Mr. Festus Mbisiogu is the Chairman/CEO of Blue Diamond Logistics, China. In this interview he speaks on how best the trade between Nigeria and China can be balanced. He also spoke on other issues beneficial to the bilateral relations between both countries. Mbisiogu spoke to NNEKA NWANERI in Guangzhou, China on trade relations between the two countries and how Nigeria can have trade balance with China. Excerpts:
Population of Nigerians in China
Eighty percent of the Africans in China live in Gungzhou and statistics have shown that Nigerians in Gunagdon Province contributes about 20 percent to the economy. Statistics too shows that 10-20million dollars comes in from Nigeria into Tanishilo market on a daily basis. Because the Igbo people in China are gurus with business so the Chinese are getting closer to us to use us to know our modus operandi so that they can take the trade from us. These Igbos contribute a lot to their economy, yet, are not recognised. It almost feels like being used and dumped. Before, we were like sheep without shepherd, but with the Nigerian consular office here, things are getting better.
Also, there is a stereotype that the there are no good people here, especially because some Nigerians are committing one form of offence or the other so they are denying us benefits accruing to us. But my argument with them is that since it is on record that Igbos here contribute to the economy, they should be given a special status. Prediction has it that in the next 10 years too, 20 percent of Chinese people will be billionaires in the world, which are 450 million people.
China as home of substandard goods
Just with a sample, they can produce anything in the world after looking at it. They are too creative. No Nigerian that wants his name to fly would like to mess it up. Some of the problem we have is when an order is placed to Chinese; we go without any knowledge of what they are producing. Most of the substandard goods imported are not the fault of the importers or sellers. We have no knowledge of how it is produced. Even at that, when the goods arrive, we can’t send it back. So Festus Odimegwu deserves praise for carrying out factory tour on some products before shipment. Both Standards Organisation of Nigeria (SON) and National Agency for Food and Drug Administration and Control (NAFDAC) do pre-inspection before shipment. I recalled that when former President Goodluck Jonathan visited China some years ago to know investors, so many memoranda of understandings were signed especially on power, agriculture, mining and some major constructions like airports, etc. There was no follow-up. This has been the major challenge. I have witnessed several MoUs signed between the Nigerian government and Chinese government. I have been involved in some of these investments but there have been no follow-ups afterwards.
Justification for non implementation of MoUs
Some of the Chinese investors going to Nigeria are not doing the country so much good because there is no conducive environment for them to go into areas we want them to. Areas like industrialising the nation, in Greenfield investment where they bring their own plant, install it on Nigerian land and employ people, train them up and that will allow for transfer of skills and technology. In this area, it is zero balance.
The only thing Chinese are doing is majorly on roads and airport construction. 90 percent of road contracts go to Chinese companies. The remaining 10 percent goes to indigenes. These foreigners come to the country with portfolios and are back to China with billions of dollars. I’m not so comfortable with that and it gives me great concern. An analysis shows that if a unit cost of item produced in Nigeria is N1000, it will be N800 in Ghana and N600 in China all because of unavailability of steady power supply.
Why buying from China is better than producing from Nigeria?
After an extensive market research, I found that it is better I buy products from China than produce in Nigeria. The cost analysis shows that it is one digit interest rate and other incentives such as 10 percent rebate on every export. There are other incentives that make them conquer the world including giving you accessibility to factories and other supports in its fullness. I have lived here for 13 years and I have seen that there is no magic to their booming economy.
Daily, I ship loads of containers of goods daily and we private businessmen find it difficult to woo them into the country because of underlying factors. Only few have succeeded so far. The rate at which they are growing, a city here can give Nigeria light within six months. But I still don’t know why the federal government is not thinking in this positive direction.
Way forward
The only way we can have a win-win approach between the two nations is when we allow the Chinese to grab the money but we should have the skills and technology. They too haven’t taught in this direction due to Nigeria’s unsteady power supply. The environment is harsh and the north is no go area because of insecurity. Thus, they venture into construction. Nigerians can hire them as expatriates so that they can train us.
No wise investor would like to invest in a country where there is no steady power supply because 80 percent of profit in companies goes to power. When the Nigeria Governors Forum came here, I made them know that 80 percent of what the world uses is from China. They are going fast and will soon take over the world. There are a lot we need to learn from them. I made them understand that they should focus on industrialising states by identifying potential business men and women and try to create an industrial zone, loan money to them and order them to get the needed machinery.
Furniture and fruit juices are from China. So many things used in Nigeria are from China, including toothpick. I am a shipper here and I know these things first hand. Why can’t they think in such direction by mapping out particular money and share processing plants among states?
For example, Benue State can go into cassava and soy beans processing, do the processing line and then get Chinese to work on it through private partnership. From there, the country will have enough to feed from and still export to other parts of the world.
This way, no state in Nigeria will be unable to pay salaries instead of waiting for federal allocation. It beats me that each time government is in China; their only focus is on construction. Nobody talks about industrialisation.
We should also talk of transfer of skill and technology, else, we gain nothing from them and that win-win approach becomes a futile mission. No one should take advantage of our inability to think beyond the areas they are playing on.
Even when foreign investors bring money into Nigeria, they demand for Sovereign guarantee and this, government does not have. They have seen that without this, it won’t be possible to finance projects, thus, they switched to construction.
That explains why bids tendered are always won by Chinese. No local construction company ever gets contracts when Chinese are bidding alongside with them. This too is a problem. I have seen that the relationship between our both countries is not balanced and as the only Nigerian representative of the One Belt one Road initiative so I stand to tell you beyond reasonable doubt that that is one solution Nigeria needs to come out our economic woes.
To have partnership with any investor, they need partner with me in a conducive environment. I run an NGO on steady power supply. If we fix power, we don’t need advertise to investors to come because we have the man power and human resources as the largest population in Africa. My having lured 21 governors to China is a welcome development. For the past five years, I have been working with the consulate in Beijing to ensure that a consulate is in Guangzhou because it is the commercial city and can’t be toyed with in the world. They are the number one in the world for building materials. Every province here has been mandate by their government to be number one in a specific area of specialisation
My advice to government is that they take home the need to target on Greenfield investment and transfer plants from china to Nigeria thereby creating jobs, reduce unemployment and transfer of skill and technology, not only construction. Government can also suggest a 50-50 win whereby Nigerians provide land, 30 percent capital and workers while the expatriates come and team up with us. That way, we will get it. Also, each region should have a product. Imagine how much we would realise from exporting our cassava processing.
A major production line in each state would mean a big boost for the country. The visiting forum has opened their eyes to a lot of things. Like Abia State government that is partnering with Chinese shoe and textile factories. That too is a welcome development because many any of them were amazed at the level of development in China. Now they are thinking of a long term benefit of the visit.
Challenges of investors in Nigeria
Investors contend with a number of challenges such as high interest rate, epileptic power supply and lack of sovereign guarantee.
Why Nigeria was left out of the list of countries for the One Road One Belt initiative
It was discovered during the Jonathan regime that Nigeria was left out of the $61bn the Chinese government is putting into Africa. But having discovered it, they are working on modalities to include Nigeria. African countries should try to know why China is supporting Africa. They see more than us. They are trying to penetrate the African region and are doing that already to get businesses. It is a good one but my concern is how we can grab from whatever they are doing for the development of our country.
10-15 years ago, they had 230 million people living below the poverty line but in the last 10 years, they have 23million and are working towards getting to zero in the next 10 years. China is doing a good job by supporting Africa but I really want Nigerian government to look inward and utilise resources that are coming in for industrialisation. Once there can’t be taken away. By that, jobs are created and technology spreads. That is the essence of cooperation.
How to have trade balance
The only thing Nigeria exports to China are wood and mahogany, which is a major market for them. They use it and sell back to us. Oil too is another product exported to China. We should export a lot to be able to export so that the country can generate money. It can only be done through industrialisation and employment that takes the youth off the streets. For the South western states close to the seaport and Lagos can concentrate on building materials and furniture so they can export through the seaports. Let them not focus on agriculture. It is on record that 102 containers of metro tiles go into Nigeria from China monthly.
