Nigeria’s Jonathan Seeks Infrastructure Funds From China

Nigeria's President Goodluck Jonathan
Goodluck Jonathan, president of Nigeria. Photographer: Simon Dawson/Bloomberg

Nigerian President Goodluck Jonathan will take state governors and key ministers to China on his first state visit next week, seeking to strengthen ties with the Asian nation in everything from power production to bond buying.

The leader of Africa’s biggest oil producer will hold talks with President Xi Jinping and officials from Huawei Technologies Co., ZTE Corp., and China Petroleum & Chemical Corp. during a five-day trip starting on July 9, the Abuja-based presidency said in an e-mailed statement. Jonathan is traveling with a delegation of state governors, lawmakers, and 15 cabinet members including Finance Minister Ngozi Okonjo-Iweala, Trade and Investment Minister Olusegun Aganga, Petroleum Minister Diezani Alison-Madueke and Agriculture Minister Akinwunmi Adesina.

“We’re not just going there to seek loans, we want investments,” Okonjo-Iweala said in a July 3 interview in Abuja, the capital. “We also want China to invest more in Nigeria.”

Trade between Nigeria and China reached $13 billion by the end of last year from $2 billion in 2005, Aganga said in an interview on July 3. At least 250 Chinese companies and investors will attend a July 11 forum with Nigerian counterparts during the trip where “matchmaking” for potential partnerships will be made, he said.

Bond Market

Agreements on defence, economic and technical cooperation, and visa exemption for holders of diplomatic and official passports will be made, according to the government. A $1.29 billion-loan deal for the construction of four airport terminals and a 700-megawatt hydropower station will be signed with the Export-Import Bank of China.

Officials will also discuss “an agreement for the Central Bank of Nigeria to invest in China’s interbank bond market through the People’s Bank of China,” according to the statement from the presidency.

“This is the largest country in Africa and the largest country in Asia coming together,” Aganga said. “That sends a powerful message to the rest of the world.”

The Asian nation continues to increase its presence in Africa’s most populous nation of more than 160 million people, operating in industries including oil and gas and communications.

Flexible Terms

China’s ability to finance infrastructure projects in Africa at preferential rates and with flexible terms is an important factor considered by governments, Samir Gadio, a London-based emerging-markets strategist at Standard Bank Group Ltd., said today in e-mailed comments. “That said, China’s direct investment in Nigeria has yet to pick up qualitatively.”

Companies such as China Civil Engineering Construction Corp. and Sinohydro Corp. are helping to build hundreds of miles of double carriage railway lines, roads, airport terminals, and hydropower plants as Jonathan’s administration tries to improve infrastructure to spur business. The projects are partly financed with loans from China’s Exim Bank.

“Our objective is to get them to increase trade, get them to increase investment in Nigeria, and get a strategic long-term relationship,” Okonjo-Iweala said.

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