Nigeria-China’s economic relations got a boost over the weekend with zero tariffs for goods exported to China from Africa and a $51 billion war chest for African infrastructure within the next three years.
The Chinese government also promised to strengthen the currency swap between Nigeria and China, which is expected to ease pressures on the Naira.
Speaking at the just ended Forum of China and African Countries (FOCAC) meeting in China, investment analysts see the event advancing China -Africa relations, describing it as one of the most successful outings of President Bola Tinubu.
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Ken Ife, an economist, believes that the currency swap can take 70 percent pressure off the Naira.
“Naira swap, which was arranged under the previous administration and experimented with for some time, was abandoned. But I do not know why it was stopped.
“As we speak, some Chinese firms are still using it in their transactions with Nigerians. So, it is important that the president was able to revisit the policy.”
He noted that with the Dangote refinery potentially taking off 40 percent pressures from the Naira and the Naira gaining another 30 percent on the backdrop of the currency swap in trading relationships between Nigeria and China, the pressures on Naira will go down by as much as 70 percent.
Freedom Onuoha, an expert in international relations, while X-raying the Chinese government’s offer to African countries, said: “While we welcome the gesture, we must ask ourselves questions around what we have in the terms of what Nigeria can export to China.”
He noted that while the offer will boost local businesses in Africa, the continent must increase local production of goods and services and focus on value addition to benefit from its relationship with China.
“It is possible that the Chinese have used their own intelligence to assess African countries and come up to the realisation that most African countries do not possess capacities to take advantage of these pronouncements.
“Secondly, it is also possible, given the level of Chinese involvement in African countries, that most of such exports will be done by Chinese companies operating in Africa. So, the waivers will still go back to their companies and citizens operating in Africa.
“The Chinese government can also use this as a bait, but if we are not careful, it may be looked at as having an equitable economic value for Africa.”
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Recall that President Xi Jinping of China, while speaking at the meeting, announced 100 percent zero -tariffs and other financial support to all Least Developed Countries (LDCs) having diplomatic relations with China, including 33 countries in Africa.
The Chinese leader, while also appreciating ties with African nations, said China and Africa should rally their populations together to become a powerful force and write a new chapter in global peace, prosperity, and progress.
He also pledged another $280 million in aid to African countries while proposing partnership actions to jointly advance modernisation with Africa.
The Chinese leader listed 10 actions to be implemented in the next three years, covering areas of mutual learning, including civilisations, trade prosperity, industrial chain cooperation, connectivity, development cooperation, health, agriculture and livelihoods, people-to-people and cultural exchanges, green economic development and common security.
"To implement the 10 partnership actions, the Chinese government will provide RMB360 billion yuan of financial support through the next three years.
''This breaks down into RMB210 billion yuan of credit line, RMB80 billion yuan of assistance in various forms, and at least RMB70 billion yuan of investment in Africa by Chinese companies.
''In addition, China will encourage and support Africa in issuing panda bonds in China to enhance our results-oriented cooperation in all areas,” he said.
Adetokunbo Kayode, an investment expert and former attorney general and minister of justice, said: “Federal government must monitor all agreements entered into with Chinese firms, especially at the subnational levels.”
“There is no free launch anywhere. China has calculated the gains from such policies before making them public,” he said.
Kayode noted that the Chinese government, which recently lifted the ban on the number of children each family can have, is fully aware that it must provide jobs for its citizens.
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“China has lifted the ban on procreation and Chinese families can now have three children per couple, and there are the needs to keep them employed. They encourage a lot of Chinese citizens to seek jobs outside their China, so they are ready to do anything to expand the scope of opportunities for their citizens
“It is now left for us to think about how to benefit from such policies.”
The former minister cited the case of a Chinese citizen producing about 20,000 tubers of yams in Nigeria, noting that if he does such quantity of yams and exports to China because it is in high demand, China can afford to reduce tariffs to encourage him and its other citizens doing business in Africa.
“This is a very good opportunity for African countries. When China wanted to start in 2002, it proposed bilateral agreements which many state governments did not know about. That was a business agreement that affects everyone.
He further said that governors should stop going around to look for foreign investors without involving the Federal Government.
He said it is necessary for all parties to keep to the agreements with foreign investors, stressing that Nigeria “must strengthen our arbitration laws.”
