By Bolaji Akinola
China is investing billions of dollars in Africa but Beijing has been accused of exploiting the continent’s vast mineral and energy resources at the expense of local people.
China has been Africa’s biggest trade partner since 2009. Bilateral trade stood at just under $11 billion in 2000, by 2006 this figure had jumped to nearly $60 billion and last year bilateral trade had soared to $210 billion.
Sino-Nigeria trade volume in the last one year hit $14.94 billion, while China’s non-financial direct investment to Nigeria stood at $1.55 billion by the end 2015.
The trade volume is always in favour of China. Nigeria remains the largest market for Chinese contracted projects, the second largest market for Chinese exports and the third largest trading partner in Africa.
Chinese investment in African countries has also risen some thirty fold in the past ten years. Foreign direct investment went from $500 million in 2003 to almost $15 billion by 2012. And last year, China pledged $20 billion in loans for infrastructure development.
Across our vast continent, there is rising prosperity and terrible poverty, responsible governments and total lawlessness, lush fields and forests and drought-stricken states.
Chinese companies, many of them state-owned, responding to their own immense domestic demand for natural resources, are buying up concessions for African mines and forests.
Since 2005, China’s direct investment across Africa has increased thirty fold, and by 2009, China had replaced the United States of America as Africa’s largest trading partner.
In all of these, a pattern developed: Chinese companies would enter a market and sign lucrative contracts to extract resources and ship them back to Asia. In return they built eye-catching infrastructure projects like soccer stadiums and superhighways. They even built a massive new headquarters for the African Union in Addis Ababa, Ethiopia.
There was no doubt that these projects have been welcomed by many African leaders and that the Chinese are helping modernize infrastructure in a continent where just 30 percent of the roads are paved. But the Chinese brought their own labourers rather than hire local workers who needed jobs and sustainable incomes, and they paid little attention to the health and development challenges Western nations and international organizations worried about.
I think rather than jubilate over the propose $2b loan from China and the so called Yuan trading deal with Nigeria, Nigerians should because suspicious and read the fine details.
China wants to lend us two billion dollars, but they want to give us in Yuan and not the dollar itself. They are not handling us cash, but service exchange; meaning whatever we want to buy, we buy from Chinese company and they pay the company on our behalf.
If we want to new airport or roads, they will construct them for us and take the money out of the “loan”. In essence, we would have signed off all our capital spendings to China, without the opportunity opening such projects to competitive biddings. Chinese construction workers will then flood Nigeria, as they have always done. They dictate the price and pay the bills on our behalf. At the end of the tenor, they probably would execute projects worth half the price and bill us two billion dollars with rising interests.
Many Nigerians don’t know that even Chinese company don’t want Yuan. The renminbi is an artificial currency that does not carry its real value at anytime, so nobody wants it. Chinese foreign reserve is in dollars with China being the largest holder of US bond.
Nigeria must by all means be careful the kind of loan deal it signs with China so as not to mortgage the future of its unborn generations. African leaders must also review Chinese investment on the continent. Over the long run, investments in Africa should be sustainable and for the benefit of the African people.
Sino-Africa relationship is anything but a win-win. It is heavily skewed in favour of the Chinese and one hopes it won’t be too late before African leaders wake up to this reality.
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