Chinese are helping create jobs in Ethiopia through the vehicle assembly plants.
Now, Nigeria has been struggling to operationalise a similar policy through her automotive master plan put in place a couple of years ago, but yet to start yielding benefits owing to half-hearted implementation by both the past and new governments. To date, over 20 European, American and Asian auto assembly plants have been set up across Nigeria to boost employment. Asian , European, American mother firms of the assembly plants should emulate China by providing soft loans to their subsidiaries to fund their plants to enable them compete favourably with their Chinese counterparts. Most of the European and American countries have EXIM banks while Japan has JICA which like the EXIM bank is geared towards export promotion.

The proposed local content in government procurements bill which has passed through second reading at the Nigerian parliament underscores government’s quest to discourage  the importation of fully assembled vehicles, while promoting those assembled in Nigeria with reasonable local input.

However, there are a variety of sectors where Chinese interventions in Nigeria have been without positive outcomes: be it the $400 million security surveillance cameras project in Abuja and Lagos, many years after, is yet to be commissioned; the $500 million launch of Nigerian satellite in orbit by China , which eventually literally fell off the skies a couple of years after or the yet to be completed Chinese gauge railway project; the problem has largely been due to the Nigerian factor, which is basically application of political considerations to economic situations.

Be that as it may, the Chinese experience in Nigeria has not always left a sour taste in the mouth as the current arrangement to build airport terminals in Abuja, Lagos and other cities in the northern and southern parts of Nigeria is on course.

Furthermore, Chinese-built refinery in neighbouring Niger Republic is functional and has helped solve energy challenges in that landlocked and resource-challenged country, just as the highway stretching from Accra to Tema in Ghana, built by the Chinese , has also eased transportation issues in the old Gold Coast, now proud of her new status as a new member of the elite league oil producing nations .

As evidenced by the foregoing, it is the corruption baggage of Nigeria mixed with the equally poor corruption record of the Chinese that is responsible for the negative outcomes of Chinese projects and programme in Nigeria. With a leader whose political career is built on integrity, President Buhari now at the helm of affairs, both the Chinese and Western countries that are currently practically throwing aid and loans  at Nigeria, are entertaining no fears that Nigerian masses would get value for their money in the present dispensation .

That’s same reason I am not with those that are worried that the new loans would exacerbate the current debt situation whereby Nigeria is allocating 25% of budget 2016 to servicing of debt. Considering that our debt to GDP ratio is not out of sync with global best practice, at about 25% – some countries like USA and Japan operate 150% to GDP ratio -in a way, being credit worthy is a form of demonstration of confidence in the economy of a nation, hence l regard the overt and covert offers of credit to Nigeria by the likes of the International Monetary Funds, IMF through her myriad of comments disguised as advice a positive gesture.

Another bright light that President Buhari’s China visit could shine on Nigeria in is the area of farming with the $15million bilateral loan offer for the establishment of 50 pilot/experimental farms nationwide. When implemented, this would serve as a boost to this regime’s adoption of agriculture as the centre piece of her food security strategy through backward integration which is why it should be cheering news to all.

The frequent travels abroad by the President has not been in vain, as it is being portrayed in some quarters. In fact, his shuttle diplomacy to the Western world, Middle East and Asian  countries – including Saudi Arabia, Quatar and lran – has yielded bountifully. However, more than the others, the visit to China has yielded more rapid result, perhaps  because Chinese diplomacy appears to be swifter than the Western type, as she issued Nigeria a blank cheque of $6 billion upfront and also granted $15million as bilateral grant without equivocation.

When Nigeria cashes the Chinese cheque, it is hoped that the cynics would see what we say when he was visiting the Western world and what we see today as he returns from China.

Most importantly, when you compare President Buhari’s attraction of numerous goodwill, technical support militarily and funds to Nigeria without compromising our country – like ceding off any part of Nigeria like the Bakassi  Peninsula to another country – to the situation in Egypt whereby  two islands Tiran and Sanafir in the Red Sea were traded off to Saudi Arabia after at least 15 bilateral agreements were signed including one for an oil deal worth $22 billion to Egypt, then it would be realised that President Buhari should be commended, not vilified.
The Saudi King Salma was in Egypt for a five-day official visit.

According to New York Times, Saudi Arabia, a staunch ally of Egypt, has since 2013 invested about $12 billion in the North African country which has been in the throes of economic pains arising from the so-called Arab Spring. Remarkably, President Buhari’s bouquet of goodies from China has no such strings attached, which should be celebrated, not scorned.
• Onyibe, a development strategist and futurologist, was a commissioner in Delta State and also an alumnus of the Fletcher School of Law and Diplomacy, Massachusetts, USA, sent this piece from Asaba, Delta State.