With an estimated approximated 203.42 million population and growing at over 2% per annum, Nigeria ranks the seventh-largest country in the world. The nation represents over 70% of the effective West African market, as Nigeria remains the most competitive destination for the establishment of medium and large manufacturing industries.
No wonder, China has since positioned itself to take advantage of this expansive market by unleashing its horde of investors and businessmen on the manufacturing sector. From textile to garment; household appliances, furniture, automobile; consumables and iron and steel as well as Financial Technology (FinTech) products, China has taken over, churning out tons of products for various segments of the market.
Today, the investments of Chinese companies worth over $20 billion and still counting. In a recent interview, the President, China Chambers of Commerce in Nigeria, Ye Shuijin, said, “The 160 Chinese firms operating in the country had also employed over 200,000 Nigerians. I believe the Chinese investment in Nigeria now is about $20billion and we have employed over 200,000 Nigerians. Our workforce is 95% Nigerians.”
Fintech industry has been thriving for a few years, a development that attracted some Chinese firm to Nigeria. Some of them are OPay and PalmPay, just to mention a few.
For instance, when the Country Manager, Opay, Iniabasi Akpan, reeled out the statistics of the company and its subsidiaries at the KPMG’s Digital Summit on November 26, 2019, a lot of the participants were shocked that in less than five years, the company have achieved so much.
He said, “We make $10million/day in transactions through our agents; N5billion+/day in transactions via Opay; 66% market volume of bank transfers, 10,000 riders with Oride, over 100,000 agents, and 125 million Monthly Active Users among others.”
That is not all. A few weeks ago, another Chinese firm, PalmPay launched its product in Lagos. The app is expected not only to reward its users for making payments but will give Nigeria’s excluded population access to secure and easy to use financial services.
At the event, General Manager, TECNO Mobile, Stephen Ha, told Nairametrics that the fintech company is backed by TECNO mobile, which was the lead investor in its $40 million seed round.
He said, “Tecno has helped expand access to smartphones among the Nigerian population. We are now looking to leverage this infrastructure to further improve people’s lives. We see a huge growth opportunity in mobile payments and financial services in the country and are looking forward to working together with the PalmPay team to help shape the future of payments in the nation.”
Several Chinese companies are presently competing with their Nigerian counterparts in the real sector. For instance, Chinese-owned Western Metal Products Company Limited (WEMPCO), a multi-billion naira integrated steel mill, situated at Magboro, on Lagos-Ibadan Expressway, Ogun State, is the first of its kind in Africa. The sprawling steel-manufacturing plant boasts of a production capacity of 700,000 metric tonnes and production machinery of five-stand Tandem Mill.
The factory, according to its Group Managing Director, Mr. Lewis Tung, will produce cold roll steel sheet of up to 0.15mm in thickness and coils of the same dimension and above. Other facilities in the plant include a 52-megawatt generator for power supply; a water treatment and recycling plant; a Ceramic tiles plant; an acid-generating plant; an air purifier and an annealing line.
The Chinese have been visible in the transport sector, especially in rail transport. The $1.49 billion Lagos-Ibadan railway contract has been awarded to China Civil Engineering Construction Corporation (CCECC) and the Olokola Deepwater Port project awarded to the China Ocean Shipping Group. The CCECC is also handling the 27.5-kilometre Marina-Iddo-Okokomaiko, Lagos Light Rail project.
Since 1995, the company has won many of the contracts linked with Nigerian projects, edging out interested companies from the United States and European nations.
The CCECC is involved in multiple projects across the country in about 22 major infrastructural projects over $47 million, comprising the construction of airport terminals, roads and rails including inner-city light rails in Abuja and Lagos, all financed with concessional loans from the Exim Bank of China.
The state-owned Export-Import Bank of China (EXIM Bank) is also providing a $500 million concessionary loan for the 186-kilometre modernisation of the Abuja-Kaduna rail line, which includes the building of 36 bridges and nine fully-developed stations.
In the railway sub-sector, the CCECC was handed a $528 million contract in 1995 to rejuvenate the nation’s stretch of old rail track, supply 50 locomotives, wagons and coaches, install signal system and train Nigerian workers.
Power projects worth $10 billion underway
Chinese firms are involved in three key projects in Nigeria’s power sector estimated at $10 billion. One of the projects, the Mambilla hydroelectric power plant, is for the delivery of a 3,050Megawatt power plant in Taraba State.
The $5.8 billion contract was signed by the FG and the China Gezhouba Group Corporation, Sinohydro Corporation Limited and the CGCOC Group Company Limited in November 2017, about 40 years after the idea was conceived.
The China Exim Bank and other Chinese lenders will provide 85 per cent of the contract sum, while Nigeria pay the 15% balance.
Zungeru hydropower project is a 700MW hydroelectric facility also being developed with the Chinese assistance on the upper and middle reaches of Kaduna River in Niger State. Another power project with funding support from China is the $1 billion Gurara hydropower plant located in Kaduna. It has the capacity to generate 360MW electricity.
$600 million for four international airport terminals
In aviation, the Federal Government entered into a partnership with the Chinese government through the CCECC in 2013 to execute four international airport terminal projects.
The projects were the rehabilitation and construction of airport terminals in Nnamdi Azikiwe International Airport, Abuja, Port Harcourt International Airport, Mallam Aminu Kano International Airport, Kano and the Murtala Muhammed International Airport in Lagos.
The four projects are being funded with a $500 million loan from the Export-Import Bank of China and $100 million counterpart funding from the Federal Government, obtained as a loan from the Debt Management Office at an interest rate of 5.37%.
Scores of Chinese businesses dominate the retail segment of the market in various parts of the country. Brands such as Viju Milk, Big Treat, Infinix, Guangzhou Automobile Group Company (GAC), Huawei, ZTE, Alcatel and others are household names Chinese restaurants, such Golden imperial Chinese Cuisine, Golden Gate, Lagos; Oasis Bakery all in Lagos and several other retail outlets businesses dot the landscape and they are enjoying tremendous patronage.
Despite penetrating several industries and recording countless achievements in Nigeria, the Chinese seem to be unrelenting as they are craving for more investments. There is no stopping the Chinese.