What Nigeria Can Teach Us About China’s Belt and Road

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What Nigeria Can Teach Us About China’s Belt and Road

Each country must exercise agency to fully capture the benefits of the BRI. So far, Nigeria hasn’t.

What Nigeria Can Teach Us About China’s Belt and Road

In this Friday, March 11, 2011 photo, a Chinese contractor, foreground, points to a spot on a railway track for a laborer to work on in Lagos, Nigeria.

Credit: AP Photo/Sunday Alamba

China’s presence in Africa has sparked widespread debate about whether Beijing is a development partner or a new neocolonizer. For the most part, such a debate has left out the role African nations themselves play in this relationship.

Such a relationship is essential for both sides. African economies receive China investments and aid, exemplified by the Belt and Road Initiative (BRI). At the same time, China gets access to crucial resources, export markets, and international support for issues the Chinese regard as sensitive, including the One China policy, human rights violations in Xinjiang, and suppression of democratic institutions in Hong Kong. However, the relationship between China and any single African nation is severely unbalanced in favor of Beijing.

China has been the preferred partner for many African nations due to its deep pockets, “non-interference” principle, and rhetoric of its benign intentions. This has been exemplified by China’s 2021 Africa White Paper, which claimed that Beijing’s goal on the continent is “giving more and taking less, giving before taking, and giving without asking for something in return. It [China] welcomes African countries aboard the express train of China’s development with open arms.”

While those sentiments are admirable, the question remains: How can African nations extract maximum benefits from such an unbalanced relationship? Extracting benefits must go beyond accepting Chinese aid, investments, capital, and technology for grand infrastructure projects. What is needed is the practice of local agency, that is, looking to exert influence to extract maximum benefits. This would call for the government to emphasize the localization of BRI projects, such that political, social and economic actors are active participants.

In that regard, Nigeria is a case study for what happens when an African government fails to exert its influence to shape its relationship with China to meet the needs of local people.

Beijing and Abuja have been strategic partners since 2006, and their economic relationship has blossomed in what both sides would generally consider a “win-win.” In trade and investment, China has become a significant player in Nigeria, and in the case of development assistance, it has grown to be Nigeria’s preferred partner.

In particular, China has been Nigeria’s go-to source of funding to restore its dilapidated infrastructure, with Abuja formally joining the BRI in 2018 during the Forum on China-Africa Cooperation (FOCAC) Summit in Beijing. China and its economic actors, especially the China Civil Engineering Construction Corporation (CCECC), have become the heart and soul of Abuja’s infrastructure reconstruction ambitions. Beijing has played a leading role in the construction of the Kaduna-Kano railway line (at a cost of $1.7 billion), Lagos-Kano railway line ($6.7 billion) and Lagos-Ibadan railway line ($1.5 billion). China’s role is not just limited to railway lines; even in the construction of airports and ICT infrastructure, Chinese companies have assumed a leading position.

The benefits are clear. Nigeria receives much-needed public goods that will stimulate economic activity. On numerous occasions, Nigeria’s political elites have thanked China for its assistance. However, not everything is rosy. Apart from the issue of debt sustainability, the BRI’s operationalization in Nigeria has been a black box to local actors, preventing them from taking part in decision-making and project implementation. For instance, according to an Afrobarometer survey, only 28 percent of Nigerians are aware of Chinese “loans/development assistance” in their country, which is far below the 33-country average of 47 percent.

Even Nigeria’s national legislature laments the lack of transparency concerning loan agreements signed between the executive and Chinese state banks. This follows a trend outlined by AidData: Chinese loan agreements tend to have “far-reaching confidentiality clauses.” Nigeria’s weak institutional capacity has resulted in BRI projects being mired in secrecy, corruption, and blatant disregard for domestic laws.

As a result, for all the mega-projects China has undertaken in Nigeria, there is a lack of comprehensive links back to the domestic economy. In general, Chinese development assistance is tied to Chinese companies, technology, and capital, which threatens to crowd out indigenous economic actors. Already we see Nigerian construction companies venting that they are ostracized from BRI projects. Rotimi Amaechi, Nigeria’s transport minister, responded by calling on these companies to build their capacity to undertake such large-scale projects. In reality, such domestic companies are functioning within a system that places them at a disadvantage.

As Temitope Runsewe, the managing director of Dutum Company Limited, a Nigerian engineering and construction firm, noted, “These Chinese companies show up with cheap funds from China… They will say to our government just show us the projects and we will mobilize ourselves and start constructing. This is extremely tempting and most of our government officials just fall for that at the detriment of building local capacity.”

This tendency at times directly conflicts with Nigeria’s 2007 Public Procurement Act, which states that biddings should be competitive, open, and transparent. Recently, a situation arose where Amaechi, Abubakar Malami, Nigeria’s minister for justice and attorney-general of the federation, and the CCECC were taken to court over procurement irregularities pertaining to the awarding of a contract to CCECC to construct a 190-kilometer narrow gauge track from Minna in Niger State to Baro worth 91.7 billion Nigerian nairas (around $210 million). So far, the government has also shown an unwillingness to enforce local content requirements in BRI projects. For instance, Nigeria’s House of Representative committee on Treaties, Protocols, and Agreements argued that in the loan agreements under review, no signs of local content requirements were found.

This shows that the agency practiced by the Nigerian government, as Ian Taylor noted, can be described as “agency-as-corruption.” The actions and inactions of those in power benefit the few at the expense of the many. This was symbolized by Amaechi’s request that Chinese loan agreements should not be scrutinized, as “they are sensitive to what you say.” He argued that any criticism may scare away Chinese development assistance. Such an attitude symbolizes the government’s lack of the political will needed to exercise agency that would localize the BRI.

The question that arises is whether Nigerians are getting the best possible deal out of their government’s relationship with China. As a World Bank report on the BRI noted, the risks associated with the BRI – debt sustainability, stranded infrastructure, and the harming of local communities and the environment – are exacerbated by the presence of weak domestic institutions and the accompanying growth-hindering corruption. Hence, to reap the maximum benefits from the BRI, what is required are good governance practices that advocate for openness, transparency, adherence to domestic procurement laws, and the need to emphasize local content requirements.

Yet, as seen from the above analysis, this is not the case in Nigeria. The lack of public consultation and the tendency to take backdoor channels to approve projects has resulted in largely disjointed infrastructure projects that are “largely inaccessible to the public while also not operating in the way public utilities are intended to operate.”

China’s insistence on refraining from criticizing bad governance practices and, in other cases, being an accomplice to those practices requires us to question what type of partner China really is. However, as the above analysis shows, this is not a one-way street – the political elite in countries like Nigeria are also to blame for their lack of agency.