Pains, gains of Nigeria’s non-oil trade with China

“China is doing more harm to Nigeria than good,” Samuel Udikong, a beverage marketer, told me in Lagos on December 9, 2016.

“How do you mean?” I asked.

“Almost everything imported into Nigeria from China is substandard or outright fake. Look at the light bulbs. Most of the ones we use here are from China. They hardly last longer than two weeks,” Udikong said.

“If you buy Chinese pair of shoes today, be ready to hand it over to a cobbler in the next two months,” he said, shaking his right fist.

“I recently bought a ballpoint pen made by China. It did not last for a week. I had to buy another one made by the United Kingdom. I am still using till today, two months after,” he added.

“But Nigerian consumers want cheap products,” I quipped.

“Consumers all over the world want cheap products.  Last year, a poll was conducted by Associated Press and GfK in the United States. The result of the poll showed that the majority of Americans preferred lower prices rather than paying a premium for products labelled ‘Made in USA’, even if it means bringing those cheaper items from abroad. So consumers are the same everywhere,” he argued.

I paused. Superior argument. Consumers are the same everywhere.

“But you have regulators, don’t you?” I asked.

“Leave those people. How will they even know that Chinese products are substandard? We are in trouble in this country,” he retorted.

Udikong’s sentiments capture the views of many Nigerians about China, world’s fastest-growing major economy. And facts support their sentiments.

In June 2015, the Standards Organisation of Nigeria (SON), Nigeria’s regulator of products, intercepted 10 containers of suspected fake baby diapers worth over N200million imported by three Chinese nationals.

In February this year, two Chinese men, Taolung Shen and Xu Jing Yao, were arrested by the SON in Lagos for alleged importation of fake and substandard tyres into Nigeria.

The Chinese company, Sino Nigeria Import and Export Limited’s warehouse, located in Lagos, was also sealed up by the SON.

Currently, importers of fake tyres from China that killed James Ocholi, former minister of state for labour, are still at large, according to security sources.

The thinking among Nigerian populace, particularly consumers, is that China is the biggest importer of substandard products into Nigeria.

But trade analysts believe that Nigeria also shares the blame.

“The truth is that it is a mix of Nigerians and Chinese that are importing fake and substandard products from China. Nigerians go there and make their request and Chinese manufacturers give them what they want,” said Ede Dafinone, chairman of the Manufacturers Association of Nigeria Export Group (MANEG).

Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI), said it was a question of regulation.

“It is what Nigerians ask that China produces. It is a question of strengthening our own institutions to make sure they do what they are supposed to so,” Yusuf said.

China itself has recognised this phenomenon. In August 2016 Ren Xiaoping, a former Chinese Ambassador to Namibia, said measures were being taken to ensure that the goods exported from China to Africa were of good quality.

“We do not want Africa to think we only dump fake products in their markets. This is not the essence of the relationship,” Xiaoping said at the 2016 Seminar Course for Information Officers and Journalists from English-Speaking African Countries in Beijing.

However, Nigeria and China have enjoyed closer non-oil trade relations. The value of trade between Nigeria and China stood at $9.5 billion (about N3.53 trillion) in 2016, according to Zhao Linxiang, economic and commercial counsellor of the Chinese Embassy in Nigeria.

According to the National Bureau of Statistics (NBS), China had the largest import share into Nigeria (16.79 percent) in the first quarter (Q1) of 2017. Total Chinese exports to Nigeria in Q1 of 2017 were valued at N383.9 billion. China’s exports to Nigeria range from leather shoes to textiles and light bulbs.

But the trade is largely lopsided as China does not appear in Nigeria’s first five export countries, which include India, USA, Spain, Netherlands and France.

Checks show that China buys mostly raw materials from Nigeria, including animal skins, nuts and vegetables.

Similarly, China has pumped $ 2.2 billion dollars  into the Nigerian economy so far.

The immediate past federal government secured  $1.1billion from China Export-Import Bank for the construction of the Abuja light rail, the Federal Capital Territory Administration, the National Security Development System and four airport terminals. In February this year, Nigeria secured $1.5 billion counterpart funding from China for the Lagos-Ibadan rail project. The Asian country has also approved about $6.1 billion for Nigeria’s rail projects.

“A lot of capital has come into Nigeria from China,” said Yusuf, earlier cited.

“There have been many gains. A lot of government infrastructure projects are from China. We need to maximise these gains,” he said.

Ike Ibeabuchi, CEO of MD Services Limited, a servicing and manufacturing concern, said it was important to balance the trade.

“Nigeria should embark on road shows to enlighten Chinese investors on what Nigeria’s solid minerals, mechanised agriculture and manufacturing can do for them,” Ibeabuchi said.

 

ODINAKA ANUDU