By Ikenna Emewu in Beijing
Nigeria’s economy is rolling downhill and that is no longer news. The downturn has created a lot of problems for the nation that hitherto had been struggling to find a way out of the crunch.
The call for Nigeria to diversify its economy beyond oil as one the countries of the world with the highest potential for a vast range of vibrant economic options has been as old as the oil discovered in the 1950s in the Niger Delta, which was never heeded nor received more than lip service by the country’s leaders.
In the past five years, crude oil business in the international market has been dipping such that even the highest oil explorers and exporters have started having it rough. That was one of the reasons Nigeria got into troubled waters. But prior to that, a few Nigerian business people had started turning their energy to some uncharted, new areas, including international partnerships and linkages to attract business into the country’s economy that is mainly private-sector driven.
That was the reason the China-Nigeria business relationship flourished more with private-sector investors, and the investments have featured prominently in clusters and special economic zones like those in Lekki, Igbesa in Ogun State and the Calabar Free Trade Zone. They target furniture and home appliances, like the Haier home appliance manufacturer. Last week, during a tour of the Shandong District of China, Nigeria was a constant mention in China’s business reach in Africa.
At the world-class Inspur Technology, China’s number one wireless and data management service providers in Shangdong, capital city of Jinan, Nigeria was an issue, and when Daily Sun was stepping out of the premises, a team of Africans were disembarking from their bus. Someone immediately pointed in my direction as the people walked towards me to introduce themselves as Nigerians who had been in China for 10 days. We later found that they were staffers of the Systems Department of the Nigeria National Petroleum Corporation (NNPC) on a training tour of China. The Inspur tour guide had mentioned Nigeria as one of the destinations they have in Africa. Mr. Meng Qingwei, the regional general manager for Africa regions, including Nigeria, spoke highly of their prospects in the Nigerian market.
At the government level also, in the last week of June, the then deputy petroleum minister and chief executive of the NNPC, Dr. Ibe Kachikwu, was in Beijing with his team for a business drive, which Daily Sun reported prominently. Kachikwu in his interview with Daily Sun, hinted that his team signed about $90 billion worth of MoUs with Chinese investors intent on playing in the country’s oil and gas sector.
At the Haier Technology office in the port city of Qingdao, the tour guide explained that they have a flourishing manufacturing spot in Nigeria, which he called one of the most prominent in Africa.
China’s investments in Nigeria also target steel and construction materials, food and beverage, automobile assembly like Innoson Motors in Nnewi, BAIC in Calabar and the Sinotruk that would come on board for production in November.
But of special note was the manner in which Aliko Dangote has been a constant feature in China’s investment in Africa even beyond Nigeria, for instance, his $4.34 billion deal with Sinoma, a major Chinese engineering group, for the production of cement in eight African countries in August last year. During Daily Sun’s visit to the office of the Jiangsu Overseas Company in Nanjing in April, the name Dangote was on their lips. During a similar trip to the China Africa Development Fund, established three years ago with an asset base of $10 billion by President Xi Jinping of China, the major reference was that the fund had very strong business links with the Dangote Group as Mr. Zheneng Wu (Johnny), the Deputy Managing Director, Marketing and Investment Cooperation, revealed.
A meeting with Sinotruk at their head office in Jinan was very revealing about Dangote’s influence in China and how he flies the Nigerian flag over here.
While playing their profile video, Aliko Dangote’s face featured so prominently and later the African Division President/Executive Director, Zhang Yuzong, spoke to Daily Sun and assured us that as he travels to Lagos in November they expect to switch on the Sinotruk production line in Lekki that is expected to generate hundreds of jobs. That business came in 2013 after Dangote signed a $100 million deal with Sinotruk.
Last month, the Chinese charge de’ ffairs at the Nigerian Embassy, Qin Jian, stated in Kaduna that China’s investment in Nigeria has hit $2.5 billion and most of iut was from private investors.
On August 16, 2016, China’s largest newspaper, People’s Daily ran a report of the business interest of Beloxxi Industries, the continent’s largest and most automated biscuits manufacturing plant in Agbara, Ogun State, with corporate head office in Ikeja, Lagos.
Beloxxi cream crackers, the flagship product, is widely distributed in Nigeria, other African countries and served aboard most Nigerian outbound international airlines such as Lufthansa, KLM, British Airways, Emirates, Ethihad, Ethiopian, Kenyan, South African Airways.
The interview by the president/CEO of Beloxxi attracted so much business interest in China as it announced the conclusion of the firm’s minority shares divestment of $80 million to a German investment group. The report stated that: “Between July 1 and August 1, Beloxxi Industries concluded a $80 million minority equity sale deal to a consortium of three international firms led by KFW-DEG Bank of Germany, 8Miles of London and African Capital Alliance of Nigeria. This landmark transaction represents the largest transaction in the biscuit sector of the Nigerian economy.”
The deal also announced by the Financial Times of London has expanded the reach of Beloxxi to the creation of a conglomerate, the Sagemill Group that targets to diversify Beloxxi’s operations in allied sectors such as flexible biscuit wrappers production, corrugated cartons, compressed natural gas stations and, ultimately, an industrial park. While the first three already have sure Chinese production contacts and partnerships in firms around Shanghai and Guangdong, the last, an industrial park, which is a specialty of the Chinese economic model, is also looking towards China and already forging impressive and credible discussions with Chinese partners and agencies with interest in investment in Africa.
The company said its credibility was a potent force, even as a major Chinese government agency confided in Daily Sun that a letter of interest between it and Beloxxi was already getting positive attention both in Beijing and in the African outpost of the agency. When concluded as expected, judging from the encouraging disclosures from the two sides, the deals would culminate in the penning of business partnerships that would run into hundreds of millions of dollars in power and agriculture, especially as Beloxxi has interest in cultivating the most needed grains for production in the country through which it intends to create at least 4,000 new jobs.