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The Downside Of Chinese Investment In Nigeria

Across Africa’s populous nation; Nigeria, low-cost Chinese goods are everywhere, evidence of Beijing’s growing dominance in global trade. The trade flow has helped keep life affordable for millions of Nigerian families, at a time when the country is struggling with economic stagnation and plunging prices, as well as the deadly costs of the Boko Haram insurgency.

But shoddy or counterfeit products are a national problem in Nigeria, Africa’s largest economy, where impoverished consumers have few alternatives. Some shoddy goods are benign, like the Chinese-made shirts, trousers and dresses with uneven stitching and stray threads that fill street markets. But electrical wiring, outlets and power strips from China, ubiquitous in new homes and offices, are connected to dozens of fires a year in Lagos alone.


The relationship between China and Nigeria is a complex web of dependency, one replicated in dozens of developing countries around the world, like Chile, Ethiopia and Indonesia. Such ties are integral to China’s global ambitions. President Xi Jinping of China, who was in Africa this week emphasizing economic diplomacy, just committed $60 billion in development assistance to the Continent.


But such efforts also pose new and unpredictable challenges for Beijing. China has lent heavily to commodity-exporting countries, which are now struggling with low commodity prices. At the same time, China’s highly competitive manufacturing sector has devastated many smaller-scale rivals across Africa, Asia and Latin America. Mr. Xi’s pledge in Africa, in part, seemed aimed at quelling criticism over what some see as a lopsided relationship that largely benefits China.

To support its swelling trade in Nigeria, China is funneling billions of dollars to build roads, rail lines, airport terminals, power plants and other desperately needed infrastructure. China is the top lender to Nigeria, where political instability and violence have made Western interests skittish.

Nigeria, in turn, has become the biggest overseas customer of Chinese construction companies. It is an important market for Beijing, at a time when China’s own growth is slowing.

But China’s extensive reach is now meeting resistance in Nigeria, part of the broader risks for Beijing’s global strategy.


In Abuja, the capital, the new government is conducting anti-corruption investigations into large Chinese construction contracts signed by the previous leadership. Nigerian state governments are struggling to pay for many of those projects, exposing China to potentially heavy losses.

In Kano, angry protesters in the streets blame widespread joblessness on China, which is manufacturing African fabric designs in shimmering hues more cheaply than Nigeria. Employment in Nigeria’s textile and apparel sector has plummeted to 20,000 people, from 600,000 two decades ago.

In Lagos, authorities are trying to stamp out subpar Chinese electric goods. Imported power strips and wiring have inadequate copper to handle Nigeria’s 240-volt system, said Wanza Kussiy, the chief safety officer of the Nigerian government’s Standards Organization.

Zhang Sen, the vice secretary general of China’s government-controlled Electronic Product Association, said that the group was reviewing Nigeria’s fires. “We still need to do some research before we can say the quality of the Chinese products is to blame,” he said.

Nigerian authorities are stymied. Corruption is endemic, making it more difficult to enforce safety standards. And Chinese goods are so dominant that consumer have few other choices. Source: NY Times

Read the full story here: NY Times

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