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AT a time when Nigeria’s President Goodluck Jonathan was visiting China and American President Barak Obama was rounding off his tour of selected African countries, excluding Nigeria, a new book on the economy Emerging Africa: How the Global Economy’s last frontiers Can Prosper was released.
The book by Kingsley Moghalu, a Deputy Governor at the Central Bank of Nigeria highlights major causes of African underdevelopment from what he called “failure to develop, articulate, internalise and propagandise a world view.”
When it comes to image-building, a national leader must rise up and project the dignity of his country as a nation to be reckoned with in global politics without being too overzealous or confrontational like the late Muammar Ghaddafi of Libya, Saddam Hussein of Iraq and Roberts Mugabe of Zimbabwe. Apart from the undisclosed politics behind the Chinese tour, President Goodluck Jonathan, who led a multi-sectoral high-powered delegation comprising influential cabinet members, chieftains of industries, governors and politicians to the Asian superpower, also met and invited top executives of several Chinese conglomerates to initiate fresh investments in Nigeria.
At the end of the tour, Jonathan and his Chinese counterpart, Xi Jinping, presided over the signing of five agreements to boost financial, trade, economic, technical and cultural relations that could expand Nigeria’s domestic manufacturing capacity.
The questions on many lips are whether Nigeria is now tilting more towards Asian Tigers rather than its traditional allies in the West. Moghalu’s book points out that the idea of socialism in Asia and capitalism in the West do not really matter as most countries practice different types of capitalism. He noted that state capitalism is practiced in China; crony capitalism in Russia and to some extent, Nigeria; welfare capitalism in Europe and entrepreneurial capitalism is practiced in the United States.
An African country like Nigeria, the author insisted, must develop its clear worldview based on fundamental understanding of globalisation that will enable it to identify and protect its interests. He also warns African leaders against turning their countries to a destination of consumers of the products of globalisation.
Nigeria as the most populous country in Africa is a strategic partner to both America and China who are recognised as military and economic superpowers. A recent report in The Guardian of London disclosed that “China’s GDP per capita was $9,100, whereas the US boasted a figure of $48,900. There is also an extreme contrast in the respective current account balance – the US has the world’s largest deficit burden, while China has the world’s greatest budget surplus.
In its series of exclusive interviews with top diplomats in Nigeria, the Economic Confidential magazine published interviews with US Ambassador to Nigeria, Terrence P. Mc Culley and his Chinese counterpart, Ambassador Deng Boqing in November and December 2012, respectively.
The two top diplomats in the separate interviews agreed that Nigeria has enormous internal and huge regional market for foreign investors. They also admit that one of Nigeria’s most important resources, outside oil and gas, is its energetic, dynamic and diverse people who have remained together despite speaking over 250 languages by different ethnic groups.
While Amb. McCulley explained that U.S. development assistance to Nigeria exceeds $600 million with more than $5 billion in U.S. investment, the Chinese Ambassador told the same magazine that the accumulated investment from China exceed US$10 billion while its non-financial direct investment was $8.7bn as at December 2012.
Surprisingly while Nigeria is the fifth largest crude oil supplier to USA, its crude export to China is relatively lower, which only constitutes 1% to 2% of Nigeria’s total crude export. Meanwhile, Nigeria is the fourth largest trade partner and the second largest export market for China in Africa. In 2011, Nigerian farmers exported 1.1million metric ton of cassava chips to China.
The United States supports Nigeria’s national priorities, especially the national security. Apart from supporting the health sector in containing malaria, eradicating polio, and helping millions of Nigerians living with HIV/AIDS, through USAID, the American government has an agric-sector programme called MARKETS, which supports farmers needing technical assistance to improve crop yield. It is also committed to assisting Nigeria’s efforts to reform the power generation and hydrocarbon sectors.
On the other side, China’s wide range investment covers sectors such as petroleum, free trade zone, iron and steel, agriculture, manufacturing, pharmacy and mining. It has offered to establish three petroleum refineries in Bayelsa, Kogi and Lagos states and is committed to other projects which include railway rehabilitation, power generation, telecommunications projects as well as the provision of houses in Nigeria.
Ambassador McCulley added that “Nigeria is a country blessed with both abundant human and natural resources, and the United States seeks partnership not dependency; we seek to build capacity not undermine local initiatives.”
The Chinese Ambassador stated that “China has been an active player in economic globalization and integrated itself with the rest of the world with an open attitude, strengthened exchanges and cooperation.”
While America is deeply involved in democratic or political processes in many countries, China is more concerned with business interests, especially in developing countries. As the second largest economy in the world with the foreign exchange reserve reaching US$3 trillion, China has enormous capacity to invest outside its shore. Its increasing investment in Africa is influenced by the reluctance of traditional economic partners such as US, Europe to invest in the continent due to their debt crises.
Nigeria should not only look towards the East or the West alone, it should also create an enabling environment to attract genuine investors devoid of diplomatic rhetoric and political grandstanding. It should also encourage more export of non-oil item, especially agriculture products. The government should explore pragmatic means of turning Nigeria into a major manufacturing zone in Africa.
As Moghalu recommends in his book, the major essentials should be infrastructure, power sector and education with certain conditions and appropriate economic policies to protect national resources and so that Nigeria or Africa is not the ‘last frontier’ for economic exploitations.
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