Nigeria to benefit from $12bn Chinese Africa infrastructure fund

Chinese Premier Li Keqiang has promised his country’s assistance in providing robust infrastructure transformation for Nigeria and other African states.

To signal how seriously China, the world’s second-largest economy, takes its growing ties with Africa, Keqiang announced new funding commitments of $12 billion to Africa and Nigeria, the biggest economy on the continent.

“We will add $10 billion to our already committed credit lines to reach a total of $30 billion and put an extra $2 billion into the China-Africa Development Fund to reach $5 billion,” said Keqiang in a powerful speech at the first plenary session of the World Economic Forum (WEF), Africa yesterday.

“We will provide 18,000 scholarships to Africa and train 30,000 professionals of various types. The Chinese government means what it says, our co-operation with Africa will be based on mutual benefit,” Keqiang said.

Keqiang is visiting Nigeria with a 100-man delegation for the WEF Africa.

The Chinese and African economies are complementary to each other, according to Keqiang, with Africa needing investments, and China having surplus.

To realise inclusive growth, which is the theme of the WEF, infrastructure, especially transportation, must be at the fore front, and China would assist Africa in building high-speed rail networks, Keqiang said.

Africa currently has 23 percent of the world’s landmass, but only 7 percent of global rail lines.

China would also provide assistance for building and expanding Africa’s express and motorways, as well as build out a regional aviation network for the continent.

“China proposes a China-Africa regional aviation plan through an aviation joint venture with African partners,” Keqiang said. China will also support the movement of labour-intensive Chinese industries and enterprises to Africa to help with job creation.

All the announced Chinese assistance would come with no political strings attached, according to Keqiang.

“We will not interfere in the local politics of any African country, or ask Africa for things which are impossible to observe or do. We will also ask Chinese firms to abide by the environmental and other laws of their host nations,” Keqiang said.

This will be the Chinese premier’s first visit to Africa since taking office last year.

China is investing billions of dollars in Africa but Beijing has often been accused of exploiting the continent’s vast mineral and energy resources, at the expense of local people.

China has been Africa’s biggest trade partner since 2009. Bilateral trade stood at just under $11 billion in 2000. However, by 2006 this figure had jumped to nearly $60 billion, and last year bilateral trade had soared to $210 billion.

Chinese investment in African countries has also increased some thirty-fold in the past 10 years. Foreign direct investment went from $500 million in 2003 to almost $15 billion by 2012. And last year, China pledged $20 billion in loans for infrastructure development.

China’s willingness for deeper engagement with Africa means that Nigeria would be a significant recipient of such investment commitments, after emerging as Africa’s largest economy and most-populous nation.

Nigeria is already an advocate of some shift in its foreign exchange reserves, away from the dollar to the Yuan. Chinese firms are active in diverse areas of the Nigerian economy, including building infrastructure like roads, rails and bridges, steel, energy, mining and power.

The Lekki Free Trade Zone in Lagos also provides a big opportunity for Chinese firms to transplant some light manufacturing skills to Nigeria, and in the process create jobs and employment.

“We are ready to provide generous developmental assistance to Africa,” said Keqiang. “Nigeria and other African countries show a vast economic potential for the future.”

PATRICK ATUANYA