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China continues to invest billions into Nigerian economy
Despite the continued violence in oil-rich Nigeria, China has increased its investment into the West African nation by $3 billion over the past three years, Chinese officials have said. And while many foreign investors have scaled back their operations amid kidnappings and militant attacks on oil installations, companies like China’s staterun CNOOC have invested $2.3 billion in Nigerian offshore oil and gas fields.
Other major agreements included the 2004 deal which will allow China to explore two sites in the Niger Delta, where most of Nigeria’s production takes place. The region is also the scene of many of the militant attacks in recent months.
During his farewell tour of the country, outgoing Chinese ambassador to Nigeria, Wang
Yongqiu, said that over the past three years, China and Nigeria have 'enhanced relations' and improved their 'strategic partnership.'
The trouble in Nigeria has come because militant groups are claiming that residents of the
Niger Delta should receive a greater portion of the oil wealth being reaped by the government and the foreign companies operating there. One in such group, The Movement for the Emancipation of the Niger Delta, (or MEND) has said that it will step up attacks on oil installations.
MEND, who also serve as an umbrella organisation for a number of other rebel groups in the Delta, said that in 'a worstcase scenario' the increasing violence could lead to a one to two year shutdown of the oil industry in the Delta,' where most of Nigeria’s 2.3 million daily barrels of crude oil originates.
Hoping to find ways to thwart militancy in the Delta, Nigeria has looked to China as a potential arms supplier, a role Beijing has played in several other African nations.
'Selling arms to African countries helps China cement relationships with African leaders
and helps offset the costs of buying oil from them,' said a recent report by the New Yorkbased Council on Foreign Relations.
But while increased firepower may be the government’s solution for countering militancy, UN officials recommend greater oilrevenue sharing for the Niger Delta residents as a means of quelling the violence. According to a UN Development Fund report in July, Nigeria’s producing states receive just 13% of the revenue from the sale of oil.
In a country where the vast majority of the 130 million people live in poverty, the extremely small share of oil profits for the producing regions has prompted the rise of a militant movement. Instead of 13 percent, militants are demanding at least 50 percent of the revenue go toward social, health and infrastructure in the region.
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