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China’s increased interest in exploiting Africa’s crude oil is provoking criticisms not only from competing Western countries, but also from those who wonder if the exploitation activities of energy-hungry China would bring real fortunes to Africa

It has been reported that Chinese interest in Nigeria’s oil may bring the country fortune. According to Financial Times report, three of the world’s biggest oil companies are poised to pay hundreds of millions of dollars to hold on to prime oil concessions in Nigeria following keen Chinese interest in the planet’s 10th richest crude reserves. ExxonMobil, the largest oil group, is to pay a “signature bonus” of as much as $600 million after securing a new 20-year lease to three blocks it has operated in four decades and which currently produce 580,000 barrels a day. Royal Dutch Shell is close to finalizing similar renewals that might see it surrender some concessions, while Chevron, the second placed US group is yet to agree to a deal even after some of its leases expired at the end of last month. These negotiations would not have come up if the Chinese have not come into the scenario. The struggle between the West and China for our black gold no doubt heralds a new era in the history of resource exploitation in the country. It would be recalled that China National Offshore Oil Corporation (CNOOC), the Chinese state-owned oil company, in June, sought to buy stakes in 23 blocks – including some of those up for renewal – in order to secure as many as one in six of Nigeria’s 36 billion barrels of reserves. CNOOC is willing to pay up to $50 billion for the stakes according to industry sources. Odein Ajumogobia, minister of state for oil, has said the government would be willing to sell part of its holdings in the joint ventures to the Chinese. This is coming on the heels of Nigeria’s urgent need to revive its dying energy sector and fight looming food crisis. Industries and homes across the country generate their own power to stay alive. Poor infrastructure, most of which is represented by the crisis in power supply has led to high cost of production and by extension, the shutting down of many plants. Jintao’s intervention is therefore coming at an opportune time both for Nigeria and China which is pushing to do oil business with Nigeria. However, China is all over Africa doing business, oil business in particular. What these events signify is the increasing economic relationship between China and Africa. It also signifies the changing economic relationships and dynamics around the globe. In addition, it signifies the increasing relevance and the role that natural resources plays and will continue to play in the coming years in the economic landscape around the globe. But the question is being asked if this development is beneficial to Africa? Though Sino-African relations dates back to centuries, Nigeria’s contact with China, unofficially, only began in the 1950s, 1957 to be precise. Chinese relations with Africa were essentially with North Africa. In fact, Nigeria’s contact with the Chinese was through Egypt. It is on record that Chan Hiang-Kang, commercial officer in the Chinese Embassy in Cairo established unofficial trade links with Nigeria, along with Ghana, Ethiopia, Tanganyika (now Tanzania) in 1957. It was a taboo for Nigerians to have anything to do with the communist world which China belonged to. Nigerians like Funmilayo Ransome-Kuti, a frontline Nigerian political and social activist, much to the chagrin of the colonial authorities, visited Berlin and Beijing in the 1950s to attend meetings. Her application for the renewal of her passport was turned down. All contacts with the Eastern bloc countries and China were prohibited and proscribed. All Nigerian students who obtained benevolent scholarships from undisclosed sources and Nigerian trade union leaders who attended international conferences in those countries had to be smuggled out of Nigeria through Ghana. But this position was reversed in 1958 by the Nigeria Prime Minister, Tafawa Balewa in a policy statement in parliament. In 1971, Nigeria/China mutually friendly disposition blossomed into the establishment of relations at ambassadorial level. Thus a mutually and reinforcing and rewarding relationship between both countries began in earnest. Fang Yi, former Chinese Minister of Foreign Trade and Economic Cooperation, visited Nigeria in 1972, a visit that provided an opportunity for signing the first economic, scientific and technical cooperation agreement as well as a trade agreement. There were several other visits to Nigeria, including that of a team of Chinese engineers from China Civil Engineering Construction Corporation (CCECC) in 1996 for on the spot assessment of the Nigeria Railway Project. This is aside from relations that had to do with agriculture – irrigated rice plantations in Itoikin, Lagos, water resources in Borno State and Nigeria’s NEPA in the 1990s. The Chinese also had something to do with troubled Ajaokuta Steel project and Delta Steel project Aladja – Chinese experts inspected these projects and the enabling agreement was signed on May 12, 1997 during the visit of Li Peng, former Premier of the state Council but the project was plunged in the mire by alleged corruption scam in which late Sani Abacha, some of his family members, Anthony Ani, former Minister of Finance and Bashir Dalhatu, former Power and Steel Minister, were involved. Discussion between Nigeria and China on the rehabilitation of the Nigerian Railways commenced during the Murtala Muhammed/Obasanjo regime of 1975-1979 when deliberate efforts were made to deepen relations between Nigeria and China. The Chinese side was enthusiastic to complete the job having just completed the TANZAM Railway project in East Africa. But subsequent discussions failed because of the alleged greed on the part of some Nigeria leaders. It is remarkable that China’s ambitious strategy for Africa is driven mainly by China’s energy hungry economy. The current economic expansion in China requires natural resources that Africa has in abundance. So, for the Chinese, the aim of the expanding economic links is very clear. In turn, Africa has benefited in the form of increases in natural resource prices such as oil, gold, bauxite, diamond, granite etc. This has contributed to significant economic expansion in Africa in the last seven years. For instance, trade between China and the African continent was valued at US $55.5 billion in 2006, or annual growth of 30 per cent for the fifth consecutive year. In the period, China exported goods to African countries to the total value of US $ 26.7 billion, which was a year on year rise of 43 per cent, and imported US $ 28.8 billion worth of goods, or a 37 per cent year on year rise. China is now Africa’s third largest trading partner after the United States and France, overtaking the United Kingdom. Through trade, China has definitely contributed to the recent economic growth in Africa. However, political and economic analysts on the issue are watching with keen interest on what this means for the two way relationship between Africa on one side and Europe and America on the other. China’s trade with Africa provided another channel for Africa natural resource exports than the exclusive Europe and North America route that existed before the emergence of China as a big player in global market for natural resources. It is certain that the increasing demand and competition provided by China for Africa’s natural resources pushed up natural resource prices in the last few years.