Buhari and a harvest of Chinese loans

Going by the number of Memoranda of Understanding, MoUs signed by Nigerian delegation, it’s being reported that president Muhamadu Buhari’s China trip has already yielded a plethora of harvests of projects for partnerships in Nigeria.

Take the six (6) billion dollars Chinese  loan of which foreign affairs minister, Geoffrey Onyeama said Nigeria has been given a blank cheque, to draw from as soon as appropriate projects to apply the funds are identified.

Obviously, mr president was justifiably elated and in a hurry to harness the benefits, hence he immediately directed that a committee to implement the MoUs should be set up without delay.

In the light of the above, there are two low hanging fruits to which Nigeria can apply the jumbo Chinese loans immediately.
Without much ado,Nigeria should emulate Ethiopia where the Chinese has helped build a functional light railway system that has helped decongest the roads.Already, as the Chinese premier Xi Jinping pointed out in his welcome speech  to president Mohamadu Buhari and his visiting entourage,Nigeria is the first country to adopt Chinese gauge for her railway line and that project is still ongoing.

With the $6b Chinese loan, the lagos calabar and lagos kaduna rail projects creating furore  in the parliament, looks like a done deal as the presidency does not need to appropriate the funds from budget 2016.

Wether the dissenting Nigerian lawmakers like it or not, the presidency seem to have sealed up the transaction in far away China while the opposing factions were brawling over it in the National Assembly, NASS.

Also, the new automotive policy in Nigeria focused on local assembly of vehicles to create employment, which the present govt inherited, can be boosted through partnerships with Chinese firms.

Again, Ethiopia where the Chinese are producing the Lefuan and Geely vehicles which are brands of sedan cars, should be considered for replication.

The Ethiopian auto policy which is similar to the one being implemented by the National Automotive Council, NAC in Nigeria could be accomplished with the Chinese loan of $6b exchanging at N300-$1 would ($6b times N300=N1.8t) which is about 1/3 of Nigeria’s 2016 budget of N6.06t and equivalent of the amount that has been earmarked for investment in capital projects this year.

Today, a four cylinder Toyota, Nissan,Volkswagen or Ford,sedan car that costs about $15,000 dollars in the international market would cost over three times that amount to import into Ethiopia due to the heavy tariffs and duties imposed, but a Lefuan or Geely sedan car, locally assembled by the Chinese, can be obtained at about $15,000 in Ethiopia.

This is because in collaboration with the govt, the Chinese are helping create jobs in Ethiopia through the vehicle assembly plants.

Now, Nigeria has been struggling to operationalize a similar policy through her automotive master plan put in place a couple of years ago, but yet to start yielding benefits owing to half hearted implementation by both the outgone and new regimes of govt.

To date over twenty European , American and Asian auto assembly plants have been set up across Nigeria to boost employment.

Asian, European, American mother firms of the assembly plants being assembled should emulate China by providing soft loans to their subsidiaries to fund their plants to enable them compete favorably with their Chinese counterparts.

Most of the European and American countries have EXIM banks while Japan has JICA which like the EXIM bank is geared towards export promotion.

The proposed local content in govt procurement bill which has passed through second reading at the Nigerian parliament underscores govt quest to discourage  the importation of fully assembled vehicles,while promoting those assembled in Nigeria with reasonable local input.

Although there are a variety of sectors where Chinese interventions in Nigeria have been without positive outcomes: be it the $400m security surveillance cameras project in abuja and lagos, many years after,is yet to be commissioned; the $500m launch of Nigerian satellite in orbit by China ,which eventually literarily fell off the skies a couple of years after or the yet to be completed Chinese gauge railway project; the problem has largely been due to the Nigerian factor, which is basically application of political considerations to economic situations.

Be that as it may,the Chinese experience in Nigeria has not always left a sour taste in the mouth as the current arrangement to build airport terminals in Abuja, Lagos and other cities in the northern and southern parts of Nigeria are on course.

Furthermore,Chinese built refinery in neighboring Niger Republic is functional and has helped solve energy challenges in that land locked and resource challenges country, just as the highway stretching from Accra to Tema in Ghana, built by the Chinese , has also eased transportation issues in the old Gold Coast, now proud of her new status as a new member of the elite league oil producing nations.

As evidenced by the foregoing,it is the corruption baggage of Nigeria mixed with the equally poor corruption record of the Chinese that is responsible for the negative outcomes of Chinese projects and program in Nigeria.

With a leader whose political career is built on integrity,president Buhari now at the helm of affairs, both the Chinese and Western countries that are currently practically throwing aid and loans  at Nigeria,are entertaining no fears that Nigerian masses would get value for their money in the present dispensation.

That’s same reason l’m not with those that are worried that the new loans would exacerbate the current debt situation whereby Nigeria is allocating 25% of budget 2016 to servicing of debt.

Considering that our debt to GDP ratio is not out of sync with global best practice, at about 25%-some countries like USA and Japan operate 150% to GDP ratio-in a way,being credit worthy is a form of demonstration of confidence in the economy of a nation, hence l regard the overt and covert offers of credit to Nigeria by the likes of the International Monetary Funds, IMF through her myriad of comments disguised as advise , a positive gesture.

Another bright light that president Buhari’s China visit could shine on Nigeria in is the area of farming with the $15m bilateral loan offer for the establishment of fifty, 50 pilot/experimental farms nationwide. When implemented,this would serve as a boost to this regime’s adoption of agriculture as the centre piece of her food security strategy through backward integration which is why it should cheering news to all.

At the nascent stage of this this administration, president Buhari’s visits to London , U.K; Paris, France and Berlin Germany to attend EU meetings, earned him promises of support towards the war against Boko Haram terrorists and they have largely made good their promises through supply of equipment and sometimes funds.

The U.K, for instance recently provided £32m to Nigeria for energy and humanitarian needs.

Similarly,  the United States of America had promised support after mr president’s visit to the White House and the Americans made good their promise by providing support through military specialists to guide our military,supply of armaments like mine sweepers as well as drones deployed to Nigeria.

After all said and done,the frequent travel abroad by mr president has not been in vain, as it is being portrayed in some quarters. In fact,president Buhari’s shuttle diplomacy to the Western world ,Middle East and Asian  countries-including Saudi Arabia, Quatar and lran, has yielded bountifully.

However, more than the others,the visit to China has yielded more rapid result, perhaps  because Chinese diplomacy appears to be swifter than the Western type, as she issued Nigeria a blank cheque of $6b upfront and also granted $15m as bilateral grant without equivocation.

When Nigeria cashes the Chinese cheque, it is hoped that the cynics would see what we say when he was visiting the Western world and what we see today as he returns from China.

Most importantly,when you compare president Buhari’s attraction of numerous goodwill, technical support militarily and funds to Nigeria without compromising our country- like ceding off any part of Nigeria like the Bakasi  peninsula to another country- to the situation in Egypt whereby  two islands- Tiran and Sanafir in the Red Sea were traded off to Saudi Arabia after at least fifteen,15 bilateral agreements were signed- including one for an oil deal worth $22b to Egypt- then it would be realized that president Buhari should be commended, not vilified.

The Saudi King Salma had been in Egypt since last Thursday for a five day official visit which ended on Sunday,17/4/2016.

According to New York Times,Saudi Arabia, a staunch ally of Egypt has   since 2013 invested about $12b in the north African country which has been in the throes of economic pains arising from the so called Arab Spring.

Remarkably, President Buhari’s bouquet of goodies from China has no such strings attached, which should be celebrated not scorned.

Onyibe, a development strategist and futurologist is a former commissioner in delta state and also  an alumni of the Fletcher school of Law and Diplomacy, Massachusetts, USA, sent this piece from Asaba, Delta State.