Nigeria-China deal: FG attracts $25bn in investment

The Federal Government has attracted over $25 billion in investment, including the $20 billion Memorandum of Understanding (MoU) signed between Power China and the Ministry of Power to generate for Nigeria  20,000 megawatts of electricity, following President Goodluck Jonathan’s trade mission to China last week.

According to Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, during the visit,
  Bauchi State signed MoU with China Machinery Engineering Corporation (CMEC) for the provision of 120 megawatts of electricity at an estimated cost of $260 million.

However, Aganga, at the weekend, in China, described the deal with Power China as most ambitious, noting that it was the highest power agreement the federal government signed with any international firms, adding that government had earlier had similar deals with General Electric, Electrobras of Brazil and Siemens.

“If you compare that (to earlier agreements) that is the biggest MoU we have signed on power. And I must say that Power China is the largest power company in China and a major player in the power sector. If you look at that and complement it with the fact that we signed a 10,000 megawatts agreement with General Electric; with Electrobras in Brazil and with Siemens, you can see that the future...it won’t take too long for us to address the issue of power,”  he said.

During the visit, First Bank of Nigeria Plc also signed an  agreement with China Development Bank for the provision of $100 million facility meant to be dispensed as loans to Small and Medium Scale Enterprises (SMEs) in Nigeria.
Aganga described the loan as very important because SMEs is the powerhouse of any economy, including that of Nigeria.

“SME is a major economic drive, especially in a developing country like Nigeria. Today we have about 17 million SMEs in our country, employing close to 32 million people. So when we talk about job creation, the real sector to focus on is SME. That $100 million is made available through First Bank,” he added.

Other MoU signed include those between Ladol and China Offshore Oil Engineering Corporation (COOEC) to develop a dry dock facility in Lagos and Bayelsa States and between China Great Wall and a Nigerian company for the manufacturing of transformers in Nigeria in addition to the agreement signed between the Ministry of Aviation with China Civil Engineering Construction Corporation (CCECC) for the construction of four international terminals at the four major airports in Nigeria.

Besides these agreements, Aganga said there were other discussions that the federal government  had with investors that did not lead to the signing of MoU, adding: “But there was a clear understanding and MoU will be signed very soon. One of such is with Seco and Pacific Energy. Pacific Energy is the largest in terms of coal to power and you would know that in China most of the sources of their power is coal.

"They are also committed to working with us to generate power from coal and their commitment is to generate 5,000 megawatts of power at the cost of, in today’s terms, about N5 billion. They are also planning to set up their regional office in Abuja.”
The minister explained that the mission to China accomplished things for Nigeria in three areas:  politics, diplomacy and economic.

“There is the political angle; there is the diplomatic angle and the economic angle, which is about investment. The engagement was at the highest level. It is very, very important that the engagement was at the presidential level. Of course, the first major item was the bilateral discussion and the signing of about five agreements with the Chinese government. The bilateral discussion covered a lot of diplomatic, economic and political issues,” he added.

Aganga described the China mission as the most successful because of the large turnout of investors who were willing to come and do business in Nigeria, adding that Chinese companies already doing business in Nigeria travelled to China to meet with Jonathan, including CCECC which already has 10 projects in Nigeria worth $10 billion.
Meanwhile, the Conference of Nigerian Political Parties (CNPP) has advised the federal government against being unduly  hasty or desperate in the country's rapprochement with  China.

The group in a statement by its National Publicity Secretary, Mr Osita Okecukwu, said although it welcomed Jonathan’s increased drive to partner  China, adequate caution should be exercised to checkmate the Chinese quest for neo-colonialism in Africa.

"It is the candid view of the CNPP that the history of colonialism has not changed and that every colonial master whether British, American or Chinese attach strings to aids and hence fuel her domestic economic growth.

"Accordingly, President Jonathan should be cautious, less hasty or desperate in the rapprochement with the Chinese; especially now that President Barak Obama seems to have not extended olive branch to his regime, " it said.

CNPP added that it was pertinent that Nigeria’s foreign policy objective should be structured for the long-term and not short-term goals, while the nation remains introspective in the utilisation of its natural resources.