What China's new silk road means for Nigeria - Supply Management
Will three planned railways raise the profile of public transport in Nigeria? © SIPA USA/PA Images
Will three planned railways raise the profile of public transport in Nigeria? © SIPA USA/PA Images

What China's new silk road means for Nigeria

14 December 2017

Margaret Thatcher was severely criticised for declaring that anyone over the age of 30 who travelled on the bus was a failure. Yet that attitude is widely held in Nigeria, where public transport is still perceived as being, as one manager put it, “for the lower classes”.

That stereotype is being challenged by a plush new rail service from the capital Ajuba to the northern city of Kaduna. The new £1bn commuter service was built with Chinese money as part of its One Belt and One Road (OBOR) initiative, known more colloquially as the new silk road.

The original silk road was not one route but a network of them that (mainly) connected east and west. From the second century BC to the 14th century AD, this network facilitated a flourishing trade in silk, horses, gold, gunpowder and gods (Buddhism, Christianity and Islam). Yet, as Paul Salopek wrote in National Geographic, this silk road was “not a camel rut worn in a steppe. It was an idea: the prototype for globalisation. Silk was only its brand.”

If China’s new silk road had a brand it would be a piece of infrastructure – a bridge, railway line, airport or sports stadium. OBOR is intended to reach parts of the world its exotic predecessor didn’t reach. Covering land and sea, extending far beyond Europe and Asia, this trade network could rescue globalisation in its hour of need – or, at the very least, redefine it.

In Africa, where China is investing $52bn in 10 major infrastructure projects, the vision is to create ‘silk roads’ that stimulate trade by connecting Senegal on the west coast to Sudan on the east coast and strengthening links between Nigeria and Ethiopia, two of the continent’s most powerful economies.

The fine details – how this is to be done, by when and, crucially, who pays for it – remain unclear. Yet OBOR is already redesigning the global economy: China’s trade with Africa has doubled in the past five years – and could double again in the next five.

Chinese president Xi Jinping has taken a personal interest in Nigeria, Africa’s second largest economy – and largest energy producer.  In April 2016, at a summit in Beijing, he promised Nigerian president Muhammadu Buhari a $6bn infrastructure loan, an $80bn investment in oil and gas, and a $15m grant to stimulate innovation in agriculture.

China’s largesse will improve the daily lives of millions of Nigerians if, invested and managed properly, it modernises a railway system that had been neglected for decades. The heart of this programme is to build three major railway lines – starting with that route from Abuja to Kaduna, which opened in July 2016.

Work has begun on the second line – a 90-mile route between Lagos and Ibadan, the country’s third largest city. The third railway – connecting the southern oil hub of Port Harcourt to Kano in the north – is the riskiest, running through a region controlled by Boko Haram, the Sunni group seeking to create its own Islamic state.

To help Nigeria upgrade its infrastructure, China loans money on advantageous terms – historically, it has charged interest of around 1.5%, much lower than typical commercial rates of around 5% – and, in return, Chinese companies win the bulk of the construction contracts. That said, American corporate behemoth GE is leading one consortium tasked with improving the nation’s infrastructure.

Such arrangements are essential if Nigeria is to achieve its goals. The publicly expressed aim to become a middle income country by 2020 would, the World Bank estimates, require an annual investment in infrastructure of $14bn – 12% of the country’s GDP. The final bill for the three new railways will be at least $25.6bn.

Rotimi Amaechi, the minister of transport, says the country’s poor transportation network is making goods and services more expensive. Nigeria spends around $90bn a year importing food – better infrastructure could cut that bill substantially. 

In Lagos, a city with a population of 21m, where a typical daily commute can last 3hr 55mins, local estate agents have compiled a revealing list of the causes of congestion: “Pot holes/bad roads, trading activities, on-street parking, loading and discharging of passengers, illegal bus stops, flooding/poor drainage, vehicle breakdown, narrow roads, religious activities, high volume of traffic, lack of parking and lack of traffic lights at some intersections.”

Collectively, the three new railway lines are designed to integrate a nation that has been divided, economically, geographically and socially. The greatest rift – between Biafra in the southeast and Nigeria – ignited a brutal civil war in 1966. Regional resentments linger on – many Igbo people in the south believe they don’t get a fair share of the wealth generated by local oil and gas fields.

Since 2013, the turmoil in northeast Nigeria, fuelled by Boko Haram, has displaced 2.3m people. The third – and final – route, intended to link the southern oil hub of Port Harcourt to Maiduguri, a Boko Haram stronghold in the northeast, cannot be completed until some kind of peace has been restored there.

Having been promised such improvements so often, many Nigerians are sceptical about the latest plans. Corruption is still rife – the UK’s Department for International Development (DFID) estimates that the country lost $32bn to fraud during the six-year presidency of Jonathan Goodluck.

Buhari has vowed to fight graft but critics remain unconvinced. Catholic bishop Matthew Hassan Kukah said: “Buhari was not brought into power by angels. We know the nature of the vehicle that would bring anybody to the presidency of Nigeria.”

That said, the government has made progress. The Bureau of Public Procurement has identified 50,000 ghost contractors on its system. Mamman Ahmadu, director of the BPP, says the agency could go further if it had the resources to set up an e-procurement system for all public sector contracts.

Yet under Xi Jinping, who is waging his own war on corruption, Chinese officials have tended to set much stricter terms for its overseas development loans, demanding proof that the money is being well spent. Buhari and his colleagues will have been warned that the Chinese leader is not investing billions to build a silk road to nowhere.

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