Fresh scramble for Africa: How China, migration fears drew Europe, US to Nigeria

Following China’s almost complete takeover of investment opportunities in Africa, major European nations; France, the United Kingdom (UK) and Germany, including the United States of America are now in the last-minute rush to forge new alliances with Nigeria and other African countries.

At the last count, three European super powers have visited Aso Rock in search of new economic alliances in the face of China overbearing presence in Africa’s real economy.

Although French President Emmanuel Macron, was in Nigeria in July, it was perhaps Theresa May, the British Prime Minister, that let the cat out of the bag when last week in Abuja, during her visit to Nigeria as part of her three African countries tour, she reinforced the primacy of courting new business partners in Africa with the exit of the UK from the European Union. As Africa’s largest economy and market, Nigeria fits into its erstwhile colonial masters new gambit.

“We are ready to cooperate together on global and regional issues; to strengthen that cooperation and partnership, I have with me a business delegation, as we look to enhance our ties in future and explore more trading opportunities.

“We will also be looking to work together to step up efforts against security threats from Boko Haram, human trafficking and the likes.

“And, of course, also cooperate to fight corruption and lifting people out of poverty. I am pleased that as far as our partnership is working, we are doing well in Nigeria. We look forward to enhancing this relationship in future,” she said.

To set the ball rolling for the new partnership, the UK Government announced a £70 million programme expected to create over 100,000 jobs in Nigeria, according to its Minister of State for Africa, Harriett Baldwin.

Baldwin who led a business delegation to the event, said that the programme would raise the income of three million people from the poorest parts of Nigeria.

The UK pledge was after French president, Emmanuel Macron, announced an investment of N500 billion to promote innovation in African private sector across countries.

According to him, France was making the investment in order to build strong private sector to ensure success of African entrepreneurs.

“We need to provide this new narrative, we need more Africans to succeed in Africa and more Europeans to have a positive view about Africa”, he added.

But the question agitating most minds at the moment is why is another scramble for Africa is just starting afresh.

However, some diplomatic experts have argued that the new-found love might not be unconnected with the migration crisis , that has hit Europe hard in recent times.

For instance Macron had, during his visit, admitted that it created a lot of tension which nobody could describe.

Hear him: “When you speak about migration, I don’t mince my words. First we speak about people; people going through a lot of places, through the desert or through the Mediterranean Sea, losing some lives, due to political situations, spending months or not to say years in camps, being exploited by their keepers. But we have distinctions. Some of these people are eligible to residing because they are in war in their countries. And they are at risk because of their political ideas or because of their religion. And these ones have to be protected in Europe because it is part of my constitution in France. So no question, these people would always be welcome and protected because of the asylum laws. And on the other hand, there are lots of people leaving their countries, and taking all sorts of risks, for economic reasons because of lack of economic perspectives and opportunities. And these people cannot be accepted at least all of them , even some of them where it is sustainable for their economy or for their countries.You cannot be protected because you come from a country in peace.

Migration has often been linked with the level of poverty on the continent. Thus as also alleged to by Theresa May during her last week’s tour.

Speaking in Cape Town, South Africa, the Prime Minister said Africa has the highest number of poor people in the world, and that 87 million Nigerians are living below the poverty line of $1 and 90 cents per day.

Her words: “Much of Nigeria is thriving, with many individuals enjoying the fruits of a resurgent economy, yet 87 million Nigerians live below $1 and 90 cents a day, making it home to more very poor people than any other nation in the world,” Prime Minister May said.

She explained that Africa needs to create 50,000 new jobs per day to keep employment rate at its current levels till 2035.

She expressed her optimism of seeing the UK become the biggest G-7 investor in Africa by 2022, building around shared prosperity and shared security, adding that a healthy African economy is good news for the UK.

“Our aid programme must work for us’. I am unashamed about the need to ensure that our aid programme works for the UK today, I am committing that our development spending will not only combat extreme poverty, but at the same time tackle global challenges and support our own national interest.

“It is in the world’s interest to see that those jobs are created to tackle the causes and symptoms of extremism and instability, to deal with migration flows and to encourage clean growth.”

This was as latest statistical study revealed that seven Nigerians are said to be descending into extreme poverty every minute.

The third reason advanced as possible reason European countries’ latest new “ missionary journey” could also be the alarming rate of Chinese government’s investment in Africa.

Available records however show that the Chinese government has pumped billions of dollars into infrastructure projects across the continent, although critics have argued there was often little gains for local economies because Chinese firms and nationals build the roads and rails and also supply raw materials and equipment.

This coming as the US government recently warned Nigeria and other African countries to be wary of Chinese loans.

According to its immediate past Secretary of State, Rex Tillerson, China “encouraged dependency, utilised corrupt deals and endangered Africa’s natural resources.”

He added: “We are not in any way attempting to keep Chinese ‘dollars’ from Africa,” he said, “(but) it is important that African countries carefully consider the terms of those agreements and not forfeit their sovereignty.”

Tillerson said Chinese investments “do not bring significant job creation locally” and criticised how the country structures loans to African governments, saying if a government accepts a Chinese loan and “gets into trouble,” it can “lose control of its own infrastructure or its own resources through default.”

But as part of its foray into Africa, China is providing a $500million credit facility for the construction of new terminals at the Lagos, Abuja, Enugu, and Kano airports. The airport projects undertaken under a 20-year Built Operate and Transfer (BOT) concession by China Civil Engineering Construction Corporation, (CCECC) is not only creating jobs for Nigerians, but also ensures that China benefits in the long run given the 3 per cent interest rate attached to the loan. Nigeria’s effort to float a national carrier is also attracting foreign interest from Europe and Middle-East carriers.

The Nigerian aviation sector has over the years seen more foreign interest dominate its affairs, particularly in the airline industry where the absence of a national carrier has translated into the non-reciprocity of over 70 Bilateral Air Service Agreements (BASA) with foreign countries. It is an ugly trend that has left Nigeria’s sky open to foreign airlines like British Airways, Virgin Atlantic, Emirates, South African Airways, Air France/KLM, Lufthansa, and Ethiopian Airlines, among others, to enjoy multiple-route flight designations from Nigeria’s international airports.

Commenting on this newly fond romance, the Managing Director of Financial Derivatives Limited, Mr. Bismarck Rewane, said the new scramble for Africa should not be seen as a threat to African economies or markets, but rather a win-win situation for everyone.

He explained that a country like China has invested heavily in Nigeria and is expected that it would naturally want to expand its markets.

‘‘If you have to look at the global context in dealing with this subject matter, you would realise that there are tariff wars which are giving way to multilateral deals, which also involve the United States. Unfortunately, Africa is not involved in any of these trade wars. So naturally, Africa would be the ‘bride’ in this instance for raw materials and markets.”

Again, he said, “if we are to examine growth, Africa’s purchasing power is increasing and therefore these countries are wooing Africa as market. And more important is the opportunity for investments,” he said, adding that African countries are more reliable and reform-oriented, and more likely to honour their obligations.

‘‘So what is China doing? China is selling goods to Nigeria, investing in Nigeria and trading with Nigeria. So Africa is a very important ally. So don’t let us look at it as if it’s a newly discovered approach. It is the most important development at this time because there is competition. They are cooperating and competing with one another. And by this, I mean the United States, China and Europeans are cooperating and competing against each other.”

Using Nigeria as a case study, he said, “we have a market where they buy finished goods and we have a country that wants to invest in infrastructure and needs to borrow money, while on the other hand, there is a country that has raw materials they can buy from leading to a three dimensional economic puzzle that is being sought by this new scramble for Africa.”

As per the notion that this new scramble for Africa may lead to dumping, Rewane maintained that there is no such thing as that because markets are so efficient these days, stating that even if a country dumps, somebody is losing and paying for it because it is being subsidised either by the government or taxpayers, which invariably means that the product would be sold below the cost price.

‘‘In this instance, you cannot use the 19th century economic clichés like dumping and industry protection to relate with 21st century economic realities. That won’t be valid in 2018,’’ he affirmed.


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