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Andrew Leun g. Regenerating the Niger Delta a China Story Andrew K P Leung, SBS, FRSA A presentation at the African Business Forum, Commonwealth Business Council Marriott Hotel, Grosvenor Square, London Tuesday, 7 July, 2009. International Consultants Ltd.

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andrew leun g

Andrew Leung

Regenerating the Niger Delta

a China Story

Andrew K P Leung, SBS, FRSA

A presentation at the

African Business Forum, Commonwealth Business Council

Marriott Hotel, Grosvenor Square, London

Tuesday, 7 July, 2009

International Consultants Ltd

  • Nigeria-China Relations
  • FOCAC Beijing Action Plan 2007-9
  • Latest investments in oil resources
  • Investment in infrastructure
  • Private enterprises & SMEs
  • Trade and investments in agriculture
  • China’s approach to Africa
  • Challenges of the Niger Delta
  • Responses and Opportunities
nigeria china relations
Nigeria - China Relations
  • Policy towards China warmed 1958. Ambassadors exchanged 1971 (before Open Door Policy)
  • Respects Nigeria’s non-aligned v China’s One China policy
  • China’s Africa’s imperatives:
    • Surging demand for energy/resources tosustain fast growth
    • Energy security - failed CNOOC attempt for UNOCAL – Nigeria Africa’s biggest oil producer; oil 75% of Nigerian’s exports (China imports only 12% of Africa’s oil (=1/3 of China’s demand) v 31% in the case of US and EU)
    • South-South solidarity – UN, WTO
    • Taiwan factor
    • Africa near economic take-off – comprehensive links
  • Jan 06 MOU Strategic Partnership, 1st African nation to sign
  • 12/2006 1st direct flight to Africa - Beijing Lagos via Dubai
  • > France as Africa’s 2nd largest trading partner after US ($107b 1st 8 mths 2008) ($5.2b trade deficit for China) > FOCAC 3 target $100b by 2010 by 2 yrs); FDI Africa $74.8m 2003 to $1.57b 2007 (China Review, Spring, 2009 & EAI Background Brief 05.03.09)
  • Sino-Nigerian trade rocketed - $384m 1998 - $4.3b 2007; Nigerian non-oil exports to China quadrupled. FDI into Nigeria at $3b as China’s most important trading partner S of Sahara
focac 3 beijing action plan 2007 9
FOCAC 3 Beijing Action Plan 2007-9
  • 100 senior agricultural experts + 10 demo sites
  • $5b China-Africa Development Fund to assist reputable Chinese companies to invest in Africa
  • Increase zero tariff items from 190 to 440 for African countries with diplomatic relations
  • Double development assistance by 2009
  • $3b preferential loans and $2b preferential export buyers’ credit for African countries
  • Cancel interest-free loans due by 2005 for HIPCs (heavily-indebted poor countries)
  • Train 15,000 African professionals
  • 100 rural schools + double scholarships to 4,000
  • 10 hospitals + 30 anti-malaria clinics + $37.5m for anti-malaria drugs
  • 300 young persons in Chinese Young Volunteers Serving Africa Program to support education, agriculture, sports, and health-related programs.
investment in oil resources
Investment in oil resources
  • Nigeria needs $10b 2010 for proven reserve 40 bb (People's Daily, 20.4.05) (Light low-sulphur ‘sweet crude’)
  • July 2005, PetroChina $800m for 30,000 bpd over 5-yr period, renewable annually
  • Jan 2006, CNOOC $2.7b 45% stake in Total-operated deepwater oilfield peak 225,000 bpd
  • Four oil exploration licenses in exchange for $4b in Nigeria’sinfrastructure; 7 development agreements for $500m export credit (Reuters, April 27, 2006)
  • Controlling stake in Kaduna oil refinery 110,000 bpd
  • Preference for Chinese firms in Niger Delta + Chad Basin
  • Sinopec 3-yr contract for OML64 + OML 66 with NNPC’s NPDC
  • China’s ‘right of first refusal’ on oil blocs in return for repair works for Kaduna Refining and Petrochemicals Company, hydropower plant in Mambila, Plateau State etc
  • CNOOCdeal with SAfrican Petroleum Company for $2.3 b 45% stake in OML 130, 500 sq m offshore oil and gas field near the Niger delta. Extra $2 b to develop the field
  • 24 June, 2009 Sinopec announced purchase of ADDAX, a Swiss co listed in London and Toronto worth $9b with oil drilling rights in Iraq, Gabon and Nigeria (China’s largest overseas acquisition so far)
investment in infrastructure
Investment in infrastructure


  • 2006 investment to establish a Lekki Free Trade Zone (FTZ) in Lagos, 1stin Africa (150 sq km @$5b)


  • October 2006, $2.5b to modernize 7.800 km Nigeria Railwaylinking all 36 states and major cities


  • Feb 2005 Helped build and launch Nigerian satellite
  • Chinese Civil Engineering and Construction Company (CCECC) built the Nigerian Communications Commission building in Abuja
  • April 2005, ZTE Corporationentered a deal with NITEL to expand Nigeria’s CDMA network
  • Huawei Technologies $200m telecom equipment for a nationwide mobile phone CDMA service. Helps secure CDB $20 m for Reliance Telecommunications Ltd. (RelTel) to become largest fixed wireless co in Nigeria; Lagos + Abuja offices employ manyNigerian graduates.

Social infrastructure

  • Over past 5 yrs, > $ 5.5 m of medical equipment + drugs; water supply projects + training of technicians.
private enterprises and smes
Private enterprises and SMEs
  • Growing back-up trade e.g. Shanghai ($172m 2008 +10.3%) symbolized by ubiquitous Okada motor-cycles
  • China’s Geo Engineering Corporation (GEC), CCECC and a Nigerian Construction firm, Sky Technical on anti-flooding, anti-mosquito infestation and drainage construction
  • Jan 2009 agreement reached on a vehicle assembly plant in Lagos
  • Zhuhai Minghong Group Corporation Limited to revive the 350-acre Awoomama Resort in Oru East of Imo State
  • 2 July 2009 Chinese business delegation (led by Zhejiang Provincial Gov) promised to partner with Ogun State government to develop seaports, rail, industrial estates, agriculture, and exploitation of natural resources.
trade and investments in agriculture
Trade and Investments in agriculture
  • China to construct $2.5bhydropower plant for Adamawa
  • Over 500 Chinese experts and technicians in various fields of agriculture (e.g. small dams) in 20 states of the Federation, working with Nigeria agriculturists and farmers
  • July 2005 Genetic International Corporation of China (GICC) bought 1stconsignment of 100,000 metric tones of fresh cassava chipsfrom Nigeria. Thereafter order for another 102,000 tonnes. Alsococoa beans and rubberand other agricultural produce.
  • Nigeria and China to cooperate under redesigned National Programme on Food Security on developing commercial livestock to improve Nigerian socio-economic conditions.
  • China to begin acquiring agricultural assets overseas (e.g. soybean production in Brazil) because of rising concern for own food security.
china s approach to africa
China’s approach to Africa
  • Principles : Friendship, Equality; Mutual Support; Win-Win Development
  • Modalities – Non-interference; Non-conditionality, Non-confrontational
  • Challenges
    • Oil has not reduced poverty but has led to deprivation, degradation, and violence (e.g. Niger Delta)
    • Popularity with host countries v conflict with domestic and international demand for governance improvements and safeguards of human rights
    • Movement for the Emancipation of the Niger Delta (MEND) – sabotage and terrorism. Over 700 oil workers evacuated from oil platforms in Delta inc ½ Chevron Abiteye oil pipeline bombed (18.06.2009 )
    • Chinese cheap products and imported labor threaten local jobs and businesses and their export markets
    • Chinese SMEs outcompete local informal business sector (90% of private sector in Africa employ mostly Chinese except for low-end jobs (e.g guards)
    • China’s explosive demand for energy blamed for growth of biofuels – food prices affecting food-deficit communities
    • Language, culture, religion, and racial barriers
    • Inadequate mutual media presence – lack of understanding of grass-root sentiments
    • Lack of capabilities to interact with local and international NGOs
    • Lack of capacities for institution building
challenges of the niger delta
Challenges of the Niger Delta

(UNDP Niger Delta Human Development Report 2006)

  • ‘administrative neglect, crumbling social infrastructureand services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict.
  • Corruption, mismanagement, human rights abuses, inadequate access to justice +human security =alienation
  • Oil Curse - x diversified and sustainable economy Original palm oil and rubber plantations neg or abandoned.
  • X accountability, transparency, integrity esp local gov
  • Lack of peace, education, justice and equity (resources)
  • X access, redress + empowerment (inc women)e.g.NDDC
  • Gross inequalities and wealth distribution
  • Lack of coordination of all stakeholders
  • Env degradation~ecological collapse: illegal logging, gully

/coastal erosion, salination, oil spills, gas flares, subsidence

  • Regulatory agencies ineffective. Cases against oil companies only in Federal courts, out of reach for most
  • Numerous armed disorders and unrests
  • Small settlements + swampy topography x sustainability
  • High unemployment > oil wealth. 85% in informal sector
  • Nearly all school facilities in extreme disrepair Large young but unskilled population in shady/criminal activities
  • Poor infrastructure - roads, water, power, fuel, waste, telecom
  • Dismal lack of healthcare and access to safe drinking water
  • Urban squalor, unemployment and crime
  • Aids/HIV endemic - poverty, inequalities, marginalization, x edu
  • Social instability, decayed social values - anger, hopelessness, cynicism and violence
responses and opportunities
Responses and Opportunities
  • Peace, stability,+ well-being of the many are the foundations of governance. A country’s real wealth is the quality of its people. Instability of Delta bad for Region + resource-hungry world
  • More oil revenueallocation + accountability (trust funds?) social + capacity building (rule of law, access to justice, real democracy)
  • Embrace the Extractive Industries Transparency Initiative (EITI)
  • Promote broader skills and output outside the extractive industries -
    • Re-vitalize agriculture and traditional economic activities
    • Create agro-businesses
    • China to invest in manufacturing in the Niger Delta
  • Intensify cooperation on food, health, education, poverty reduction, law and order, work safety, the environment, human rights with local and international actors, including investors -
    • UN operational agencies, African Union, African sub-regional bodies, G8 Summits, civil society (inc NGOs)
    • China Public – PPP ‘sans frontiers’ to partner with local and international NGOs
  • Bilateral consultations with stakeholder countries
  • An FOCAC Permanent Secretariat?
  • UNDP’s 7 Agendas; Peace, Local Government, Diversify the Economy, Social Service and Inclusion, Sustainable Livelihoods, Integrated Approach to AIDS/HIV, Partnerships for Development
andrew leun g12
Andrew Leung

International Consultants Ltd

Thank you

Andrew K P Leung, SBS, FRSA