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Chinese Investments Shaping Belt And Road In Nigeria

Many in the country have wondered and still wonder what the Belt and Road Initiative (BRI) is and how it physically impacts on Nigeria given the country’s geographical location. But the BRI is not just about geography but networks establishing businesses.

China has shown the world time and again that the Belt & Road Initiative (BRI) is more than just a geographical route, but a series of networks to drive trade, security, people to people exchange among others.

In Nigeria the BRI is already making an impact through infrastructures built with the support of the Chinese government. Several of the country’s investments spread across the country are making this a tangible reality.

In Abuja, the Chinese Chamber of Commerce is in the forefront of setting the pace for not just the building of infrastructure but for trade and people to people exchange in line with BRI principles. It has been revealed that the investments made by Chinese companies to the Nigerian economy has ran into 20 billion dollars.

The president of the Chinese Chamber of Commerce (CCC) and Managing Director of CGCOC Ye Shuijin said, “Nigeria’s market has huge potentials and we have lots of partners in local companies. The Chamber can be called the political aspect of BRI. “We believe the country’s economy is developing, not as fast as that of China but the best in Africa and whatever challenges faced by the country, we have confidence in Nigeria,” he averred.

The president also pointed out that the Chamber is promoting economic and trade cooperation between the Chinese and Nigerian companies. The CCC initially had about 30 members when it started but now has over 100 members.

Through the Chamber, potential business partners are introduced from China to Nigeria and vice versa. It also offers assistance to business men going for the Canton fair. All of this is a part of the BRI.

“We hope the cooperation does not stop at trade cooperation but goes further to investments not only from China but from the rest of the world.

The Chamber has about 160 Chinese companies,” the President said. In terms of the CGCOC, formerly known as CGC Overseas Construction Group Ltd’s investments in Nigeria, Ye noted, “We partner with Nigerian suppliers for resources. 99 percent raw materials are bought locally for construction.”

The construction company takes pride in its capacity building programmes for staff. “We employ local staff and they are happy to be trained in skills and given work opportunities. We aim to add value every day,” Ye revealed. In general Chinese investments in Nigeria has provided jobs to more than 200,000 Nigerians over time. The CGCOC is not solely a construction company but is branching out into the agricultural sector as well as tourism.

“As a construction company we expanded our business to agriculture under the umbrella of CGC in Nigeria. We want to go into tourism as well, maybe in Lagos because tourism flourishes there. We have not explored this idea in Abuja,” he noted adding that the company seeks good partners to assist in the tourism sector.

Ye is of the view that the federal government should invest more in agriculture, mining and infrastructure to drive the economy towards development. “China gives us more options through BRI to provide more resources. BRI is a platform for economic growth cooperation. We need to take advantage of BRI,” he advised.

The China Harbour Engineering Company Limited (CHEC) is involved in a number of projects in Nigeria as well to include the expansion of the 5.4 kilometres of the Abuja – Keffi expressway and dualisation of the Keffi – Akwanga- Lafia – Makurdi Road project.

The Keffi-Markurdi road project commences from the southwest of Abuja and crosses the Federal Capital Territory and the states of Nasarawa and Benue.

The contract amount totals $542.14 million. While the China EXIM bank contributes 85 percent towards the project, Nigeria provides the counterpart funding of 15 percent of which some percentage has been paid.

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The 85 percent by China EXIM Bank is said to be in form of Preferential Export Buyer’s Credit. Nigeria it is disclosed, pays according to progress being made by the project. In an interview with the media, the Managing Director of CHEC, Zhang Wenfeng disclosed that CHEC entered the infrastructural market of Nigeria in 1994.

Having accumulated an extensive knowledge of Nigerian market after 25 years’ endeavour, CHEC has executed various projects across different fields, including dredging works in Calabar River, rehabilitation of Terminal B of Warri port, and construction of breakwater in Lagos. So far, there are two large-scale ongoing projects, Lekki Port and Keffi Road Project, with a total contract amount of over 1.5 billion U.S. dollars, an evidence of CHEC’s technical and financial capacity,” he said.

The expansion and dualisation of the existing carriageway intends to stop the long suffering of commuters and motorists caused by traffic jam on the Keffi-Akwanga-Lafia-Makurdi road and facilitate movement.

Meanwhile the Lekki Deep Sea Port in the Lagos Free Trade Zone after completion, is going to be the most modern and efficient port south of the Saharan Desert. The current challenges faced by the company are synonymous with the job description. In terms of road construction challenges are mostly to do with vehicular issues.

There are also challenges of compensation to persons whose lands are affected by the road development as there are issues regarding compensation of land owners which the government is yet to sort out, thereby causing delays and extended work times for the company.

Zhang further noted that the land acquisition and compensation are all part of the challenges faced as well as security issues. In terms of job creation, the head of Human Resources, Suzie Agas revealed that CHEC has Nigerians working in about 366 managerial levels and will in future create about 2000 jobs through progress made on its projects. She also divulged that the company abides by the laws of the new minimum wage of N30,000 for its least paid staff. CHEC started in the 1980s and became a subsidiary of China Communications Construction Company Ltd (CCCC) in 2005.

The company is a major operation arm of CCCC on an international level with CHEC’s 80 branches and representative offices have a global footprint in over 100 countries with human resource strength of over 15000 undertaking hundreds of international projects in the total turnover of USD 21 billion dollars.

In Nigeria, the company’s works include; Lekki Deep Sea Port Project, Trestle Construction, Trench Dredging And Backfilling Project at the Lagos Free Trade Zone. Its overseas jobs include the Yangshang Deep Water Port Phases I, II and III, Construction Of Marine Terminal, China, Hong Kong- Zhuhai- Macao Bridge, Hong Kong Boundary Crossing Facilities – Reclamation Works, China, Ampang LRT Line Extension Project In Kuala Lumpur, Malaysia.

The China Civil Engineering And Construction Corporation (CCECC) commenced the Lekki Free trade Zone In 2006 with cooperation of Lagos State government. It completed a community in Lekki Peninsula, a project in Ikoyi and Lagos Light rail. It has plans to cooperate with works and housing to develop real estate. Nigeria gives 15 percent of the funding.

The Lagos to Kaduna route is 39 percent done. The executive director of CCECC, Jacques Liao disclosed that the corporation has established over 11000 local jobs. In terms of workers the ratio of Chinese to Nigerian is 1:20. CCECC is said to be the first Chinese Engineering Company in Nigeria and commenced in 1981. With China being a construction country, CCECC has accumulated a lot of new skills overtime that is now useful in its works abroad.

The company sponsors some of its staff to China for training and the company will soon construct the University of Transportation in Katsina state with its launching set to take place next month. In terms of challenges faced in the course of work, Mr Liao disclosed that the Kano – Damaturu to Borno State Road is most challenging due to insecurity is turning rife. Two Chinese officials were killed by terrorists in 2012 and in April this year, CCECC heavy equipment were burnt causing damages. As to what is causing the delay of train coaches, the official stated that it’s as a result of not meeting up with Nigerian specifications.

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The BRI is not just about transport but about investments and businesses. The Train stations built by CCECC is encouraging development in Nigeria. The Chinese company Startimes is an electronics and media company presently in partnership with the Nigeria Television Authority (NTA).

Startimes began work in Nigeria as early as 2009 and is currently involved in the process of the digital migration project. According to the Managing Director, NTA-TV Entreprises, Maxwell Loko, Startimes is here to assist Nigeria with the digital switchover.

In the country previously satellite television was monopolised but today Startimes has made watching satellite television affordable and has gone as far as assisting other television stations on the journey to digitilisation.

NTA is streaming about 8 to 9 channels on the network, all done on the platform of Startimes. According to the director overseas business development department Startimes Group, Joshua Wang, before the arrival of Startimes NTA had a few channels eg hausa but presently there are dubbing of Chinese local content to Nigerian languages.

The Chief Executive Officer (CEO) NTA-STAR TV Network Limited, David Zhang, noted that since 2009, Startimes has invested about 220 million dollars into the Nigerian economy. Digital Terrestial Television also called physical TV, is capital intensive. Startimes trains it’s local staff to improve on local content to meet international standards. Recently eight animation chinese companies arrived in Nigeria to find local partners to work with.

As regards Nigerian content dubbed and shown in China, director Wang noted that Nigeria is lagging behind in its production of movies and has not attained a point where movies are of a globally accepted standard and quality.

Zhang indicated that the company has more than 1000 local staff through direct employment. In terms of indirect the staff is more. The Chinese staff are currently 30.

The Chinese staff can supply technical support but the local staff understand the terrain better and are also useful. Startimes has its headquarters in Kenya for strategic reasons. For example there are several international companies stationed in Nairobi and Kenya’s location is easy for flight purposes out of the continent.

Loko indicates that Kenya scored high in terms of ease of doing business. Secondly the country has the visa on arrival policy which is attractive to business investors and companies who set up in Kenya easily.

“Nigeria must begin to take tourism seriously and look critically at ease of doing business to attract tourism and businesses.

We have to look at our immigration policies. Nigeria ought to attract international business as African hub of doing business.”

On work progress of staff Wang states that the first staff that joined the company freshly had no experience but are now highly skilled with many moving on to the roles of zonal directors across the country.

They started with basic work and now have become directors of geographical zones. Some work 5 to 6 years and others 9 to 10 years. There is growth. The staff are also given opportunities to go to China for training and conferences building a cultural bridge.

According to Startimes Engineer J Adeite Turner, “ We have encouraged local content providers,” adding that Startimes supports employment by working through local dealers too, hereby encouraging indirect employment.

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Startimes remains a public broadcasting station which provides TV to Nigerians at affordable or free rate. Ability to provide compelling content is key in the industry. NTA learned to diversify its content and stream them on a large network.

Startimes is in 1000 villages in each village 20 families can get the decoders for free. Twenty free channels are supplied to institutions as well. The digitalisation process is as a result of the outcome of the Forum On China Africa Cooperation ( FOCAC) in Johannesburg South Africa to digitilise televison in 10,000 villages.

Ten percent of that initiative went to Nigeria. He equally mentioned that the rumours of cultural imperialism brought to bear as a result of the installation of some Chinese channels in the villages, were unfounded and false as there are several local content and few of Chinese content. Besides the locals were at liberty of choosing what they wanted to view. Moreover the content went through NBC and National Security Adviser’s Office. Startimes has furnished about 900 villages. They have also urged the federal government to work on infrastructure in the villages as power source is limited. Business is affected by power challenges faced in the country. With the set up in villages, Startimes aims to bridge the gap of communication between the government and the villages and outside world.

Turner further elaborated that it was lifting the way of living for locals and encouraging development in villages. Over 4 million households in Nigeria have been reached by Startimes, with the low end as majority.

Startimes edge is it’s dual model to support terrestial and satellite television. The Group’s Solar energy systems will be available in the market next month. Meanwhile, Sinoma belongs to the China National Materials Group. Established in 2008 in Nigeria, it’s business partners are ; Dangote; BUA; Lafarge.

The company promises to promote green through its use of environmental friendly materials sourced from Nigeria. The Managing Director, Liu Xingwang disclosed that 6000 tonnes per day is produced for Dangote.

The organisation constructed two main plants in Ogun, and one in Cross River among others. As cement specialists Sinoma signed agreement with Dangote BUA and Lafarge which at the moment supports Nigeria to carry out more of exports than imports of cement. Exports in cement production line in Nigeria is a new market for investment.

The company also has a stone roofing company in Kuje, Abuja with materials that are waterproof, fire proof for production in Nigeria. The company plans to work towards aiding petrol refinery so as to stop import of petrol and encourage export.

In terms of challenges, Nigeria’s infrastructure problems continues to be the bane fighting investments and businesses. Asides infrastructure, the banking sector interest rates are deemed too high. The federal government also needs to focus on industrial production lines and provide conducive working environment.

In terms of employees, Sinoma has about 4000 employees on each of its projects. Most local staff are trained by the company’s Chinese staff who are temporary. On a brighter note, the Managing Director, mentioned that the currency swap between China and Nigeria, the Naira and Reminbi has facilitated business between both countries.

As the BRI continues to reach out to communities and states in the country through investments and people to people exchange, Nigerians at the grassroots level are beginning to feel its impact.

Source: By Bukola Ogunsina

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