Nigeria's and China's Strained Relations

Across Nigeria, low cost goods imported from China are rampant, further providing evidence of Beijing’s growing dominance in global trade. While the trade flow from China has helped to keep life affordable for some Nigerian families in times of economic stagnation and plunging prices, low quality and counterfeit products are becoming a major problem within the country. For example, dozens of fires each year can be connected to electrical wiring, outlets, and power strips from China found in the homes and offices of Nigerian citizens. Not only are poor quality items posing safety risks, but they are also taking away employment opportunities from workers in Nigeria.

Nigeria is Africa’s largest economy, which might be why President Xi Jinping was just recently in the country emphasizing economic diplomacy and committing $60 billion in development assistance. In the past, China has lent heavily to commodity-exporting countries, which are consequently struggling with low commodity prices currently. China’s manufacturing sector has also devastated many smaller rivals across Africa, Asia, and Latin America in the past. In fact, Xi’s pledge was considered by many to be aimed at ending criticism over the seemingly lopsided trade relationship between Nigeria and China.

The billions that China plans to funnel into Nigeria will be used to build and develop roads, railroads, airport terminals, power plants, and other forms of infrastructure that are desperately needed in the country. China is the top lender and importer to Nigeria, while other investors have turned away due to political instability and violence. As a result of this relationship, Nigeria has become the largest overseas customer of Chinese construction companies. Although the country is benefiting from the development of infrastructure, numerous issues have arisen in cities across Nigeria.

In Abuja, the capital of Nigeria, the new government is conducting anti-corruption investigations into large Chinese construction contracts signed by the previous leadership. Nigerian state governments are also struggling to pay for many of these projects, which could potentially expose China to loss. As mentioned previously, in Lagos, authorities are trying to eliminate inadequate Chinese electric goods. Imported power strips and wiring do not have the proper amount of copper to handle Nigeria’s 240-volt system, according to Wanza Kussiy, the chief safety officer of the Nigerian government’s Standards Organization, which could be why there have been so many fires recently. Finally, in Kano, there are masses of angry protesters that are blaming widespread unemployment on China, which is manufacturing African fabric designs for prices lower than Nigeria. In fact, employment in Nigeria’s apparel and textiles industry has decreased to 20,000 people from the 600,000 two decades ago.

Overall, Chinese goods are so dominant in Nigeria that consumers do not have many alternatives. Despite the higher cost of labor, $550 a month per worker, it is still cheaper and easier to mass-produce garments (and other goods) in China. Nigeria imposes significant tariffs on imported fabric, and electricity is unreliable, so operations must depend upon diesel generators which use fuel that is six times more expensive than in China. The Nigerian government wants to revive its manufacturing, with low oil prices for its exports being one of the country’s main strengths. However, with the odds stacked against them, it is more likely that Nigeria will be relying upon China for its goods and services at least in the near future.