Photograph — Bullfax.com

If President Muhammadu Buhari were to explore an alternative option to receiving a mouthwatering investment into the country, he could simply just make a request to Taiwan to pledge $50 billion in exchange for Lagos. The government’s desire for foreign investments at any cost has made the President cowardly relegate Taiwan to the background while embracing the loving “One China.”

Nigeria’s search for investment “saviours” has been reflected in our inability to negotiate deals that will benefit the country. Rather, it has been that of increasing conditional promises the country must fulfill to obtain loans.

The critical issue is that a country that is using a quarter (1.837 trillion naira) of its 2017 budget to service debts is definitely developing its policies and making decisions on the instruction of his debtors and not to the favour of its people. Plainly speaking, the Nigerian populace hardly has a voice in the development of their country.

Nigeria’s alliance with China has reflected a history of parasitism rather than a symbiosis. The situation gets worse as it is almost now predictable that any new major infrastructural project is going to be implemented by the country’s profound lover even with no evidence of bidding.

It is unfortunate that Nigeria fails to learn from its neocolonialist partner–who has learned the art of negotiating even without having available resources to implement projects and has ensured that maximal benefit is gained from its project partners.

A typical example is China’s high-speed rail (HSR) industry. When the Chinese government wanted to expand its HSR, the Chinese government initially awarded the entire project to the Japanese government because of its stellar record of using the Shinkansen trainsets (Kawasaki).

However, Chinese nationalists rejected the issue of the HSR project to Japanese companies thereby making the Chinese Ministry of Railway (MOR) halt the project. The Chinese government then re-strategised and created a new invitation to bid. In the new bid, the Chinese government attracted more foreign companies especially from the West like Alstom, Siemens, and Bombardier. It also received a bid from a Chinese company led by Japanese consortium–Kawasaki.

The contract was initially then awarded to Alstom, Bombardier, and Kawasaki with the exception of Siemens who had refused to lower its bid. Siemens later had to compromise to get awarded a portion of the project.

What did the Chinese benefit from the project? They made the project more competitive making it attractive to bidders. The project, which was initially made as a winner-takes-all bid was changed, making these companies compete for a portion of the coveted HSR expansion. The Chinese government also ensured that there was a technology transfer leading to future trains being built by Chinese train-makers.

In Nigeria, the case is different. The lack of competitiveness has made projects to be stalled and executed at China’s pace despite agreements on stated deadlines. The Lagos Light Rail that commenced in 2008 with a completion deadline of 2011 is still under construction 6 years after the stipulated deadline.

The same rail project of just 27km was awarded at a cost of $1.2 billion compared to Addis Ababa’s 34km light rail, which was constructed at a cost of $475 million. The project in Addis Ababa started in December 2011 and the rail was ready for trial operations by February 2015. The Abuja-Kaduna standard Railway was constructed at a cost of $874 million.

More project delays

Nigeria’s alliance comes at an unfortunate time as the value of China’s yuan continues to nose-dive. The renminbi fell to an eight-year low in December following the US Federal Reserves decision to hike interest rates leading to a revving up of the greenback.

The Chinese foreign reserves fell by $70 billion in November 2016 in a bid to prevent the renminbi from slumping harder. In 2015, China lost $500 billion of their reserves to propping up the yuan. China has been experiencing huge capital flights as a result of its slowing economy and the rise in US interest rates.

The continuous fall in the Chinese reserves reflects that any commitments by China to Nigeria could face potential delays in execution especially if it would affect their economy. This poses the risk of the Nigerian government not enjoying such foreign investments. For example, the naira has fallen by over 160 percent since 2008, which has increased Lagos State’s cost of servicing their light rail project loan.

Why enjoy this romance?

Whether Nigeria supports the “One China” policy or not, it is high time the government starts making better negotiations that would favour its people. The country has huge potentials due to its vast amount of resources and large population but it is literally giving away its resources to its foreign partners who have joyfully exploited the country.

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