China has once again made a deal with Nigeria. Just over the past year, China has either invested in or loaned money to the West African nation. Now, the two countries have announced that China will loan Nigeria US $1.1 billion to help Nigeria build airport terminals, a light rail line for its capital city and communication system improvements.
China continues to make such deals with Nigeria even though other have fallen apart due to corruption allegations in Nigeria. But, says Josiah Osibodu, president of international exporting company Osibodu & Associates Exporting USA, LLC based in Tampa, FL these deals can benefit both parties. “Looks like China sees the growth potential in Nigeria and they are prepared to make the investment despite all the inherent challenges. More importantly, oil-rich Nigeria could provide China with an alternative and cheaper source of oil to further fuel China’s industrial growth,” notes Osibodu, a U.S. businessman born of Nigerian heritage.
The light rail project is projected to cost about $500 million. The Nigerian government also said that another project, set at $100 million and part of a previously signed loan deal, will be allocated to improving Nigeria's Internet capability. The terms of the loans were also released: the loans for these two projects will span a period of 20 years and have a 2.5 percent interest rate.
Additionally, there is another $500 million loan. These funds will be used to build terminals in Abuja, Enugu, Kano and Port Harcourt.
Add to this the loan deal China made with Nigeria last year. As we reported in "China Courts Nigeria: China Lends $900 million to the African Nation [3]," this money too was intended for Nigeria's rail system.
With such a slew of mega-money deals, some might think that Nigeria is becoming too dependent on China. Not so, says Osibodu. “Nigeria, similar to other developing countries, has historically looked to developed nations for various forms of assistance, especially those relating to infrastructure development,” he points out. “China is aggressively investing in various developing countries that could end up as emerging markets for Chinese goods and services. Nigeria is benefiting from China’s global outreach and the relationship should best be viewed as bilateral.”