nigeria and the brics · 2016-05-03 · nigeria and the brics on the crucial subject of oil,...
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South African Instit
ute of Inte
rnat
iona
l Affa
irs
African perspectives. Global insights.
China in Africa Project
O C C A S I O N A L P A P E R N O 1 0 1
Nigeria and the BRICs: Diplomatic, Trade, Cultural and Military Relations
N o v e m b e r 2 0 1 1
A b i o d u n A l a o
A b o u t S A I I A
The South African Institute of International Affairs (SAIIA) has a long and proud record
as South Africa’s premier research institute on international issues. It is an independent,
non-government think-tank whose key strategic objectives are to make effective input into
public policy, and to encourage wider and more informed debate on international affairs
with particular emphasis on African issues and concerns. It is both a centre for research
excellence and a home for stimulating public engagement. SAIIA’s occasional papers
present topical, incisive analyses, offering a variety of perspectives on key policy issues in
Africa and beyond. Core public policy research themes covered by SAIIA include good
governance and democracy; economic policymaking; international security and peace;
and new global challenges such as food security, global governance reform and the
environment. Please consult our website www.saiia.org.za for further information about
SAIIA’s work.
A b o u t t h e C h I N A I N A F R I C A P R o J e C t
SAIIA’s ‘China in Africa’ research project investigates the emerging relationship between
China and Africa; analyses China’s trade and foreign policy towards the continent; and
studies the implications of this strategic co-operation in the political, military, economic and
diplomatic fields.
The project seeks to develop an understanding of the motives, rationale and institutional
structures guiding China’s Africa policy, and to study China’s growing power and influence
so that they will help rather than hinder development in Africa. It further aims to assist African
policymakers to recognise the opportunities presented by the Chinese commitment to the
continent, and presents a platform for broad discussion about how to facilitate closer
co-operation. The key objective is to produce policy-relevant research that will allow Africa
to reap the benefits of interaction with China, so that a collective and integrated African
response to future challenges can be devised that provides for constructive engagement
with Chinese partners.
A ‘China–Africa Toolkit’ has been developed to serve African policymakers as an
information database, a source of capacity building and a guide to policy formulation
SAIIA gratefully acknowledges the generous support of the main funders of the
project: The United Kingdom Department for International Development and the Swedish
International Development Cooperation Agency.
Project leader and series editor: Dr Chris Alden, email: [email protected]
© SAIIA November 2011
All rights are reserved. No part of this publication may be reproduced or utilised in any form by any
means, electronic or mechanical, including photocopying and recording, or by any information or
storage and retrieval system, without permission in writing from the publisher. Opinions expressed are
the responsibility of the individual authors and not of SAIIA.
Please note that all currencies are in US$ unless otherwise indicated.
A b S t R A C t
The increasing involvement of the emerging powers of Brazil, Russia, India and China,
collectively called the BRICs, in Africa is a much-discussed topic. This is especially so in
relation to key issues of how African governments have perceived this relationship, how
the competitions between these emerging powers have played out on the continent, and
how other local stakeholders on the continent have viewed the growing dominance of
the BRICs in Africa’s socio-economic activities. These issues have become more profound in
countries that are also regional power blocks on the continent.
The paper explores the relationship between the BRICs and Nigeria, undoubtedly one
of Africa’s key countries and one that is also an aspiring member of the expanded BRICs. It
considers the relationship in the areas of economic relations, diplomatic contacts, cultural
and social dealings, and military collaborations. The paper also looks at the links between
Nigeria and the BRICs on the crucial subject of oil, Nigeria’s primary natural resource, and
the complex politics that surround the exchange of oil for development. It concludes that
despite the efforts to portray a smooth relationship between Nigeria and the BRICs, there
have been areas of difficulties. Occasional hiccups still exist between Nigeria and the
BRICs, and among the BRICs themselves in their bid to gain the upper hand in the Nigerian
market. However, in the long term all parties are confident of the continuing development
of mutually beneficial relations.
A b o u t t h e A u t h o R
Abiodun Alao is a senior research fellow at the Conflict, Security and Development Group
at King’s College, London. He has written extensively on African security issues. His published
books on the subject include Natural Resources and Conflict in Africa: The Tragedy of
Endowment;1 The Mau-Mau Warrior;2 The Burden of Collective Goodwill: The International
Involvement in the Liberian Civil War;3 Brothers at War: Dissidence and Rebellion in Southern
Africa;4 Peacekeepers, Politicians and Warlords: The Liberian Peace Process;5 and Africa
After the Cold War: The Changing Perspective on Security.6
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A b b R e v I A t I o N S A N d A C R o N y m S
BPE BureauofPublicEnterprises
BRIC Brazil,Russia,IndiaandChina
CCECC ChinaCivilEngineeringConstructionCorporation
CGCC ChinaGezhoubaGroupCorporation
CNOOC ChinaNationalOverseasOilCompanyLimited
DMC DisasterMonitoringConstellation
DRC DemocraticRepublicofCongo
EOI ExpressionofInterest
GDP grossdomesticproduct
GICC GeneticInternationalCorporationofChina
ICBC IndustrialandCommercialBankofChina
IT informationtechnology
KNOC KoreaNationalOilCorporation
LNG liquefiednaturalgas
MEND MovementfortheEmancipationoftheNigerDelta
MOU memorandumofunderstanding
NAFDAC NationalAgencyforFoodandDrugAdministrationandControl
NTPC NationalThermalPowerCorporation
OMEL ONGCMittalEnergyLimited
ONGC OilandNaturalGasCorporationLimited
OPL OilProspectingLicence
OVL ONGCVideshLimited
PGCIL PowerGridCorporationofIndiaLimited
PHCN PowerHoldingCompanyofNigeria
SON StandardsOrganisationofNigeria
N I G E R I A A N d T H E B R I C S
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I N t R o d u C t I o N
Fewcountrieshavebeenheldinequalmeasuresofconsternationandadmirationas
Brazil,Russia,IndiaandChina,knowncollectivelyastheBRICs.Theextenttowhich
theyhavetransformedtheireconomiesandextendedtheirtentaclesacrosstheworld
withinarelativelyshortperiodhavebeensubjecttointenseinterestanddiscussion.7
Someviewtheirrapideconomicdevelopmentaspossibletemplatesforotherdeveloping
countriestoattaintheeconomicadvancementthathaseludedthemsinceindependence.
OthersbelievethataspectsoftheirpoliciescautionagainstusingtheBRICs(oratleast
someofthem)asmodelsfordevelopingnations.8
PerhapsthemostcontroversialofalltheBRICrelationships,however,havebeenthose
heldwithAfricancountries.Animportantissueiswhethertheserelationshipsaretruly
mutuallybeneficial–beyondtheplatitudinousdeclarationsbygovernmentsofrespective
sides.Anotheristhelong-termconsequencesoftherelationships.Concernsalongthese
linesareexpressedoftenacrosstheAfricancontinent.However, thesituationinkey
Africancountries,especiallyNigeria,SouthAfrica,Angola, theDemocraticRepublic
ofCongo(DRC)andAlgeria,areparticularlyprofound.Asregional‘hegemons’around
whichAfrica’srelationshipswiththerestoftheworldareoftengauged,BRICinteractions
withthesecountriesareofconsiderableinterest.ThepaperreviewsNigeria’srelationship
witheachoftheBRICcountries,especiallyintermsoftradeandcommercialrelations,
bilateralagreementsandmilitarylinks.Itexamineshoweachcountryhasrelatedwith
theNigerianpopulationandhoweachis,inturn,perceivedbyNigerians.Finally,the
paperundertakesacomparativeassessmentoftherelationshipamongthefourcountries
themselvesintheirbidtocaptureNigeria’smarketandattention.
K e y C h A R A C t e R I S t I C S d e t e R m I N I N g t h e R e l A t I o N S h I P b e t w e e N N I g e R I A A N d t h e b R I C S
Byanystandard,NigeriaisanimportantAfricancountry.Withalmost140millionpeople,
thecountryisbyfarthemostpopulousonthecontinent.However,whatgivesNigeriathe
greatestrecognitionisitsenormousnaturalresourceendowments,especiallyinoiland
naturalgas.Itistheworld’sseventh-largestoilproducerwithoneofthelargestdeposits
ofnaturalgas.Indeed,oilprovidesmorethan95%ofNigeria’searnings.Othernatural
resourcesincludecolumbite,palmproduce,groundnutsandfertilelandforagriculture.
Thecountryalsohasanactiveandarticulatepopulation.
Nigeriahasanumberofinternalchallenges,whicharereflectedinitsrelationswiththe
BRICs.Ithasover250ethnicgroups,andpastmanagementofethicdifferencesresulted
inacivilwarthatwasoneofAfrica’smostbitterconflicts.9Althoughthewarendedmore
thanfortyyearsago,ensuringethniccohesioncontinuestobedifficult,owinglargelyto
remainingdifferencesthatreflectthedivisionofthepast.Nigeriahasbattledtomanage
itsabundantnaturalresources.Resource-producingcommunitiesbelievethattheyarenot
derivingsufficientbenefitsfromthedeposits.10Thishasresultedinmajorinstabilityinthe
oil-producingregionsofthecountry.Managementoftheresourceshasalsooccasioned
massivecorruption,whichisbelievedtohavepercolatedthebodypolitic.11Nigeriahas
experiencedpoliticalinstability,withmorethanhalfthepost-independenceperiodspent
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undermilitaryrule.Althoughthelastdecadehaswitnessedcontinuouscivilianrule,there
havealsobeenallegationsofelectoralmalpractices.However,theApril2011elections
havebeenconsideredoneofthebesteverconductedinthecountry.12
The country’s infrastructure is ineffective.Transportation isweak, evenby third
worldstandards;electricityisepilepticandmedicalservicesarepoor.Despiteitswealth,
Nigeria’sGDPremainsbelow$3,000.Lifeexpectancyandinfantmortalityratesare47
yearsand91.54deathsper1 000birthsrespectively.Althoughthemilitaryisstrongby
Africanstandards,13yearsofinvolvementinpoliticshaveerodedprofessionalism.Thishas
necessitatedconsiderablereformsincethereturnofcivilianrule.Itisthedesiretoaddress
someofthesechallengesthatdetermineaspectsofNigeria’srelationshipwiththeBRICs.
TheBRICsarefarmoreadvancedthanNigeriaonvirtuallyall fronts.Althougha
largecountrybycontinentalstandards,NigeriaisstillsignificantlybehindtheBRICs,as
reflectedinTable1.
Table 1: Overview of Nigeria and the BRICs
Nigeria Brazil Russia India China
Population 138 million 190 million 140 million 1.15 billion 1.43 billion
GDP per person $2,500 $10,800 $15,900 $3,500 $7,600
Infant mortality per thousand
91.54 21.170 10.8 47.57 16.6
Life expectancy (years)
47.56 72.53 66.29 66.8 74.68
Key imports Machinery, chemicals,
manufactured goods
Machinery Machinery, iron and
steel
Crude oil, fertiliser
Crude oil, mineral fuel,
metal, organic
chemicals
Key exports Petroleum, cocoa, rubber
Transport equipment,
coffee
Wood and chemicals
Machinery, iron and
steel, chemicals
Electrical and other machinery,
textiles, iron ore
Source:Author’sown
InalltheBRICs,thereisameasureofpoliticalstability,astrongmilitaryandanimpressive
levelofinfrastructuralstandards.Levelsofcorruptionaresignificantlylowandallare
appreciablyaheadinareasoftechnologicaladvancement.Indeed,insomeoftheBRICs
thestandardofadvancement iscomparabletoandsometimesevensurpassesthatof
WesternEuropeoreventheUS.However,economicadvancementhascomeataprice,
asthereisoftentheconstantneedforenergysupplytomeetthedemandsofgrowing
technologicaladvancement.Itisagainstthisbackgroundofwhatonecountrypossesses
andtheotherlacksthatthepaperexaminestherelationshipbetweenNigeriaandBRICs,
startingwithBrazil.
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N I g e R I A ’ S R e l A t I o N S h I P w I t h e A C h o F t h e b R I C S
This section discusses key issues such as diplomatic relations, trade connections
(especiallyastheserelatetoNigeria’svast,andoftencontroversial,oilandgasresources),
majorbilateralagreements,involvementinNigeria’sinfrastructuraldevelopment,cultural
links,militarycontactsandofficialrelations.
N I g e R I A A N d b R A z I l
Ofallfourcountries,BrazilandNigeriasharethelongesthistory.Duringtheinfamous
slavetradebetweenthe17thand19thcenturies,manypeoplewerecapturedfromwhat
laterbecameNigeriaandenslavedinBrazilianplantations.Asaresult,Brazilnowhasthe
largestpopulationofblacksintheworldoutsideNigeria.Indeed,itisbelievedthatmost
blackstakentoBrazilduringtheslavetradeoriginatedfromthesouth-westernpartsof
Nigeria.TheYorubalanguageisverypopularamongBraziliansandmanyconsiderNigeria
astheirhistoricalhome.AtNigeria’sindependencein1960thetwocountriesestablished
diplomaticrelationsatambassadoriallevels.Relationsremainedrelativelybasic,centred
more on cultural sentiments and historical affinity than on any deep commercial
connection.However,duringthisperiodbothcountriesfollowedastonishinglysimilar
patternsofdevelopment.Bothexperienceddecadesofmilitaryrule;bothmodelledtheir
constitutionsalongthelinesoftheUS;bothhadpowerfulcentralgovernments;andboth
hadartificiallycreatedcapitalcities.Inthelastdecadeotherissueshavebroughtthese
similaritiestotheforefrontofattention.
Sincetheearly2000stherelationshipbetweenNigeriaandBrazilwasbasedonthree
mainconsiderations.ThesewereBrazil’srisetoglobalimportanceasamajoreconomic
power;Nigeria’sappreciationofwhatitcouldgainfromBrazilinitsownsearchforsocio-
economicdevelopment;andBrazil’sneedforNigeria’snaturalresourceendowments.In
addition,therecentincreaseintradeandcommerciallinksbetweenthetwocountrieshas
revitalisedincreasinglystagnantculturalandhistoricallinks.
Diplomatic relations
ThefirstfewyearsfollowingthereturnofdemocraticruletoNigeriainMay1999didnot
giveanyindicationofthestrongdiplomaticrelationsthatwereabouttounfoldinNigeria–
Brazilrelations.Althoughbothsidescontinuedtocherishhistoricalandeconomiclinks,
therewasinitiallynoboisterousdisplayoffriendship.BrazilwasthelastofalltheBRICsto
bevisitedbytheNigerianpresident;andthiswasnotevenuntilhissecondterminoffice.
However,despitetheabsenceofofficialcontactatthehighestlevels,cordialdiplomatic
relationscontinuedbetweenthetwocountries.Thiswasenforcedbytheobviouspro-
AfricanforeignpolicyadoptedbytheBrazilianPresidentLuizInácioLuladaSilva,after
heassumedofficein2002.14
ThefirstmajordiplomaticconnectionbetweenthetwocountriescameinJanuary
2005,whena14-mandelegation ledbytheBrazilianMinisterofExternalRelations,
CelsoAmorim,visitedNigeria.AlthoughthemeetingwastobeaprecursorforPresident
DaSilva’svisit,NigerianPresidentObasanjousedtheopportunitytodiscussissuesof
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commoninterest.ThisincludedapromisethatNigeriawouldco-operatewithBrazilon
thesubjectofUNreforms.Thefirstmajorclimaxoftherelationshipbetweenthetwo
countrieswasinApril2005,whenPresidentDaSilvapaidatwo-daystatevisittoNigeria.
Thisgavethepresidentstheopportunitytolaythefoundationfordiscussionsthattook
placeduringPresidentObasanjo’sreciprocalvisitinSeptember2005.
TherelationshipbetweenNigeriaandBraziltookamajorleapforwardinSeptember
2005whenthetwopresidentssignedabilateralagreement.Thisfocusedonfourmajor
areas of trade and investment, technical co-operation, cultural revival, and regular
politicalconsultations.Becauseof itshistorical linkswithAfrica,Brazilalsowanted
NigeriatoprovideteacherstoteachAfricanhistoryinBrazil.Duringthevisit,Obasanjo
notedthatbothcountrieswereintheprocessof‘re-ignitingthegoldenyearsofNigeria–
Brazilrelationsofthe1980s’.15Sincethen,thevalueofbilateraltradehasreachedover
$2billionandthejointco-operationprofilehascoveredvirtuallyeveryfacetofhuman
activity.16Obasanjousedtheopportunityofthevisittocallfordiplomaticeffortstorevive
theSouthAtlanticPeaceandCo-operationZoneandcommittedtheNigeriangovernment
toconveningan inaugural summitof leaders fromAfrica, theCaribbeanandSouth
America.OtherNigerianleaderswhohavevisitedBrazilincludetheformerlatePresident
UmaruYar’AduaandcurrentVice-PresidentNamadiSambo.
Table 2: Diplomatic visits by Nigerian leaders to Brazil, May 1999 to May 2011
Date Leader Focus of discussion
September 2005 President Obasanjo Participation in the commemoration of Brazilian National day
August 2009 President Yar’Adua Bilateral discussions
January 2011 Vice-President Namadi Sambo Bilateral discussions
Source:Author’sown
Table 3: Diplomatic visits by Brazilian leaders to Nigeria, May 1999 to May 2011
Date Leader Focus of discussion
April 2005 President da Silva Bilateral discussions
November 2006 President da Silva To attend the 1st Africa South American Summit
Source:Author’sown
Asdiscussedlater,diplomaticexchangeshavefocusedontradeandculturalrelations
betweenthetwocountries.Subjectsofinteresthavealsocoveredotherareas.Forexample,
NigeriaandBrazilareworkingtogetherintheareaofdrugsandnarcoticscontrol.Both
countrieshaverealisedthattheircitizensandthosefromothercountrieshavebeenusing
NigeriaandBrazilasroutesfordrugs.Theseriousnessofthisproblemwashighlighted
inApril2010,bywhich timetheNigerianNationalDrugLawEnforcementAgency
hadplacedtheNigerian–Brazilrouteonredalertinabidtointerceptmovesbydrug
traffickingsyndicates.
N I G E R I A A N d T H E B R I C S
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Trade relations
AlthoughtraderelationsbetweenNigeriaandBrazilhavealwaysbeenasubjectofinterest
forbothcountries,therehasbeenaremarkableincreaseoverthelastdecade.Theimpact
ofthenewdawninNigeria–Braziltraderelationswasalreadynoticeableafterthefirstfew
yearsofcivilianruleinNigeria.Between2003and2005,Nigeria’smerchandiseexportsto
Brazilincreasedfromnearly$1.5billionto$5billion.ThismadeNigeriathefifth-highest
exporterofgoodstoBrazil,aftertheUS,Germany,ArgentinaandChina.Bycontrast,
however,Brazil’sexportstoNigeriaroseonlyslightly,reaching$643,000in2005.Both
sideshaveidentifiedanareaofmutuallybeneficialtradeintheareaofenergy.Nigerian
diplomatsinBrazilhaveidentifiedBrazil’sabilitytodevelopbio-fossilsanditsuseof
ethanolasanalternativetofuelasissuesofpotentialinteresttoNigeria.17In2008foreign
tradebetweenthecountrieswasestimatedat$8.2 billion.Braziliscurrentlythesecond-
largestimporterofNigerianproductsworldwide.
ThebulkofNigeria’stradewithBrazilisoilandgas;andNigeriaisBrazil’slargest
sourceofpetroleum.InitsrelationshipwithBrazil(asindeedwithalltheBRICs),Nigeria
hasendeavouredtotieitsoiltradewithBraziltoinfrastructuraldevelopment.Thisidea
wasfirstbroachedinAugust2009,whenthelateformerPresidentYar’AdualedaNigerian
businessdelegationtoBrazil.Duringthevisit,Nigeria’sformerMinisterofPowerand
Mines,LanreBabalola,saidNigeria’simmediateinterestwasBrazil’shugehydroelectric-
generatingcapacity.TheministeracknowledgedthatNigeria’senergypotentialhadyet
tobefullyharnessedintermsofarrivingatasustainableenergymix.Thiswouldenable
Nigeriatoreachitsgoalofmeetingtheenergyneedsofallitscitizens.Asdiscussedlater,
BrazilhasalsoparticipatedinopenbidstotakecontrolofNigeria’soilblocks.
Recentlytherehasbeenclosecollaborationbetweenthetwocountriesontheissueof
hydropower.ThejointagreementbetweenNigeriaandBrazilonenergyco-operationwas
signedwhenthelatePresidentYar’AduavisitedBrazilinAugust2009,followingwhich
anEnergyCommissionwasestablishedbetweenthetwocountries.Accordingtothe
NigerianVice-President,NamadiSambo,theobjectiveoftheCommissionistoassistin
revolutionisingtheNigerianenergysector.Brazilhasexpressedinterestincompletingthe
developmentoftheZungeruhydropowerplantandfinancingtheMambillahydropower
projectunderapartnershipthatwillallowthecountrytohelpdevelopNigeria’spower
industry.TheMambillaprojectwillbebankrolledby theBraziliangovernment from
scratchonaturnkeybasis.InreturnforBrazil’sparticipationintwohydropowerprojects,
NigeriawillgrantBrazilaccesstoitsoilandgasindustry.Thisisparticularlyimportantto
Nigeria,asthegovernmenthadearlierfailedinitspromisetodoubleelectricityoutputto
6 000megawattsbyDecember2009.18InJanuary2011,theVice-PresidentNamadiSambo
furthercementedthisagreementduringhisvisittoBrazil.
Cultural relations
NigeriaandBrazilcontinuetomaintainculturallinks.Recentlytherehavebeenjoint
effortsbetweenNigeria’sCentre forBlackandAfricanArtsandCivilizationand the
Braziliangovernment(throughBrazil’sSpecialSecretariat)topromotepoliciesonracial
equality.Brazil’sgovernmentandthePanAfricanStrategicandPolicyResearchGroup
hostedtwointernationalconferences.ThesewereheldinRiodeJaneiroin2008and
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in Brasilia in 2009. This bond has also delivered a memorandum of understanding
(MOU)thatarticulatesbroadareasofcross-nationalco-operationandarelationshipthat
emphasisesthehistory,artandcultureofNigeriaandBrazil.Signedon15March2010in
Abuja,representativesofthetwocountriesareintheprocessofmappingoutstrategiesto
ensurethesuccessfulimplementationoftheMOU.
Military relations
InSeptember2003,Nigeriaapprovedthepurchaseof15F-7NIandFT-7NIChinese
multirolecombatortraineraircraft.Ithasalsochosentoupgradeitsmilitarylinkswith
Brazil andhasappointed its firstdefenceattaché to thecountry.TheNigerianVice-
President,NamadiSambo,commissionedtheDefenceSectionoftheNigerianEmbassyin
BrazilduringhisvisittoBrazilinDecember2010.ThisindicatesNigeria’swishtoextend
furthermilitarylinkswithBrazil,especiallyinlightofbothcountries’commitmenttothe
SouthAtlanticPeaceandCooperationZone.19
Overall,Nigeria’srelationswithBrazilhavebeenbeneficialforbothcountries.Nigeria
hasbenefitedfromBrazil’sexperienceinthefieldofinfrastructuraldevelopmentand
BrazilhasbenefitedfromNigeria’snaturalresourceendowments.WhileNigeriacontinues
itsfriendshipwithBrazil,anothercountrythatshareshistoricalrelationswithNigeriais
Russia.
N I g e R I A A N d R u S S I A
RussiahasalwaysheldaspecialplaceintheheartsofmostNigeriansasthecountry
thatsupportedNigeriaduringitsbittercivilwarbetween1967and1970.20Although
noelaboraterelationshipwasdevelopedafterthecivilwar,theSovietUnion(andlater
Russia) continued to feature prominently in Nigeria’s diplomacy. This relationship
progressedfurtherfollowingthereturnofcivilianruletoNigeriainMay1999.
Diplomatic relations
InMarch2001,PresidentObasanjovisitedRussiaandbothcountriessignedaDeclaration
onthePrinciplesofFriendlyRelationsandPartnership,andaProgrammeonCultural
andScientificCooperation.RussianPresidentDmitryMedvedev’svisittoNigeriain2010,
thefirstsuchvisitfromaKremlinleadertoAfrica’smostpopulousnation,boostedtheir
relationshipsignificantly.Bothcountriessignedadealtoco-operateindevelopingnuclear
energy,especiallyforthepurposeofelectricity.Anothermajorprojectofinteresttothe
RussianswastheTrans-SaharanGaspipeline,aprojectaimedatsendingNigeriangas
toEurope,andsupportedbytheEUasawaytodiversifyitsenergyresources.Thisis
ofconsiderableinteresttoGazprombecauseofitsbeliefthatitisfarbehinditsforeign
competitorsinAfrica,especiallywhencomparedwithcompaniessuchasRoyalDutch
Shell,ChevronandExxonMobil.By2010bothNigeriaandRussiahadalso started
exploringdiscussionsonspacetechnology,nuclearenergyandpartnerships inother
technicalfields.ThecountrieshavesignedanuclearagreementbetweentheNigerian
N I G E R I A A N d T H E B R I C S
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NuclearRegulatoryAuthorityandtheRussianStateAtomicCorporationtoexploreand
developgasandhydrocarbon-relatedprojectsinNigeria.
Table 4: Diplomatic visits by Nigerian leaders to Russia, May 1999 to May 2011
Date Leader Focus of discussion
March 2001 President Olusegun Obasanjo Bilateral discussions
Source:Author’sown
Table 5: Diplomatic visits by Russian leaders to Nigeria, May 1999 to May 2011
Date Leader Focus of discussion
June 2009 President Medvedev Bilateral discussions
Source:Author’sown
Trade relations
Therelationshipcontinuedtoprogressandin2008thetwocountriessignedaseriesof
MOUs.Oneofthesewastoregulatethepeacefuluseofnuclearenergy.Anotherenvisaged
theparticipationoftheRussian-basedGazprom,theworld’slargestenergycorporation,in
theexplorationanddevelopmentofoilwellsandgasreservesinNigeria.By2009trade
figuresbetweenbothcountriesreachedthe$1.5 billionmarkandbothcountriesbegan
talkingaboutfurtherdevelopingtheirrelationship.Nigeria’sformerForeignMinister,Ojo
Maduekwe,andhisRussiancounterpart,SergeiLavrov,mettodiscussvariousareasof
collaboration.Specifically,Russiawasinterestedinprojectsrelatedtothedevelopment
ofNigeria’sinfrastructure;theferrousandnonferrousmetalsindustry;electricpower
generation, including nuclear energy; and the extraction of hydrocarbon and other
rawminerals.Foritspart,Nigeriawasinterestedinallspectrumsofbilateraleconomic
co-operation,includingtheelectricitysector.
In2010tradebetweenthetwocountriesreached$300 million.Despitetherelative
insignificanceofthisamount,NigeriahasbecomeRussia’ssecond-largesttradepartner
in sub-Saharan Africa, after South Africa. Russia exports metals, fertilisers and oil
consumablestoNigeria,whileNigeriaexportsagriculturalproductstoRussia.21However,
Russiaappearstobegrowingincreasinglydiscontentwithplayingsecondfiddletoother
countrieslikeChinaandIndia.TheRussianAmbassadortoNigeria,AlexandraPolyakov,
hasattributedthelowtradevolumetotheabsenceofalegalframeworktosupportthe
2009InvestmentPromotionAgreementbetweenthetwocountries.
Cultural relations
SocioculturalcontactbetweenNigeriaandRussiadatesbacktotheformerSovietUnion.
ManyNigerianstravelledtotheformerSovietUnion,wheretheyimpartedaspectsof
Africanculture.ManyalsomarriedSoviet citizens; someofwhomcame fromother
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partsoftheSovietUnionbutthemajoritywerefrompresent-dayRussia.Manyofthese
marriagesstillexist,thusreinforcingcontactbetweenNigeriaandRussia.Presentlyboth
Russia’sembassyinNigeriaandNigeria’sembassyinMoscowhaveculturalattachéswhose
mainresponsibilityistofosterculturallinks.Althoughnowsignificantlylimited,Russia
stilloffersscholarshipstoyoungNigerianstudentstostudyinthecountry.
Military relations
Nigeria’smilitaryforcesusewarships,helicoptergunships,trooptransportsandunmanned
drone intelligenceplanes sold toNigeriabyRussiancompanies.Russian instructors
providespecialisedtrainingtoNigeriannavyandairforcesailorsandpilotsinhowto
operatetheshipsandhelicopters.
RussiawasalsoinvolvedintheSeptember2003launchofamilitarysatellitetargeted
at boosting surveillance of Nigeria’s military and crude oil facilities. The satellite,
NigeriaSat-1,wasbuiltbyNigeria’sNationalSpaceAgencyandRussia’sRowbrowExport
inPlesetskatthecostof$13million.Itisalow-earthorbitmicrosatellitedesignedto
monitordisasters.22NigeriaSat-1hasthreespectralbands,namelygreen:0.52–0.62 µm,
red:0.63–0.69 µm,andnear-infrared:0.76–0.9 µm.
N I g e R I A A N d I N d I A
Like Brazil, Nigeria and India have a long history of political friendship, economic
relations and social interaction. The relationship predates Nigeria’s existence as an
independentnation.Indeed,therearerecordedcasesofIndianstradinginNigeriaas
earlyasthe1890s.23Thedepthoftherelationshipowesmuchtothesimilarityincolonial
experienceandsomeofthepoliciesBritainadoptedwhileoverseeingthetwocountries.
Bythe1930sIndianshadpenetratedtheNigerianmarket,especiallythetextileindustry,
andthefollowingdecadeswitnessedtheirdiversificationintomanyothersegmentsof
Nigeria’seconomy.Thisrelationshiphasdevelopedsignificantlyinrecentyears–despite
theeconomicvicissitudesemanatingfromtheglobalmeltdown.Economicconnections
rangefromoilexploration,telecommunicationsandtransportation,toretailing,banking
andmilitarytraining.Ofallthese,however,therelationshipbetweenthetwocountries
inoilandgasappearstobethemostimportantinrecenttimes.Thisisduelargelytothe
importanceoftheseresourcesfortheeconomicdevelopmentofbothcountries.
Diplomatic relations
Sincetheearly2000stherehavebeenvisibledemonstrationsoffriendshipbetweenthe
twocountries.TheIndianHighCommissioninNigeriaestimatedthat35 000Indians
werelivinginNigeriaasofOctober2010.24TherearealsomanyNigerianslivinginIndia.
Diplomaticfriendshipisevidentinseveralexchangesofvisitsbetweenleadersofboth
sides.
ThesigningoftheAbujaDeclarationinOctober2007signalledanimportantnew
phase indiplomatic linksbetweenNigeriaandIndia.Before thisbothcountrieshad
lackedaninstitutionalframeworktosupportinvestmentsandcommerce.Followingthe
N I G E R I A A N d T H E B R I C S
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declarationtherehavebeenjointsessionstoreviewthestateofrelationsbetweenthetwo
countries,thefifthofwhichtookplaceinIndiainMarch2011.
Table 6: Diplomatic visits by Nigerian leaders to India, May 1999 to May 2011
Date Leader Focus of discussion
January 2000 President Obasanjo Chief guest at the 50th Republic day celebrations
November 2004 President Obasanjo Working visit
November 2007 Vice-President Goodluck Jonathan
To attend the Federalism Conference
November 2007 High-level diplomatic delegation
To attend the Africa Hydrocarbon Conference
April 2008 Vice-President Goodluck Jonathan
To attend the India Africa Forum Summit
August 2009 Commerce and Industry Minister Chief Udenwa
To participate in the doha Round Informal Conference
January 2010 Labour and Employment Minister Prince A Kayode
Bilateral visit
February 2010 defence Minister Major General (retired) Godwin Abe
Led Nigerian delegation to defExpo
August 2010 Science and Technology Minister Prof MK Abubakar
Led Nigerian delegation to participate in the Bangaluru Space Expo25
March 2011 Foreign Affairs Minister Odein Ajumogobia
To attend the 5th Session of the Joint Commission and sign bilateral agreements
Source:Author’sown
Table 7: Diplomatic visits by Indian leaders to Nigeria, May 1999 to May 2011
Date Leader Focus of discussion
March 2000 External Affairs Minister Satya Mey Vijayte
Co-chairing the Third Session of India–Nigeria Joint Commission
december 2003
Prime Minister Shri Atal Behari Vajpayee
Participation in the Commonwealth Heads of Government Meeting
September 2006
Speaker Lok Sabha Shri Somnath Chatterjee (accompanied by a large delegation)
To attend the 52nd Commonwealth Parliamentary Conference
October 2007
Prime Minister dr Manmohan Singh
Bilateral discussions; signing of the Abuja declaration on Strategic Partnership
July 2008 Special Envoy to the Prime Minister Shri Anand Sharma
Bilateral trade discussions
January 2010
Honourable Minister for Commerce and Industry Shri Anand Sharma
To attend the ‘Namaskar Africa’ event
January 2010
Minister for Petroleum and Natural Gas Shri Murli deora
Bilateral visit
Source:Author’sown
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Trade relations
IndiahashadahistoryofextensivecommerciallinkswithNigeria.Accordingtothe
NigerianForeignAffairsMinistry,Indo–Nigeriatradereachedapeakof$10.2billion
during2008–09,althoughtheglobalrecessionreducedthisto$8.7billionin2009–10.
Bilateraltradegrewbyover50%duringthefirsthalfof2010–11,comparedwiththe
correspondingperiodforthepreviousyear.Tradeisestimatedtoreach$12billionfor
2011–12,andIndianinvestmentsinNigeriaareestimatedat$5 billion.India’sexports
toNigeriaaredominatedbymanufactureditemssuchasmachineryandinstruments,
pharmaceuticals,electronicsandtransportequipment. Mainitemsinthenon-oilimport
basketofIndiafromNigeriaincludemetalliferousoresandmetalscraps,non-ferrous
metals,woodandwoodproducts,andcashewnuts.Traditionally,thebalanceoftrade
hasbeeninNigeria’sfavour,owingtolargeIndianimportsofcrudeoil.Itisbelievedthat
NigeriaiscurrentlyIndia’slargesttradepartnerinAfrica.Ontheindustrialfront,Indian
companiesinNigeriaarethesecondlargestintermsofemploymentofNigeriansafterthe
Nigeriangovernment.
In2007theIndianPrimeMinisterDrManmohanSinghvisitedNigeriaaspartofa
high-levelmeetingtodiscussstrengtheningrelationsbetweenthetwocountries.Since
thenIndiahascontinuedtobealeadingtradepartnerforNigeria.Nigeria’sdesireto
expand thisportfoliowasdiscussedduring thevisit to India inMarch2011by the
NigerianForeignMinister,OdeinAjumogobia,whenheattendedthefifthsessionofthe
JointCommissionwithIndia.TheJointCommissionconstitutesalegalframeworkof
thecollaborationbetweenNigeriaandIndia.Underitthereisawholerangeofactivities,
suchasthebilateralairserviceagreement.26ThefollowingareasareexamplesofIndia’s
businesslinkswithNigeria.
IndiaisoneofNigeria’sbiggestsuppliersofpharmaceuticals.Indianpharmaceutical
companiesbasedinNigeriahaveimportedmedicaldrugsatrelativelycheapprices.There
hasalsobeenasignificantincreaseinNigerianstravellingtoIndiaformedicaltreatment.
ThecostofmedicaltreatmentinIndiaisfarlowerwhencomparedwithEurope;andthe
standardfarmoreadvancedwhencomparedwithNigeria.Accordingly,manyNigerians
considerIndiaasthebestlocationtoundergomedicaltreatment.
Pharmexcil,theIndianPharmaceuticalExportsPromotionCouncil,openeditsfirst
officeoutsideIndiainNigeriainMarch2011.Therewasatwo-dayexhibitionfeaturing
over40IndianpharmaceuticalcompaniesinNigeriaandthetwogovernmentssigned
anMOUonpharmaceuticalco-operationinMarch2011inNewDelhi.TheIndianHigh
Commissioner inNigeriausedtheopportunity toassureNigerians that Indiawould
co-operatewiththeNationalAgencyforFoodandDrugAdministrationandControl
(NAFDAC)tocombatfakedrugs.27Asofthetimeofthevisit,ithadbeenestablishedby
theNigeriagovernmentthatmostofthefakemedicinesenteringthecountryoriginated
fromIndia.TheMOUstipulatesthatIndianscaughtimportingfakedrugsintoNigeriawill
bejailedforlifeandwillhavetheirpropertyconfiscated.ItalsoconfirmsIndia’sagreement
topayfortheprosecutionofanyonesuspectedofcounterfeitingdrugs.Compensationof
NGN28 300,000(about$2,000)willbepaidtoanyinformantwhoprovidesNAFDACwith
informationtouncoverthesourceandproducerofcounterfeitedproducts.Furthermore,
IndiawillcollaboratewithNAFDACincapacitybuilding,trainingprogrammesandassist
inprovidingfundingtotrainmedicalengineers.29
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IndiafirstbecameinvolvedinNigeria’sbankingsectorin1962,whentheBankof
IndiaopenedabranchinNigeria.ThebankchangeditsnametoAlliedBankbutlater
wentoutofbusiness.Followingthis,Indiashowedlittleinterestinthebankingsector
untilthelastdecade.Anoticeableexception,however,wastheMahtanifamilyfromIndia.
TheyheldconsiderablestakesinCharteredBank,establishedin1988,andlaterRegent
Bank,establishedin2005.InNovember2005bothbanksmergedwithotherstoform
theInvestmentBankingandTrustCompany(IBTC),inwhichtheMahtanifamilyhave
retainedasignificantstake.
AnotherlandmarkIndianinvolvementinbankingcameinJune2011,whenIndia’s
largestcellularservicecompany,BhartiAirtel, formedapartnershipwithECOBANK
tolaunchmobilebanking.Thetwoagreedtolaunchawiderangeofmobilefinancial
services,includingPersontoPerson,BusinesstoBusinessandmobile-savingproducts.
ThesewillbemarketedunderbrandnamesEcobankMobileandAirtelMoney.30This
partnershipdemonstratestheincreasingimportanceoftheactivitiesofIndiancompanies
intelecommunications.
TelecommunicationsisamajorenterpriseinNigeriaandthecountryprovidesthe
largestmarketinAfrica.IndianshaveenteredNigeria’sbusinessquiteforcefully,with
BhartiAirtelinvesting$600 millioninNigeria’smobilemarketwhenitpurchasedZain
Telecom’sAfricanbusinessfor$10.7 billion.Thecountry’sinvolvementinZainTelecom
hasmadeitpossibleforIndiatoinfiltrateotheraspectsofbusinessintheinformation
technology(IT)sector.Forexample,theNationalInstituteofInformationTechnology,
anIndiancompany,trainsabout15 000NigeriansannuallyinIT,whichenablesthemto
getjobswithoutmuchdifficulty.InMarch2011ZenMobile,oneofIndia’sfast-growing
handsetmanufacturingcompanies,madeitsdebutinNigeria,promisingtoprovidebest-
qualitymobilephonesataffordableprices.IntotalsixZenmobilephoneswerelaunched,
namelytheX381,X410,X430,M20,Z66andX82.31
IndiansareinvolveddeeplyinNigeria’sretailbusinessandownanumberofbigshops
inNigeria.Theseinclude‘ParkandShop’,oneofNigeria’sbiggestretailshops,aswellas
SumalFoods,DanaJuice(whoseproductsincludejuiceandpharmaceutics),Trawley,
UnitedFoods(makersofIndominenoodles),andOKFoods.
AmajorlinkbetweenNigeriaandIndiaintheeducationsectoristhePan-African
e-NetworkProject.The satellite and fibrenetworkproject is an initiativeof Indian
President,DrAPJAbdulKalam,usingIndianexpertiseinITtobenefitthehealthcareand
highereducationsectorsinAfricancountries.Itwillprovideeffectivecommunicationand
connectivityamongthe53Africannationsthataresignatoriestotheproject.Theproject’s
threecomponentsaretele-education,telemedicineandaVideoConferencinglink.Asone
ofthepilotcountries,NigeriaintroducedtheprojectinFebruary2009.TheUniversity
ofLagoswillbethelocationforthetelemedicineandtele-educationcomponents.The
UniversityofIbadanwillserveastheregionalhighlyspecialisedhospital.
Underthearrangement53universities,53hospitals,fiveregionaluniversitycentres
andfivespecialisthospitals inAfricawillbeconnectedviasatellite, fibreopticsand
wirelesslinksto12highlyspecialisedIndianhospitalsandsevenIndianuniversities.
Eachhostcountrywillhaveoneuniversityandonehospitalconnectedtothenetwork.
Eachconnectedhospitalwillreceiveonehouroflivetele-consultationaswellasoffline
consultationforfivepatientsperdayfromthe12selectedhospitalsinIndia.Ongoing
medicaleducation forsomedoctorsandnurseswillalsobeoffered.Eachconnected
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universitywillbeabletoruntele-educationalcoursesofferedbythesevenselectedIndian
universities.Theproject,estimatedat$100millionforafive-yearperiod,isbeingfunded
entirelythroughIndia’sMinistryofExternalAffairsAid-to-Africabudget.
TwoIndiancompaniesareattheforefrontofIndia’sinvolvementinvehicleimportation
intoNigeria.ThesearetheDanaGroupandtheStallionGroup.TheDanaGrouphasbeen
responsiblefortheimportationofKiavehiclesintoNigeria,whiletheStallionGrouphas
beenresponsiblefortheimportationofvehiclessuchasHyundai,HondaandAudiVW.
TheDanaGroupisalsoinvolvedinairlines,operatingflightsacrosskeycitiesinNigeria,
especiallyprofitablerouteslinkingLagos,thecommercialcapital,withthecapitalAbuja
andtheoilrichcityofPortHarcourt.IndiantricyclesarecommoninLagos.
Indiaisalsotryingtoensurethatitmeetsthesatisfactionofitsclients.TheDana
GrouphasenteredintoanagreementwithaNigeriancompany,AffordableCarsLimited,
toprovidesales,after-saleservicesandtechnicalservicestoKiacustomersinIkeja,Lagos
andtheenvirons.This,accordingtothemanagingdirectorofDana,JackyHathiramani,is
tobringservicesclosertothecustomers.32
Table 8: Overview of India–Nigeria trade ($ million), 2003–2010
2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10
Indian exports to Nigeria
565.49 644.68 874.03 903.48 1,083.34 1,529.26 1,408.25
Indian imports from Nigeria
75.64a 48.40a 72.46a 7,026.93 7,616.09 8,900.35 7,287.91
a Excludesoilimportfigures.
Source:FiguresprovidedbytheIndianHighCommission,Abuja,Nigeria
OtherinitiativesincludethesigningofatechnicalserviceagreementbetweenNigerian
ChemicalIndustriesLimited,Notore,andanIndiancompany,TataChemicalsLimited,
inApril2011.TataChemicalsLimitedisanintegratedchemicalcompanyandpartofthe
TataGroupofCompanies.33TheaimoftheagreementwastoassisttheNigeriancompany
infurtheroptimisingandachievingbreakthroughperformanceinitsfertiliserplantin
Onne,RiversState.
IndiaisalsointerestedinestablishingacoalandgaspowerprojectinNigeria.India’s
largestpowerproducer,theNationalThermalPowerCorporation(NTPC),cameupwith
thisinitiativebutlaterabandoneditfollowingdelaysinfinalisingapartnershipforthe
venture.InFebruary2011theNTPCrestateditscommitment.Thearrangementinvolved
Nigeriaensuringtheyearlysupplyof3milliontonnesofgasforNTPCprojectsinIndia.
Inreturnforthegas,theNTPCwastobuilda700-megawattgas-firedpowerplantanda
500-megawattcoal-basedplant;andrenovatea200-megawattunitata1 300-megawatt
plant.TheNTPCalsoofferedtotrain30Nigerianengineersandsetupatraininginstitute
inthecountry.TheproposalwasinitiallycalledoffbecausetheNigerianpartnerswanted
anequitystakeinthepowerprojectstobesetupbytheNTPCinlieuofusingtheir
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influencetoensurethesigningofthegasagreement.34Thishasnowbeenresolved.
Overall,India’sinvolvementinNigeriafallsunderitswideroutreachprogrammein
Africa.Sincetheearly2000sIndiahasbeenextensivelyinvolvedinwiderinvestmentin
Africa.ThecountrylaunchedaninitiativeknownasTeam-9Techno-EconomicApproach
forIndiaMovement,seekingco-operationwithWestAfricancountrieslikeChad,Cote
d’Ivoire,EquatorialGuinea,Ghana,Mali, Senegal,GuineaBissauandBurkinaFaso.
Indiapledged$500millionasconcessionarygiftstothesecountries.Otherrecentcases
ofIndiangenerositytoAfrica includeprovidingacredit line for$200milliontothe
NewPartnershipforAfrica’sDevelopmentandcancellingdebtsowedbyAfrica’shighly
indebtedpoorcountries;launchingtheFocusAfricaProgrammebyIndia’sEximBank
topromoteAfrica–Indiatrade;andattainingfullmembershipoftheAfricanCapacity
BuildingFoundationandpledging$1 milliontocapacitybuildingandpovertyalleviation.
However,centraltoIndia’sinvolvementinNigeria,andperhapsthemostcontroversial,
appearstobeNigeria’soilreserves.
Aswithmostemergingpowers,Indiarequiresaconsiderableenergysupply.Indeed,
itisenvisagedthatIndia’senergydemandisexpectedtoincreasebyover40%duringthe
nextdecade,whilesupplyfromitsageingoilfieldsisexpectedtoincreasebyonly12%.
Thishasnecessitatedhigherimportsofoilandgasassets,andIndiaviewsAfricaasthe
continenttomeetthisdemandespeciallyagainstthebackgroundofinstabilityinthe
MiddleEast.AlthoughIndiamaybelookingtowardsAfricaasawhole,Nigeriaisitsmain
target–especiallysincetheWestAfricannationplanstoincreaseitsdailyoilproduction
from2.7millionbarrelsto4millionbarrelsby2012.RecentlyNigeriahasbeenoneof
India’smainsourcesofcrudeoil,fulfillingaround8–12%ofitsrequirements.35Currently
Indiaimportsapproximately13 million metrictonnesofcrudeoilfromNigeriaannually.
The special adviser to theNigerianpresidentonpetroleummatters,DrEmanuelO
Egbogah,hasrespondedpositivelytoIndia’srequesttoincreasetheseimports.
Besidestradeinhydrocarbons,IndiahasalsomadeadecisiveentryintotheNigerian
upstream and refining sectors. Indeed between 2005 and 2007 Indian companies
participatedinNigerianbidroundsandwonsixoilblocks.ONGCMittalEnergyLimited
(OMEL)wonthreeblocks(OPL279,OPL285andOPL297);Sterlingtwo(OPL2005and
OPL2006);andEssarone(OPL226). Thereisabitofahistorytothis,whichtoanextent
showsthenatureofconductingoilbusinessinNigeria.InAugust2005ONGCVidesh
Limited(OVL)wonBlocks321and323,whicheachholdreservesoftwobillionbarrels,
committing$485 millioninsigningamount.However,theNigeriangovernmentawarded
thesetotheKoreaNationalOilCorporation(KNOC)onthegroundsthatithadafirst
rightofrefusalovertheblocks.36KNOCsignedproduction-sharingcontractsforthe
blocksinJanuary2006,butpaidonly$92 millioninsigningamount.Thisforcedformer
NigerianPresidentObasanjotocanceltheallocationanditwasreturnedtotheOVL.
TheOVLalreadyhasthreeblocksinNigeria–OPL279andOPL285(wonin2005)and
OPL246(woninNovember2006).37TheIndiangovernmentgrantedtheONGCVidesh
Limited(OVL)approvaltoinvest$359millionduringthefirstexplorationphaseinthe
twodeepwaterblocks.TheOVLbudgeted$1,195millionforOPL279and$164million
forOPL285,includingthesignaturebonusandacquisitioncost.Asdiscussedlater,this
allocationwastiedtoeconomicdevelopment.
TheOVLisalsoinvolvedintheNigeria–SaoTomejointdevelopmentzoneandbacked
a15%stakeinanoilblockinthezone.ThismarkstheOVL’sentryintoNigeria,the
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world’seighth-largestoil-producingcountrywhereIndiaisseekingmoreequitystakes.
TheOVLhadbidforBlock2intheNigeria–SaoTomejointdevelopmentareaaspartof
aconsortiumledbyDevon,PioneerandERHCEnergy.Otherpartnersintheblockare
EquatorExplorationandA&Harmattan,eachwitha10%stake;andFobyEngineering
andMomoOil&Gas,whichholdtheremaining75%equally.
IndiaandNigeriaarecurrentlyreviewingprogressintheexplorationblockswhere
OVLhasparticipatinginterests.Indiahasalsoproposedsecuringliquefiednaturalgas
(LNG)fromNigeria. IndiancompaniesGasAuthorityof IndiaLimitedandPetronet
LiquefiedNaturalGasLimitedhaveexpressedinterestinacquiringastakeinthe$8 billion
LNGprojectatBrassintheNigerDelta,andwilllookatotherinvestmentopportunitiesin
thearea.Indiahasalsoexpressedadesiretoparticipateinthenextroundofbiddingfor
explorationblocksinNigeria,expectedtobelaunchedinmid-2012,andalsoinexisting
oilassets.
India’spositiveperformanceintheoilbusinesspromptedNigeria’sMinisterforForeign
Affairs,whowas formerly theMinister forPetroleumAffairs,OdeinAjumogobia, to
commendanIndiancompany,SterlingGlobal,thatwasoperatingintheshallowwaters
oftheNigerDelta.DespitethegeneralinstabilityintheNigerDeltathatpreventedother
companies likeTotalandShell fromoperating,SterlingGlobalwasable tocontinue
operatingbecauseithaddevelopedcordialrelationswiththelocalcommunity.
OilhasalsoplayedapartinIndia’sinfrastructuraldevelopmentactivitiesinNigeria.
In2006whenIndiawontwoofthe18oilblocks(Blocks279and285),OMELpromised
toinvest$6 billioninbuildinganewrefinerythatwouldproduce180 000barrelsper
day;buildinga2 000-megawattpowerplant;orinbuildinganEast–Westrailwayorany
otherdownstreamprojectasmaybedeterminedbythecountry’ssteeringcommittee.
OMELwasalsogiventherightoffirstrefusalonBlock250inexchangefortheexecution
ofafeasibilitystudyonanewrailway.However,theimplementationofthisdealhas
beenproblematic, as the Indianshavenothonoured their commitment.Nigeriahas
askedOMELtofulfil its$6 billioncommitmentof investingininfrastructure.Anad
hoccommitteefromtheHouseofRepresentativeshasbeenformedtoinvestigatealleged
irregularities in the allotment of oil blocks between 2006 and 2008, after original
applicationsforOPL216andOPL246couldnotbetracedinthefiles.
India’slackofco-operationwasunsurprising.Itpromisedtoerectrefineriesanda
railwaysysteminreturnforjuicyoilblocks,butdidnothingattheendoftheday.By
November2010thesituationhadstabilisedsomewhatandbothsideshadstartedlooking
tothefuture.ConcernremainedovertheEast–Westrailway.However,thespecialadviser
totheNigerianpresidentonPetroleumAfrica,EmmanuelEgbogah,statedthatalthough
theNigeriangovernmentwouldnotexemptIndiafromtheagreement,therewouldbeno
deadlineimposedonthecountrytomakethisdelivery.
IndiaandNigeriahavecomea longwayintheirrelationship,whichiscertainto
continuetoprogress.IndiawillcontinuetobeactiveinmostaspectsofNigeria’ssocial
andeconomiclife.However,theoilandgassectorislikelytoremainthecentreofinterest
andattention.ThisisbecauseIndia’sinterestcontinuestoincreaseinlinewithNigeria’s
reservesanditsdesiretoseekexternalpartners.AlthoughNigeriaintendsonexploring
furtheritsrelationshipwithIndiaintheoilandgassector,itisdeterminedtodosoona
platformthatisfairandwillnotexploitit.Nigeriadesiresapartnershipthatisopenand
mutuallybeneficial.AsacountryNigeriahassufferedsignificantlyatthehandsofoil
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multinationalcorporations,evenfromEuropeandtheUS.Consequently,thereisanatural
tendencyforNigerianstobesuspiciousofallformsofexternalinvolvementinthepolitics
oftheircountry’soil.Indiawillhavetoshowthatitisnotjustanothercountryinterested
inexploitingNigeria’soilwithoutprovidinganyformofassistanceinreturn.
Otheroil-producingcountrieslikeNorwayareknowntohavederivedconsiderable
benefits fromtheiroildeposits.NorwaycanprovidevaluableadviceonhowNigeria
candevelopcrediblepoliciestoensureitmakesthebestofitsendowmentsandofits
relationshipwithIndia.Foritspart,Indiacanobtainmoreknowledgeonhowtotransfer
developmentassistancetoanotherdevelopingcountryinexchangeforoilconcessions.
N I g e R I A A N d C h I N A
CurrentlybothChinaandNigeriaareundergoingsignificantchangesthateachhopes
willenableittobenefitfromitsenormouspotential.Withitsmassivepopulationand
superpowerstatus,Chinahasembarkedonanaggressivepursuitoftradeandinvestment
acrosstheworld.Nigeria,foritspart,hastriedtobringaboutmajordomesticreforms
initspoliticalandeconomicsectorsandthusremoveitsnegativeimageasanunstable
andunreliablebusinesspartner.38Thismutualdesireto‘reachout’formsthebackground
for recent developments and future prospects of Sino–Nigerian economic relations.
Interestingly,eachcountryhaswhatcanattracttheother.Chinaisamajoreconomicand
politicalforcethatcanpositivelycomplementNigeria’sdesiretodiversifyitseconomic
relianceontheWest.ChinaisalsoseenasacredibleinvestorinNigeria’smajormineral
endowmentsandacountrywhosesupportcanassistinNigeria’sinternationaldiplomacy.39
ChinafindsNigeriaattractivebecauseofitsextensivemarket.Itrecognisestheenormous
opportunitiesforanycountrywithinroadsintotheNigerianmarket.
Sino–Nigeriantradelinkscutacrossabroadspectrum,rangingfromoilandgasto
miningandretailing.Oneareathatisyettobefullyexploredisthecurrentandpotential
relationshipbetweenthetwocountriesinthebankingsector.Thebankingsectorsinboth
countriesareundergoingsignificantchangesthathaverequiredthemtogoon‘charm
offensives’foroutsideinvestmentsandengagements.ThissectionexaminesChina’srole
inNigeria’sbankingsectorwithinthecontextofwiderChinesebusinessinterestsinthe
country.ItidentifieskeyareasinNigeria’sbankingsectorthatareinlinewithChina’s
overalleconomicpolicy,andconsiderswhatdifferentchangesinthesectormeanfor
possibleChineseinterestandinvolvement.
Diplomatic relations
2011marksahistoricperiodof the40thanniversaryofdiplomaticrelationsbetween
NigeriaandChina.InJune2002NigeriaandChinasignedfouragreementsonconsulate
matters,co-operationinthefightagainstillicittrafficking,theabuseofnarcoticdrugs
andpsychotropicsubstances,andthediversionofprecursorchemicals.Otheragreements
includedanexchangeofnotesontheprovisionofgoodsbetweenthetwocountriesand
anagreementontourismco-operation.
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Table 9: Diplomatic visits by Nigerian leaders to China, May 1999 to May 2011
Date Leader Focus of discussion
April 1999 President-elect Obasanjo Bilateral discussions
August 2001 President Obasanjo Bilateral discussions
April 2005 President Obasanjo Bilateral discussions, with the president visiting as African Union chairperson
February 2008 President Yar’Adua Bilateral discussions
September 2010 President Obasanjo Private visit
Source:Author’sown
Trade relations
Nigeria andChina signed their first economic, scientific and technical co-operation
agreement,aswellasatradeagreement,in1972.ThistookplaceduringavisittoNigeria
bytheformerChineseMinisterofForeignTradeandEconomicCooperation,FangYi.
Sincethentradelinkshavegrownsignificantly,coveringmostaspectsofeconomiclife.
TheNigeria–ChinaChamberofCommercewasestablishedtoensurefurtherdevelopment
oftraderelationsbetweenthetwocountries.TradebetweenNigeriaandChinareacheda
newhighof$7.76billionin2010,makingNigeriathefourth-largesttradepartner(after
Angola,SouthAfricaandSudan)andsecond-largestexportmarketofChinainAfrica
(afterSouthAfrica).40
ThedevelopmentoftheNigerianRailwayProjectwasakeyaspectofthecountries’
relationship.TheprojectfirstbeganduringtheMurtalaMohammedandObasanjoregime
of1975–1979,butendedbecauseofallegedgreedandcorruptiononthepartofsome
Nigerian leaders. Itwas laterreactivated,witha teamofChineseengineers fromthe
ChinaCivilEngineeringConstructionCorporation(CCECC)visitingNigeriatoassess
theproject.AcontractwassignedinDecember1995withapricetagof$528.60million.
Itinvolvedthesupplyofcoaches,locomotives,wagonsandguardvans,andrestructuring
ofraillines.
Duringthe1990sothereconomicrelationsincludedChina’sinvolvementinirrigated
riceplantationsinItoikin,Lagos;waterresourcesinBornoState;andinNigeria’sNational
ElectricityPowerAuthority,nowthePowerHoldingCompanyofNigeria(PHCN).China
wasalsoinvolvedinNigeria’scontroversialsteelprojectsinAjaokutaandAladja.The
twocountriessignedanenablingagreementinMay1997,althoughthislaterplunged
intoaseriouscorruptionscandalinvolvingthelatePresidentSaniAbachaandotherkey
Nigerianleaders.NigeriaandChinaalsosignedseveraleconomicagreementsduringthe
Obasanjocivilianadministration.
ChinesefirmshavebeentroopingintoNigeriatoconductbusiness.InApril2005
ZTECorporation,aChinese telecommunications firm,enteredadealwithNigerian
Telecommunications Limited to expand Nigeria’s Code Division Multiple Access
networkfollowingasuccessful10 000-linetrialinMaiduguri,BornoState.Theproject
ismeanttoprovidelocaltelecomcomponentsandotherancillaryservices.TheCCECC
built theNigerianCommunicationsCommissionbuilding inAbuja.Huawei,agiant
N I G E R I A A N d T H E B R I C S
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Chinesetelecommunicationscompany,hasalsostarteddoingbusiness inNigeria. In
addition,ChinaisthesourceofthehordesofOkada(motorcycles)onNigerianroads.
ShaoHuixiang,deputydirector-generalofShanghaimunicipality,wheremanyofthe
motorcyclesoriginate,confirmedtheincreaseintransactionsbetweenChinaandNigeria.
HenotedthatthebackuptradedestinationbetweenShanghaiandNigeriaaloneamounted
toapproximately$172million.
InApril2008theBornoStategovernmentawardedsixmajorcontractstoChinese
constructionandengineeringfirmsforconstructiononayear-roundwaterchannelcalled
WaterFall.Thiswastoaddressissuesoffloodinganddrainageconstruction,andalsoto
curtailmosquitoinfestation.Chineseconglomerate,ZhuhaiMinghongGroupCorporation
Limited,agreedtorevivethe350-acremoribundAwoomamaResortinOruEastLocal
CouncilofImoStateinJanuary2009.Chineseofficialsnotedthattheresortborderedthe
twocommercialcitiesofAbainAbiaStateandOnitshainAnambraState,aswellasthe
yet-to–be-realisedOgutainlandport.Itsrevivalwouldhelptopromoteeffectivepatronage
andprovidejobopportunitiesforNigeria’steemingnumbersofunemployedyouth.
InJuly2005astate-ownedcompany,GeneticInternationalCorporationofChina
(GICC),bought its firstconsignmentof100 000 tonnesof freshcassavachips from
Nigeria.Thisdealcontinuedoveraperiodofsixmonthsonamonthlybasis.GICChas
alsobeguntoimportcocoabeansandrubberdirectlyfromNigeria.Chinaalsoimports
sesameseedsfromNigeria.Therearecurrentlyover500Chineseexpertsandtechnicians
workinginvariousfieldsofagriculturein20Nigerianstates.
TwentyChinesecompaniesparticipatedinthe2007LagosInternationalTradeFair.
ParticipationofChinesecompaniesinthisimportantinternationaltradefairisanannual
ritual.Thevolumeof tradebetweenNigeriaandChina increased from$178million
in1996to$1.44billionin2001.Thisrosefurtherto$1.168billionin2002,$1.858
billionin2003,$2billionin2004andto$2.83billionin2007.ChinaisoneofNigeria’s
top-tentradepartnersandhasestablished30companiesinNigeria.Someoftheseare
solelyownedandothersarejointlyownedwithNigerians.Thesecompaniesareinvolved
intheconstruction,oilandgas,technology,andserviceandeducationsectorsofthe
Nigerianeconomy.Chinahassignedoilexplorationcontractsworthover$4billion.Its
involvementintheoilsectoristiedtoChinabuildingapower-generatingstationthat
wouldaddsubstantialmegawattstoNigeria’spowersector.
ChinahasalsoformedcollaborationswithNigeriathatcutacrossregionallines.In
July2011aNigerianenergyfirm,GlobalBiofuels,joinedanumberofChinesefirmsto
floatethanolrefineryplantsacrosstheWestAfricansubregionandtoexploreinherent
agriculturalpotential for fuel.Theproject,which is the first inAfrica,will cover a
landmassof97 500hectaresofland,ofwhich65 000hectaresisdedicatedtoNigeria.
Itsfirstphasecovers6 500hectaresandisduetocommenceintheEkitiStateinsouth-
westernNigeriabeforetheendof2011.Atfullimplementation,theproject’sestimated
outputwillbe1 950 000 tonnesofgrainperyearand60 000 tonnesofethanolproduced
fromthesugarystalkofsweetsorghum.Otherattendantbenefitsoftheprojectincludethe
productionof216gigawattsofelectricpowerandtheprovisionof8 000directjobsand
50 000indirectjobs.Itisexpectedtoreducegreenhousegassessignificantly.
Theproject’suniquenessliesinthediversityofactorsinvolved.Financingtheproject’s
totalcostof$183,367,333hasbrought togetheravarietyof stakeholders.Themain
contributingpartnersat70%areWEMETInternationalCompletePlantEngineering
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CompanyLimitedoftheGaungxiProvinceinChinaandCOZAInternationalLimited
ofHongKong.Otherstakeholders,witharangeofinterestsintheproject,includethe
governmentofEkitiStateofNigeria,AfricanFinanceCorporation,FirstBankofNigeria
Place, Nigeria Export–Import Bank, Access Bank Place and the African Biofuel and
RenewableEnergyFuel.41
NigeriaalsohasongoingarrangementswithChinaonitsrailways.TheManaging
Director forChinaGezhoubaGroupCorporation (CGCC)ProjectsNigeriaLimited,
ZhangJun,signedadocumentwiththeChairmanoftheNigerianRailwayCorporation
Board,BelloHaliruMohammed,onhowbothcountriescouldcollaborate furtheron
issuesrelatingtorestructuringNigeria’srailwaysystem.InJuly2011Nigeriasignedan
$874-millioncontractwiththeCCECCfortheconstructionoftheAbuja–Kadunarailway.
Toexecutethisproject,theNigeriangovernmentnegotiatedaconcessionaryloanof$500
millionwiththeChinesegovernmentataninterestrateofabout3%,whichistoberepaid
in15years.42
OfallChina’s interests inNigeria, itspredominant focus isoil.Thisresourcehas
beenattheforefrontofcontroversyinNigeria,largelybecausetheresourcehasbeen
mismanaged and the communitiesproducing it havepersistently complained about
neglect.ChinaandNigeriahavesignedseveraloildealsoverthelastfewyears.Themost
significantoftheseistheagreementthatinvolvedChinainvesting$4billioninNigeria’s
infrastructure in return for the first refusal rightson fouroilblocks in2008.43This
investmentinevitablyputChinaonacollisioncoursewithNigerianmilitantsfightingthe
Nigerianstateoverthemanagementofoilinthecountry’sNigerDelta.Onanumberof
occasionsChineseoilworkersweretakenhostagebymilitantsandultimatelyfreedafter
thepaymentofransoms.InSeptember2009theMovementfortheEmancipationofthe
NigerDelta(MEND)warnedChinesefirmsnottoinvestintheregionuntilpermanent
peacehadbeenachieved.ThiswasatthetimethatChina’snationaloffshoreoilcompany,
theChinaNationalOverseasOilCorporation(CNOOC),wasbiddingforthesix-billion
barrelsdeal,worth$30billion.MENDisquotedassayingthat‘theChineseshouldbe
carefulaboutinvestmentuntilthereisjusticeintheregion.Wecanguaranteethatifthe
governmentofNigeriafailstoaddresstherootissues,theChinesewillregrettheywere
negotiatingwiththewrongpeople’.44
Theperiod2004to2009witnessedsomemajorChinese investments. InJanuary
2006CNOOCacquireda$2.3billionmajoritystakeinAkpo,amajoroilfield.CNOOC
alsoacquireda45%stakeinOPL246,worth$2.7billioninoffshoredeepwateroilfields
operatedbyTotal, theFrenchoilgiant.This is reportedasCNOOC’s largest foreign
investment todate.CNOOCpaid$424million for financing, operating and capital
expenses.ItwasarrangedthattheprofitswouldbesharedwiththeNigerianNational
PetroleumCorporationonaratioof70:30infavourofCNOOC.CNOOCalsoagreedto
spend$2billiontobuildrefineriesanddownstreaminfrastructureinNigeria.
On 7 April 2011 the Nigerian Government signed a contract to rehabilitate the
2 110-kilometreEasternraillinewiththeCGGCandtwoothercompanies(ATurkish
firm,EsserContractingandIndustryLimited,andaNigerianfirm,LingoNigeriaLimited).
ThethreeEasternraillinesarethe463-kilometrelinefromPortHarcourttoMakurdi;the
1 016-kilometrelinefromMarkurditoKuru,withtheinclusionofthespurlinestoJos
andKafanchan;andthe640-kilometrelinefromKurutoMarkurdi.45
TradebetweenChinaandNigeriahasstrengthenedandaccelerated.From2009–10
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thetradevolumeincreasedby21.9%to$7.76billion,thehighestinhistory.Exports
fromNigeriatoChinasharplyincreasedby19.5%to$1.07billion.Interestingly,labour-
intensiveproductsnolongerformthebulkofexportsfromChinatoNigeria.Examples
ofthesearechemicalproductsandlocallyproducedproducts,whichhavelittleinfluence
onlocal industriesandemploymentofNigerians.Incontrast,exportsofqualityand
technologicalgoodshaveincreased.AsatMarch2010mechanicalandelectronicproducts
accountedforatleast60%ofChina’stotalexportstoNigeria.46
BothChinaandNigeriaareworkingtoimproveandmaintaingoodstandardsinthe
servicesrendered.TheChineseembassyinNigeriahasbeenconsistentinitseffortsto
workcloselywithorganisationsliketheStandardsOrganisationofNigeria(SON)and
NAFDAC. SON and the General Administration of Quality Supervision, Inspection
and Quarantine of China are currently negotiating the Industry Product Inspection
CooperationAgreement.
InFebruary2011historywasmadewhentheNigeriangovernmenthandedoverthe
OlorunsogopowerstationintheOgunStatetoaconsortiumledbySepcoIIIElectric
PowerConstructionCorporationofChinaanda localcompany,PacificEnergy.This
was the firsthandingoverunder theadministration’sPowerRoadmap.Thehanding
overofthestationstemmedfromNigeria’sinabilitytorepaytheloanprovidedbythe
Chinesegovernmentfortheconstructionoftheplant.Chinaprovided65%ofthefunding
requiredforthe335-megawatt-capacityOlorunsogoplantandthe335-megawatt-capacity
OmotoshopowerstationinOkitipupa,OndoState.Theloanwasprovidedthroughthe
contractorsfortheprojects.ThesewereSepcoIIIElectricPowerConstructionCorporation
fortheOlorunsogoplantandChinaNationalMachinery&EquipmentImport&Export
CorporationfortheOlorunsogoplant.
WhentheNigeriangovernmentfailedtorepaytheloansforthetwoplants,theChinese
contractorsweresaidtohaveleftNigeriawiththemanualsandotherdocumentsrelating
totherunningoftheplants.ThefewdocumentstheyleftbehindwerewritteninChinese.
Interestingly,thisresponsewasseenasunderstandablebytheNigeriangovernment.The
MinisterofStateforPower,NuhuWya,notedthattheChinesehadactedassuchbecause
‘acontractorwhoisbeingowedwillguardjealouslyhisfallbackposition’.Therearealso
ongoingdiscussionswiththecompanythatbuilttheOmotoshostationtotakeoverthe
management.47
In the past existing banking links between Nigeria and China have been on a
comparativelylowscale.Morerecently,ChinahasincreaseditsinvolvementinNigerian
banking,especiallyfollowingNigeria’sreformsofthesector.Broadly,thebankinglinks
form twocategories.These areChinesebanks sponsoringdevelopment activities in
Nigeriaandlinksbetweenthecountries’commercialbanks.Underthefirstcategory,a
numberofChinesebankshavebeeninvolvedindevelopmentactivitiesinNigeria.In
2006ChinaDevelopmentBankgave$20 millioninfinancialsupporttoNigeria’sReliance
TelecommunicationsLimited.China’sEximBank is involved in thedevelopmentof
Nigeria’soilfacilitiesrailway.
Thesecondcategory,whichisthelinksbetweenthecountries’commercialbanks,
comprises the activities of Chinese individuals and activities between China and
Nigeria’scommercialbanks.TherearesomeChineseindividualswhohavesignificant
financialinvestmentsinNigerianbanks;onesuchindividualheldastakeofupto5%
inoneofNigeria’smajorbanksinNigeria.ThreeNigeriancommercialbanksareknown
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tohaveestablishedlinkswithChina.ThefirstoftheseisNigeria’soldestbank,First
Bank,whichwasgrantedalicencetooperateinChinain2009.Thisdevelopmentgave
FirstBankafootholdinAsia.FirstBankhasalsodevelopedbankingrelationshipswith
Chineseinstitutions.ThisincludesanMOUwithYuemeiGroupCompanyLimited,a
textilemanufacturingfirmwithavalueof$50million;apartnershipwithShenzhen
EnergyInvestmentCompanyLimited(ShenzhenEnergyGroup) inthebuildingofa
3 000-megawattgasturbinepowerplantinNigeria,worth$2.4billion;andanMOU
withanotherChinesefirm,GuangdongXinguangInternationalChina–AfricaInvestment
Limited,fora$500-millioninvestmentinOgunState,Nigeria.TheGuangdongXinguang
Group’scollaborationwithFirstBank is in theareasof investmentbanking,project
financing,businessadvisoryservicesandcorrespondentbankingrelationships.FirstBank
alsohasanMOUwithChinaConstructionBanktocoverglobalbankingcollaboration.
StandardIBTCisanotherbankthathasestablishedbankinglinkswithChina.48The
bankhaslinkswiththeIndustrialandCommercialBankofChina(ICBC),andwasvisited
inMarch2010bytheICBCchairman,JiangJianqing.TheICBChasacquireda20%stake
intheStandardBankGroup,thebankinggrouptowhichStandardIBTCNigeriabelongs.
TheICBC’sinvolvementinStandardIBTChasenabledtheICBCtobecomeinvolvedin
anumberofothereconomicinterestsinNigeria.ThevisitalsogaveNigeria’sfinancial
sectortheopportunitytoshowcasethecountryandtodemonstrateNigeria’smannerof
operatingtotheChinese.
AthirdbankthathasestablishedlinkswithChinesebanksistheNigerianExport–
Import Bank, which is at the core of Nigeria’s trade-oriented activities. It provides
short-termguaranteesforloansgrantedbyNigerianbankstoexportersandofferscredit
insuranceintheeventofnon-paymentbyforeignbuyers.Thebankhasheldhigh-level
talksandmadeagreementswithChinesefinancialinstitutionssuchasChina’sEximBank.
TheselinksfurtheropenChinatootherexistingopportunitiesinNigeria’sbankingsector.
InMarch2011China’sEximBankgranteda$30-milliontradefinancefacilitytoAccess
BankPlace.Thefacilitycoverslettersofcreditandexportcreditguarantees.49
Cultural relations
CulturalcontactsbetweenNigeriaandChinahavebeenontheincrease.ManyNigerians
acknowledgethecountry’slong-termlinkswithChina,andthepresenceofahugeChinese
communityinNigeriahashelpedtodeveloprelationsbetweenthecountries.Thereare
alsomanyNigerianswhohavetravelledtoandlivedinChina.Ontheirreturn,anumber
ofthesehaveheldimportantpoliticalpositionsandhavebeenstrongadvocatesofChinese
valuesinNigeria.50NigeriansarealsotryingtomakeinroadsintoChinesesocietyinsome
unusualways.OnesuchexampleisEmmanuelUweche,whoisbecomingahousehold
nameinChinaasapopstar.AsthefirstAfricantoreachalevelofsuchrecognitionin
China,UwechesingsinMandarinunderthestagenameHaoGe.51
A l l I A N C e S A N d R I v A l R I e S A m o N g t h e b R I C S F o R N I g e R I A ’ S m A R K e t
BecauseofthenatureandextentoftheirrelationshipwithNigeria,itisinevitablethatall
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theBRICsshouldbeinvolvedinsomeformofrivalry.Someoftheserivalrieshavealso
arisenbecauseofNigerianauthorities’fluidandsometimesincoherentpolicyregulations.
Ofthefourcountries,BrazilseemstohavetheleastlinkswithNigeria.Asdiscussed,
thecountryhasneithertheextensiveoillinksofChinanorthewidecontrolofIndia’s
retailbusiness.Russia’spositionissomewhatcomparabletoBrazil,andthetwocountries
haveexperiencedrivalryinareasinwhichtheyshareacommoninterest.Thismaybe
attributedtoalackofclarityfromNigeria;ortothebeliefheldbyalltheBRICsthat
theycanexploittheweakstructuresinNigeriatofurthertheirgoalsinthecountry.One
exampleofthisisworthrecordinghere.WhentheNigeriangovernmentcalledforthe
submissionoftheExpressionofInterests(EOIs)forcompaniestoacquireamajoritystake
inNigeria’selectricityinfrastructureinDecember2010,331localandforeigncompanies
submittedEOIstotheBureauofPublicEnterprises(BPE)bythedeadlineof4March
2011.Brazilianfirm,PROINFRA,offered$100billionforamajoritystakeinall23power
plantsslatedforprivatisation.However,itsofferwasdeliveredoutsidetheBPEprocess
ofEOIs.Onthetransmissionside,PowerGridCorporationofIndiaLimited(PGCIL)
saiditwouldsubmitarevisedofferforthemanagementofNigeria’selectricitygridtobe
constructedatacostof$3.5billion.However,thePROINFRAofferwasnotpartofthe
interestexpressedtotheBPEbytheother331companies.India’sEssarandTataGroup,
aswellasContour-GlobaloftheUSwereamongthe331companiesjostlingforamajority
stakeinthepower-generatingcompanies.TheBPEhadrevealedthat174applicationswere
receivedforthefourthermalstationsandtwohydrostations;while157otherapplications
expressed their interest in acquiring the11distributioncompanies.Essar expressed
interestininvesting$2billionforageneratingcapacityofatleast2 000megawatts,an
equivalentoftwo-thirdsofthecurrentaverageelectricityoutput.Between13and20
December2010,BPEpublishedadvertorialsinlocalandforeignmediainvitingprospective
coreinvestorstoexpressinterestinthe11distributioncompaniesunbundledfromthe
PHCN.Italsoinvitedprospectivecoreinvestorstoexpressinterestinthefourthermal
powerstationsasconcessionariesforthetwohydropowerstations.Theinitialdeadlinefor
thereceiptofEOIswas18February2011,butthiswasextendedto4March2011.
InMarch2011,PGCIL said itwould submit a revisedoffer for themanagement
of Nigeria’s electricity grid. The Indian state-run power giant was among the three
companiesshortlistedbytheBPEduringa2007biddingroundforthemanagementofthe
TransmissionCompanyofNigeria.Underthepowerroad-map,electricitygenerationand
distributionwouldbeprivatised.Nigeria’sfederalgovernmentwouldcontinuetoownthe
nationalgridbutitsmanagementwouldbeprivatised.PowerGridCorporationwonthe
bidin2007,butthedeal,whichwassubjecttotheapprovaloftheNCP,wasdelayeddue
tothenon-implementationoftheNigerianElectricityRegulatoryAct,whichwaspassed
in2005.
InMarch2011theNigeriangovernmentrejectedtheBrazilianofferof$100billionto
managethe23powerplants.ThegovernmentsaidthatnofirmoutsidetheBPEadvertised
processwouldbeconsideredforparticipation.SincetheBrazilianfirmhadcontactedthe
NigerianMinistryofMinesthroughtheNigerianEmbassyinBrazil,itwassaidthatthe
firmhadnotcompliedwiththeregulations.
AlthoughbothIndiaandChinaareinvolvedinextensivetradelinkswithNigeria,
therearefewareaswherebothareinvolvedinsimilarenterprises.Chinahasnotbeen
deeplyinvolvedinfisheries,banking,moviesandentertainment,northecrucialarea
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oftelecommunications.TheseareasareIndia’smajorstrengths.Foritspart,Indiahas
not been deeply involved in enterprises like satellite co-operation and agricultural
co-operation–areaswheretheChinesehaveconsiderableadvantage.Indeed,itwould
seemthattheonlyareaswherebothcountrieshaveshownsimilarlevelsofcommitment
areoilandgasandmanufacturing.
IndiahastwomajoradvantagesoverChina.Thefirstisthatoflanguage.AsanEnglish-
speakingcountry,itismucheasierfortheIndianstopenetrateNigeria’slocalmarket
thantheChinese,whooftenareunfamiliarwithEnglish.India’ssecondadvantagelies
inbusinessdealingsandthelongevityofitsrelationswithNigeria.SinceIndiahasbeen
tradingwithNigeriaforoveracentury,thecountriesseemtohavemasteredthetricksof
survivalinthemurkybusinessofrelatingwithNigerians.China’srelationswithNigeria
arecomparativelyrecentandunderdevelopedcomparedwiththoseofIndia.
China’sadvantageoverIndiaarises fromthemassiveextentof its involvement in
NigeriaandtheamountofmoneyitpumpsintoNigerianbusiness.Itssecondadvantage
isitsentrenchmentinmanyAfricancountries,especiallyinstrategicresourceslikeoil.
Chinahasdevelopedasoundunderstandingoftheintricaciesinthepoliticsofoilandcan
drawfromitsknowledgeofandexperiencesinothercountries.
ItwouldseemthatIndiarealisesitslimitationsintryingtocompetewithChinain
Africa,especiallyas it lacks the financialmuscleanddiplomaticpowers thatBeijing
possesses.Inresponse,IndiahastargetedspecificareasofinterestinNigeriaandremained
focusedwithoutengaginginanyoutrightcompetitionwithChina.Indiahasalsoworked
onensuringsounddiplomacyinitsrelationswithNigeria,inanattempttoavoidthe
kindofcontroversyChinaseemstohavecourtedindealingwithAfricanleaderswith
questionablecredentials.
NigeriahassignedacontractwithbothIndiaandChinatodevelopitsrailways.As
oneofitsmethodsofrepaymentforoilblocks,India’sOMELagreedtobuildanEast–
West railway.Nigeria’s$6-millionagreementwithChina’sCCECC involvedChinese
expertsrehabilitatingtheexistingrailnetwork,supplying50locomotives,150coaches,
400wagonsand20railbuses,andprovidingtechnicaltrainingfortheNigerianRailway
Corporationstaff.
OnecommonlinkthatIndiaandChinahaveisthesuspicionthatbothcountriesare
becominghavensforNigeria’smoney,stolenbythecountry’spoliticalelite.WithWestern
banksbecomingmorecriticaloverforeignlodgementsofmoney,themorepermissive
IndianandChinesebanksnowseemtobethehavenforlootedtreasurymoney.
t h e b R I C S I m P A C t o N t h e N I g e R I A N P e o P l e
ThecloseandextensivelinksbetweenNigeriaandBrazilandthosebetweenNigeriaand
RussiahavehadlittleimpactonNigerianpolitics.Thisislargelybecausemostofthe
relationswereconductedatgovernmentlevels,withfewactivitiespercolatingtothelocal
population.Indeed,unlikethecasesofChinaandIndia,fewNigeriansknowmuchabout
theactivitiesandeventhepresenceofBraziliansandRussiansinNigeria.MostNigerians
only associateBrazilwith football, and this is limited to the activitiesof individual
Brazilianplayers;andassociateevenlesswithRussia.Thereisanegligiblenumberof
BrazilianorRussiancompaniesinNigeriathatmayhaveemployedNigerians,fromwhich
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theirtreatmentofNigerianstaffcouldbemeasured.TherearealsofewBrazilianand
RussiangoodstorivalNigeriancommodities.Consequently,Nigerianshavenogrounds
forcomplaintsabouttheactivitiesofBrazilorRussiainthecountry.
ThesamecannotbesaidoftheIndiansandChinese.FormostNigerianelites,India
isjustanotherimportantcountrywithextensivediplomaticandcommerciallinkswith
Nigeria.ItisalsoapreferredlocationforNigerianelitestoundergomedicaltreatment.
However,thereisabeliefthatmanyofthosewhohavegonefortreatmentinIndiaoften
dieshortlyaftertheirreturntoNigeria.52Closelyrelatedtothisistheimpressionmany
NigerianshavethatmostfakedrugscomingintoNigeriaoriginatefromIndia.Although
thishasbeendisproved,theimpressionseemstohavebeenfixedinthemindsofmany
Nigerians.Indeed,aNigerianundergraduatemadeasweepingstatementthat‘fakedrugs
arefromIndiawhilefakegoodsarefromChina’.53
IndiansinNigeriaareoftenratedaspooremployers.AlthoughNigeriancivilsociety
groupshavenotforcefullycriticisedIndians,subtlecomplaintsaboutthemhavebeen
made. An official of the Federal Ministry of Commerce interviewed for the paper
confirmedthatIndiancompaniesareoneofthehighestemployersofNigerianlabour.
IndianshavemadethelargestimpactintheNigerianretailmarket.Owingtothenature
oftheretailenterprise,ithasalsoformedthebasisaroundwhichmanyNigerianshave
formedtheiropinionsaboutIndians.Therearetwobasicopinionsabouttheseemployers.
Thefirstisthattheyoftenmistreattheirstaff.Someofthestaffcomplainedthattheyare
overworkedandunderpaid.Therearealsocomplaintsofpsychologicalabuse.Itmust,
however,besaidthatthesameallegationislevelledagainstmostAsianemployersinthe
country.Further,theFederalMinistryofCommercepointedoutthattheyrarelyreceive
officialcomplaintsaboutIndiancompaniesovermistreatmentofNigerianstaff.
Complaintsofpoortreatmentaremoreprevalentamongthoseworkingatthelower
levelsinretailshops.Therearefewcomplaintsamongthosewhoareengagedatmore
seniorlevelsinkeyIndiancompanies.54TherehavealsobeenallegationsthatIndian
familiesmistreattheirdomesticstaff,particularlyfemalestaff.Besidesmanyofthese
peoplebeingoverworked,thereareclaimsthatsomearesexuallyabused.55
Finally, someNigeriancivil societygroupsbelieve that Indianbankshave joined
banksinWesternEuropeancountriesandtheUSwherethecorruptNigeriangovernment
officials have put their stolen wealth.56 Although Nigerians do not hold the Indian
governmentresponsiblefortheNigerians’corruptactivities,theyareunhappythatthe
Indiangovernmentisdoinglittletocondemnthepractice.
ChineseactivitieshaveattractedtheattentionofNigeriansinthreedifferentways.
ThefirstistheperceivedqualityofgoodscomingfromChina.Thereisawidelyheld
assumptionthatChineseproductsareofverylowqualityandthatpeopleinsearchof
durableproductsshouldavoidthem.ThisisanissuethatChineseofficialsinNigeriafind
mostobjectionable.TheyclaimthatcheapproductsentertheNigerianmarketbecause
NigerianbusinessmenoftentraveltoChinawithaspecificrequestforlow-qualityproducts
inordertomaximisetheirprofits.FewNigeriansareawareofthisandendupwiththe
impressionthatChineseproductsareoflowqualityingeneral.Thesecondconcernhas
todowiththewaytheChinesetreattheirNigerianworkers.Manyworkerscomplainthat
theyarenotwellpaidandthatthedemandsonthemareenormous.Somecomplainthat
theChinesetendencytopayinadequatewagesisbeingexportedtoNigeria.Therearealso
thosewhocomplainofunfairdismissalandverbalabusefromtheirChineseemployers.
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Finally,ChinaisaccusedofunderminingNigerianmarkets,especiallyitsclothingmarket,
withtheinfluxofcheapproductsfromChina.Thisseemstobeacomplaintthatfollows
ChinaacrossAfricancountries.
C o N C l u S I o N
Nigeria’s relationship with the BRICs is as complex as it is extensive. It is also a
relationshipthatgovernmentsonallsidesconsidermutuallybeneficial,evenifNigerians
aresometimescautious.Increasingly,however,westerncountriesthathavebeenunseated
bytheemergingpowersarepoisedforacomeback.DuringavisittoNigeriainJuly2011
UKPrimeMinister,DavidCameron,madeitclearthatChina’sinterestinthecountryisa
causeforconcern;andthatitwashisintentiontoensurethattheUKrivalstheBRICsin
tradewithNigeria.Thecomingyearsarelikelytoseegreaterfriendshipsdevelopbetween
NigeriaandtheBRICs.However,Nigeria’sinclusionintheleagueofemergingnations
seemsanimportantgoalforthecountry.ThiswouldseetheacronymBRICS(following
SouthAfrica’sinclusioninApril2011)beingamendedtoBRINCS,tobringonboard
Nigeria.
e N d N o t e S
1 Rochester:UniversityofRochesterPress,2007.
2 Oxford:OspreyPublishingCompany,2005.
3 Aldershot:AshgatePublishers,1996.
4 London:BritishAcademicPress,1994.
5 Co-authoredwithJohnMackinlayandFunmiOlonisakin.Tokyo:UnitedNationsUniversity
Press,1999.
6 Co-editedwithAdebayoOyebede.Trenton:AfricanWorldPress,1998.
7 FormoreontheoverallactivitiesoftheBRICsseeAldenC,China in Africa.London&New
York:ZedBooks,2007;RotbergRI(ed.),China into Africa: Trade, Aid and Influence.Cambridge,
MA:WorldPeaceFoundation,2008;TaylorI,China and Africa: Engagement and Compromise.
London&NewYork:Routledge,2006;ZhaoS(ed.),Chinese Foreign Policy: Pragmatism and
Strategic Behaviour.NewYork&London:MESharpe,2004;RaineS,China’s African Challenges.
London:IISS(InternationalInstituteforStrategicStudies),2009;BrainardL&LMartinez-
Diaz(eds),Brazil as Economic Superpower? Understanding Brazil’s Changing Role in the Global
Economy.Washington,DC:BrookingsInstitutionPress,2009;WintersAL&SYusuf,Dancing
with Giants: China, India and the Global Economy.Washington,DC:WorldBank,2007;Letiche
JM,Russia Moves into the Global Economy.London:Routledge,2007;OECD(Organisaton
forEconomicCo-operationandDevelopment),Globalisation and Emerging Economies: Brazil,
Russia, India, Indonesia, China and South Africa.Paris:OECD,2009;SujathaB,BRIC Economies:
Opportunities and Challenges (Brazil, Russia, India and China).Hyderabad:ICFAIUniversity
Press,2006.
8 AsrecentlyasJune2011,theAmericanSecretaryofState,HilaryClinton,declaredduringa
visittoLusaka,Zambia,thattheUSisdisturbedatthewaysinwhichChinaisconductingits
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activitiesinAfrica.ShestatedthattheUShadstarteddiscussionswithZambiaaboutwhatit
seesasthenegativeconsequencesofChinesepoliciesinthecontinent.
9 FormoreontheNigeriancivilwar,seeDeStJoreeJ,The Nigerian Civil War.London:Hodder
&Stoughton,1972.
10 Formoreonthis,seeAlaoA,Natural Resources and Conflict in Africa: the Tragedy of Endowment.
Rochester:UniversityofRochesterPress,2007.
11 Keyofficeholdersinthecountry,includingtheInspectorGeneralofPolice,StateGovernor,
bankingexecutivesandheadsofmajorfederalparastatalhave,atdifferenttimesinrecent
years,beenjailedforcorruption.TherearecasesbothwithNigeriaandEuropeofformerkey
politiciansaccusedofgraft.
12 ThefieldworkforthisstudywasconductedduringtheApril2011electionandtheauthorwas
abletoobserve(unofficially)theelectionsinsomeofthestates.
13 TheNigerianarmedforceshavetakenpartinseveralpeacekeepingmissions.Theseinclude
thoseinLiberiaandSierraLeone,wherethecountryleadsuccessfulregionaloperationsthat
addressedbittercivilconflicts.
14 Ofthe34Brazilianembassies inAfrica,16wereestablishedduringtheadministrationof
PresidentDaSilva.
15 LohorJ,‘Nigeria,BrazilSignBilateralAgreements’,This Day Online,Nigeria,6September2005.
16 Ibid.
17 See‘PressreportfromGroupof15:Thesummitlevelgroupofdevelopingcountries’,Geneva,
November/December2006.
18 ItwascalculatedthattheMambillaProjectinthecountry’snorth-easternstateofTarabawill
generate2 600megawattswhencompleted.
19 TheSouthAtlanticPeaceandCooperationZonewascreatedin1986throughaUNResolution
andisaimedatpromotingco-operationandpeaceintheregion.
20 SeeAlukoO,Essays on Nigerian Foreign Policy.London:GeorgeAllen&Unwin,1981.
21 SeeNigerian Newspapers World,‘LowtradevolumewithNigeriaworriesRussia’,13June2011,
http://www.nigeriannewspapersworld.com/plus/view.php?aid=3954.
22 ThelaunchingofNigeria’snationalsatellite,whichstarteddevelopmentinNovember2001,
waspostponedinJuly2003becausetheRussianSpaceAgencyhadtolaunchamilitarysatellite
duringthatperiod.NigeriaSat-1isoneoffivesatellitesthatwillmakeupanetworkknownas
theDMC.
23 Formoreonthis,seeKuraSB,‘Nigeria–Indiaeconomic,politicalandsocio-culturalrelations:
Criticalreflectionsforcontinuousmutualco-operation’,International Journal of African Political
Studies,5,1,2009,pp.1–31.
24 Figures obtained from the Indian High Commission in Nigeria. Indeed, a Nigerian is a
prominentmemberofoneofthemajorfootballclubsinIndia.
25 IndianHighCommission,Nigeria.
26 Ibid.
27 SeeThe Economic Times,‘40firmstakepartinIndianpharmaexhibitioninNigeria’,24March
2011.
28 Nigeriannaira.
29 EdomaruseC,‘LifeimprisonmentforIndianshippingfakedrugstoNigeria’,This Day,30
March2011.
30 ChimaO,‘ECOMANKpartnerAirtelonmobilebanking’,This Day,Lagos,7June2011.
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C H I N A I N A F R I C A P R O J E C T
31 OsuagwuP,‘Newinvestors,Zen,locatesNigeriawithsixmobilephones’,This Day,Lagos,15
April2011.
32 GesindeS,‘DanaMotorspartnersaffordablecarsforKiadealership’,Saturday Tribune,Lagos,
19March2011.
33 OsagieC,‘Notore,IndiangiantTatainlandmarkchemicaldeal’,This Day,Lagos,14April
2011.
34 The Economic Times,‘NTPClookingtorevisitproposalforNigeriaventure’,13February2011,
http://articles.economictimes.indiatimes.com/2011-02-13/news/28539623_1_trincomalee-
region-coal-and-gas-based-power.
35 FiguresobtainedfromtheIndianHighCommission,Abuja,Nigeria,16March2011.
36 In2005theOVL,UK-basedEquatorExplorationandNigeriancompanyOwelE&PLimited
hadmadethewinningofferofapproximately$175millioninsignaturebonusforBlock321
and$310millionforBlock323.KNOCexercisedarightoffirstrefusal,whichithadobtained
inlieuofdownstreaminvestmentcommitments.
37 Itwaslaterdiscoveredthatoneoftheblocks(275)maynotbelucrative.
38 For example, there is a general impression that corruptionhaspercolated all aspectsof
Nigerianeconomicandpoliticallife.Mostindexesoncorruptionratethecountryasoneof
themostcorruptintheworld.TheTransparencyInternationalCorruptionPerceptionsIndex
for2009rankedNigeria130thoutofthe180countriessurveyed.
39 AkeyareawhereNigerianeedsChina’ssupportisinitsbidforapermanentseatintheUN
SecurityCouncil.Beijinghaspromisedtoprovidethissupport.
40 OsagieC,‘Nigeria–Chinatradehits$7.76billion’,This Day,Lagos,5April2011.
41 ABREC,pressrelease,http://www.faber-abref.org/fichiers/Press_release_ABREF_GLOBAL.pdf,
accessed15June2011.
42 OchayiC,‘Federalgovernmentunveils25yearsdevelopmentplansfortherailway’,Vanguard,
28July2011.
43 HurstC,‘China’soilrushinAfrica’,Institute for the Analysis of Global Security,July2006,p.11.
44 OriKO,‘Nigeria:WillChina’soilfirmbedifferentinoperationsintheNigerDelta?’,Afrik
News,2October2009,http://www.afrik-news.com/article16239.html.
45 OdogboD,‘FederalGovernmentFirmssignEasternRailContract’,This Day,Lagos,8April
2011.
46 Pressinterview,RongYansong,EconomicandCommercialCounselloroftheChineseEmbassy
toNigeria,11March2011.http://ng.china-embassy.org/eng/xw/t771224.htm,accessed15July
2011
47 AlikeE,‘FederalgovernmentcededOlorunsogopowerplanttoChinesefirm’,This Day,Lagos,
16February2011.
48 ThisbankwasestablishedthroughamergerbetweenStanbicBankofNigeriaandindustry
giantChina’sIBTCCharteredBank.
49 ChimaO,‘Accessbankgets$30mfinancingfromChinaEximBank,This Day,Lagos,22March
2011.
50 OneoftheseisHonourableOjo,aformermemberoftheFederalHouseofRepresentativewho
attendedaconferenceorganisedbytheSouthAfricanInstituteofInternationalAffairsandthe
CentreforDemocracyandDevelopmentinAbuja,May2011.
51 WangJ,‘NigerianfindspopstardominBeijing’,New York Times,11March2011.
52 ANigerianseniorcivilservantnotedthatthreeofhisfriendsdiedaftertheyhadundergone
medicaltreatmentinIndia.However,headmittedthathewasunsurewhetherthiswasasa
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resultoftheseverityoftheirconditionorthequalityoftheIndianmedicaltreatment.This,of
course,isaperceptionissue,butitisworthrecordingwhatsomeNigerianelitesthinkabout
thesubject.
53 Personalinterview,FemiEyiowuawi,UndergraduateofObafemiAwolowoUniversity,Ile-Ife,
Nigeria,19December2010.
54 Forexample,theauthor’sdiscussionswithaNigerianstaffmemberin‘ParkandShop’,an
Indianretailshop,andaNigerianseniorstaffmemberofDanaAirlinesshowthesedifferent
perceptionsofIndiansasemployersinNigeria.
55 Anacademicwhoislookingatthesubjectofsexualabuse,DrOlutoyinMejiuni,claimedthat
therehavebeenfewcasesofsexualabusereportsofdomesticstaffbyIndians.Shepointedout
thatotherforeignnationalsarealsoinvolvedinthispractice.
56 TheformerAmericanambassadortoNigeriaalsopointedthisoutinapublicinterviewin
December2010.WiththeincreasingclampdownonmoneylaunderinginEuropeandthe
US,IndiaandChinaarebecomingsafehavensforNigerianswhohavelootedtheircountry’s
treasury.
South African Institute of International Affairs
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