As Nigeria moves towards industrialisation targeting agriculture and manufacture sectors, the Emir of Kano visits China to seek investments for the country. At the Nigerian Embassy he urges the government to seek investments that would support its shift from primary production to major manufacturing. BUKOLA OGUNSINA writes…
Africa has been a beneficiary of funds from China to include the 60 billion US dollars made available after the Johannesburg Forum On China Africa Cooperation. China offered about $4 billion concessionary loans in total to Nigeria to finance key projects such as Abuja-Kaduna Railway, Abuja Light Rail, and Lagos Rail Mass Transit System among others.
Nigeria requires more investments across states in each region of the country, which will in turn drive development of the others around it eradicating poverty and insecurity. The Emir of Kano Muhammadu Sanusi II believes that Nigeria should seek active investments to this end, to which China can profit from, rather than loans. Nigeria needs to resolve its problems of electricity, infrastructure and poverty alleviation.
On invitation of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), the Sarkin Kano visited China in August with the aim of establishing a platform for partnership which would create a win win situation. Chinese investors will be supported to come to Nigeria and especially Kano to invest in various sectors.
“The reality is if you look at Africa, we are 54 countries. Some countries in Africa have the relationship with China right, others have it wrong,” His Highness indicated during a visit to the Nigerian embassy where he was received by the new Ambassador of Nigeria to China, HE Baba Ahmed Jidda.
“If ask China for loan, they will give you a loan. If you ask for aid, if they can give you aid they will give you. If you ask for investment they will give you investment. At the end of the day, African nations have to take responsibility for how they define their relationship with China. The Chinese have a policy of non-interference in your own internal affairs.”
The Emir explained that presently, labour costs in Nigeria is far cheaper than in China, “That means that Africa has the great opportunity now to move manufacturing in certain sectors from China to Africa,” he enthused. The Emir in his analysis as a seasoned economist disclosed that China is forced by the nature of prosperity to move away from low value manufacturing to high value manufacturing. And since the economy is going to be more of services, high technology, China can come to Kano to produce.
“It’s a great opportunity for the African countries who understand this to come to China and say ‘we want you to come and set up production facilities in our countries,’ rather than ‘come and lend us money’,” he maintained.
“Countries like Ethiopia have engaged with China in that way. Sudan just discovered oil some years ago, and has worked with the Chinese to build oil refineries, petroleum pipelines. We are importing. The Sudanese were wise enough to say to the Chinese, ‘You know instead of just coming to buy our crude, come and refine it for us and it has created wealth in Sudan.
“When I was governor of CBN I felt Nigeria and China should be doing what China is with Ethiopia. It’s up to us as Nigerians to actively seek investments.”
The Emir revealed that Kano’s industrialisation is on the moribund as it used have the biggest textile market in West Africa, and sold textiles to countries such as Burkina Faso, Mali and Sudan among others. He noted that the three major industrial estates in Kano are now ghost towns. Part of the reason being poor infrastructure, lack of power among others.
Investments would change this as well as cut down transportation costs and bring about job creation for locals. The Sarkin Kano noted, “The cost of power, diesel, infrastructure the corruption, lack of security, the bad roads. In fact it is cheaper to transport goods from China to Lagos, than to transport them from Lagos to Kano.
“Many of the problems we have in Nigeria are self-inflicted, but far more important is I think an economic model that we have had in the last few decades, whether deliberately or otherwise, has totally destroyed the system and introduced perverse incentives.
“In 2011 Nigeria earned 16 billion dollars from the export of crude oil. In the same year we spent 8 billion dollars as petroleum subsidy and another 8.2 billion dollars to actually import the petroleum products. We spent 16.2 billion dollars between fuel imports and fuel subsidy while we earned 16 billion, the entire earnings for that year from oil went back to import petroleum oil or pay subsidy.”
The Emir stated that even though some had innocently believed the subsidy was for the poor, they could not be blamed. Again it was bad for the naira to be weak but far better that than having to pay the bigger price of high inflation, low production and creation of overnight billionaires.
“Now let’s even assume there was no corruption in the subsidy, if you’re spending 8 billion dollars on fuel subsidy and the same ministry spending 8 billion dollars on fuel subsidy is responsible for gas. It could not build gas pipelines for our power stations. If we had to make a choice between spending money and subsidising petroleum products or spending money building gas pipelines so that we would have electricity which would then build manufacturing, and then create jobs which will lead to growth, which should we choose?
“But I learned at that time, I was almost crucified by Nigerians, by the poor people in Nigeria who were saying that those who were fighting against subsidy were anti poor, when in fact that policy never benefitted the poor people, not in the short term and not in the long term, it was just a scam.”
He also noted that when dollars are sold at N200 when people are selling at N300, N400, the poor people do not benefit from it. It becomes very easy to make money and no incentive to go into production which discourages manufacture. “Now the problem of those policies is that we have therefore not defined our own economic programme in a manner that allows us take advantage of the great opportunities that China offers,” he said.
China moved away from primary production to manufacture in the first stage. “We have to focus clearly on poverty reduction, and we have to focus on availability of electricity. Those are the three issues, electricity, manufacturing and poverty reduction,” the Emir said. China focused on its development of certain provinces which in turn as they are now developed, contribute towards alleviating poverty in poor regions of China.
“If there is any message I have for you as an embassy, it is that your economic diplomacy both dealing with the Chinese government and Nigerian government should aim at encouraging that shift away from looking for loans, to find the current economic structure to look for investments that will help us change the structure of the economy.
“If you continue producing cotton and selling and importing garments and selling, you get 10, 20 percent of the value of that product. While he who processes gets 80 per cent. And what we try to do as a nation is to shift more and more of that value to us.”
The Chinese Foreign Minister Wang Yi said during the 5th Session of 12th Chinese People’s Political Consultative Conference/National People’s Congress in Beijing that the China-Africa Cooperation was undergoing three shifts. One among them was from engineering contracts to capital investments and operations. Noting that these shifts will provide new momentum and opportunity for Africa’s sustainable development. China’s current investments in trade zones in Nigeria is over 460 million US dollars, the Chinese Ministry of Commerce confirmed this year 2017. The Deputy Director of the Department of West Asian & African Affairs, Ministry of Commerce in China, He Jun mentioned the two trade zones established namely Lekki and Ogun, in Nigeria.
The Emir said his team will be looking for Chinese investors seeking a foothold in Africa and then talk to the government, who will in turn bring to the forefront what the expectations of the Chinese are, as well as what other African countries are offering China. “We need to engage the governors who are the ones that will commit,” he said, revealing there will be a follow up visit by the governor of Kano State. He also pointed out that a unified exchange rate is vital for investments between both countries. “We have a wonderful opportunity with a country that has become the second largest economy in the world and has a positive attitude towards Africa,” he said.
The Emir visited Provinces of Guangdong and Shanghai ending his visit in Beijing. He was accompanied by Wamban Kano, Alhaji Aminu Ado Bayero, the Dunburam, Sarkin Shanu, Alhaji Shehu Mohammed Dankadai, Dan Maje Alhaji Yahaya Inuwa Abbas, Dan Maliki, Amb Ahmed Umar, the Permanent Secretary Ministry of Commerce, Industry, Cooperatives and Tourism, Baba Halilu Dantiye, the Managing Director of Kano State Property Investment Ltd. KSIP, Dr. Jibrilla Mohammed and the Emir’s Chief of Staff, Munir Sanusi.