Tuesday, November 11, 2008

ENTER THE DRAGON: Chinese incursion into the Nigerian Marketplace

At a time no decent country would touch Nigeria with a long pole, much less taking interest in its economy, no thanks to a debt overhang of $35 billion (since forgiven), a rating as one of the most corrupt nations in the World (recently improved rating); China waved off the risks and took the plunge.

The first sign was the upsurge in the number and size of Chinese restaurants springing up at most unusual spots in major cities in the country. Next was China Town’, an unofficial export free zone, providing dump sites (markets) for cheap, but largely substandard textile products from Chinese factories.

Before long and in the quest to expand its frontier of business in Nigeria, China moved from the backwaters of the informal sector, and literally invaded the economy, searching for trade and investment opportunities. The plunge has paid off.

China in the last nine years has become a strategic player in the Nigerian economy. Placed side by side with new crop of ‘invaders’ like Austria, Israel, South Africa, India, Belgium, Singapore and Taiwan, China stands head and shoulders above the rest.

With the official backing of the home government, Chinese companies have made great incursions into traditional spheres of transportation, construction as well as emerging sectors like energy, oil and gas and telecoms, rolling in billions of dollars in investment.

All this while, Nigeria’s known traditional trading allies, Britain and the United States of America kept moaning about the hostile business environment and pervasive insecurity of lives and properties. While they ensconce themselves in exclusive areas of Nigerian cities, drive around in a convoy of security vehicles and their Governments occasionally releasing travel warnings, the Chinese befriended the local people, play football with them, take commuter buses and learn the local languages.

Well, it does appear that these great industrial giants have suddenly woken up from their slumber. It has dawned on them that if they tarry a while, China and indeed India and South Africa etc would outpace them in Nigeria, as it currently does in the global economy. So they are reacting.

They have promised to launch aggressive penetration of the non-oil sectors considered critical to the growth of the Nigerian economy in order to counteract Chinese dominance. But would the dragons allow them? Only time would tell and Nigeria having the last laugh!

Courtesy: Broad Street Journal, Nigeria.

Foot note: Ndudi Osakwe, Infoplus/IBG Nigeria was in Shanghai, China, November 2008 on a business development mission, given the increasing trade volume between China and West Africa, especially Nigeria, estimated to be in the neighborhood of Three Billion USD (US$3B). With economic growth rate still in double digits and over US$500B stimulus package, hopefully the Chinese economy can only get better.

You may view the photo gallery. China Goes to Africa here http://www.time.com/time/photogallery/0,29307,1884396_1854955,00.html