On Monday the European Union ambassadors in Nigeria met with the leadership of the Nigerian National Petroleum Company Limited (NNPC) to seek or perhaps strengthen a partnership with Nigeria.
The reason for this is of course obvious. Nigeria exports some 40% of its oil and gas products, especially Liquefied Natural Gas (LNG) to Europe and imports most of its refined petroleum products from the bloc.
Interestingly, based on the most recent data from the National Bureau of Statistics, five of the top 10 export destinations for Nigerian products are European countries: Spain, Italy, France, Netherland and Portugal in that order. However, the table is completely different on imports, as about one-third of Nigeria’s import comes from China.
Indeed, many pundits think there are lots of underground and/or under-reported imports from China, and some say if the official data is adjusted for such, it may be correct to say half of Nigeria’s imports is from China.
That’s a staggering figure and of course, this can be backed by the reality in our households, offices, and indeed on the streets. From Abia to Lagos and to Zamfara, when you look around your daily consumption, you really cannot deny the heavy presence of Chinese products in our daily lives.
In fact, beyond the imports, some of our strategic assets are either now being owned or managed by the Chinese, who dispense such to us at their “will” for no fault of theirs; after all, he who pays the piper dictates the tune.
While these facts may be obvious to our policymakers and perhaps everyone on the street, I am not sure there are measures in place to manage the risk, if at all our government considers this high dependence on a trading partner as a major risk.
Indeed, China does not need to set up camp in any of our neighbours to shoot a missile into Nigeria, if we go against its wish. We are already a captured specie, and China knows quite well that we neither have nor plan to have alternatives or mitigants to our dependence on its products.
All that China needs to do to whip us into order, if we attempt to disobey its instruction, is to stop trade, especially exports, with Nigeria. The question is, how long can Nigerians survive without Chinese products, which have become major parts of our daily lives? Perhaps it would take only a couple of weeks or even days after stores run out of inventory before Nigerians go on a rampage similar to EndSARS protests.
It would really be chaotic if China stops exporting to Nigeria and that tells volumes of our vulnerability to China and its policies, and of course, it tells us how vulnerable our perceived sovereignty can be, due to our weak economic policies and actions.
It is evidence of how foreign interference can distort the political and economic structures of a dependent country. Although not confirmed, there are claims of foreign interference in the recent ousting of the Pakistani Prime Minister, Imran Khan.
Indeed, sometimes, when a country is thrown into chaos by a foreign power, it is not for the love of the people of that dependent country; rather it is usually in pursuit of the interest of the foreign power.
Why am I suddenly stating what may seem to be obvious and understood by our policymakers? It is because this may be a good time for our government and perhaps all of us to take lessons from the Russia-Ukraine war.
The visit of the EU Ambassadors to NNPC is because they are seeking to diversify their oil and gas reliance on Russia out of concern of reciprocal action from Russia. Having executed a number of sanctions on Russia to influence or force a change in Moscow’s stance on Ukraine, either through a public revolt or precautionary policy review by Putin, Europe is seeking to review its oil and gas dependency on Russia.
For instance, while the likes of Romania and Serbia or other smaller EU countries can afford to survive without Russia’s oil and gas, Germany and bigger EU countries may struggle to neglect Russia at least at this time.
Russia’s threat to receive its payment for gas supplies to the EU countries in rubbles, in an attempt to stem the steep depreciation of its currency and ameliorate the impact of US and EU sanctions, is being resisted.
But the EU countries know Putin is only buying time to take a firm stance, thus the EU, especially Germany, cannot ignore the risk of its actions.
This is obvious in the stance of the German government to tread carefully in motions aimed at increasing the number of sanctions on Russia over the past two weeks, as Russia may fire back at the EU with its own economic missiles, mainly in the form of oil, gas and agricultural exports to the EU.
Indeed, beyond oil and gas, Russia supplies fertiliser, wheat, and other agro-based staples to the EU, the impulse of which cannot be neglected if Russia takes a new stance.
No doubt, the alternatives for the EU are slim and expensive, given the proximity of Russia and the competitive trade agreements of the EU with Russia, a trade arrangement which some pundits say is a way of Russia subsidising consumption in Europe and if truncated may trigger food and energy inflation in the already fragile EU countries.
Interestingly, despite the range of sanctions, Russia and indeed Russians are coping with the situation and increasingly building internal supply structures to reinforce their independence and self-sufficiency, in addition to increasing its trade partnership with China and other allies or neutral trade partners.
Can Nigeria survive a Chinese sanction and how fast can Nigeria restructure imports away from China to preserve, if not regain, its economic and perhaps social and political sovereignty? Make no mistake in thinking that the trade equation is both ways.
It is not. China is not one of the top 10 importers from Nigeria and more so whilst the value of Chinese exports to Nigeria is significant to us, it is less than one per cent of the total Chinese exports, so Beijing would not think twice in shutting the door and destabilising the country if ever Nigeria attempts to rebel its position and policies, whether for good or otherwise of Nigerians.
I believe the Ministry of Foreign Affairs is aware of the hot potatoes in our hands and hopefully would work with other relevant MDAs in diversifying our trade relations, with the objective of reducing dependency on a country at the expense of saliently losing our sovereignty.
I hope this would not be like our age-long recurring wish of diversifying the economy away from oil exports and revenue, as I hope decisive and diplomatic actions would be taken, if not already in the works, to preserve our independence.
After all, economic colonialism is the order of the day and it starts with issues of trade symmetry and over-dependency. While the political elite may be profiting from the current lopsided trade with China and of course we can advance one thousand and one reasons why we should sustain, if not deepen the relations, we also must mitigate the risks, before they destabilise us and consumes our freedom!
Daily Trust
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