China and Nigeria’s oil

by KHADIJA SHARIFE

Source:Energy Information Administration

China has long been renowned in Africa as the architect behind the continent’s ‘weapons of mass construction’. To date, this trademark is best symbolised by the 1,860 km Tanzania-Zambia Railway (TanZam), constructed from 1970-1975, at a cost of $500 million.

The project, a vital inter-SADC vehicle financed via an interest-free loan, was finished ahead of schedule and served the critical purpose of diminishing Zambia’s dependence on apartheid South Africa and Ian Smith’s Rhodesia (Zimbabwe), crucially aiding in the isolation of the former.

Working alongside thousands of Tanzanians and Zambians were 25,000 Chinese labourers, constructing an alternative route. Since then, prior to Beijing’s official ‘return’ in the late 1990s, infrastructure averaged just four per cent of foreign investment. That changed with the creation of China Export-Import Bank (China Exim) in 1994 – currently the world’s third largest export credit agency (ECA), providing more than $23 billion in easy loans in just over a decade. An estimated 50 per cent of China Exim loans were invested in Africa, with 79 per cent of funds earmarked toward infrastructure, chiefly mega-dams, railways, power plants, mining facilities and telecommunications.

But another project is set to replace TanZam’s legacy in scale and magnitude. Nigeria, Africa’s largest oil producer, via the Nigerian National Petroleum Corporation (NNPC), signed a $28.5 billion Memorandum of Understanding (MOU) with the China State Construction Engineering Corporation (CSCEC), ranked as one of the world’s largest construction companies.

For Nigeria, importing 85 per cent or $10 billion worth of refined oil annually, the proposal for three greenfield refineries and a petroleum complex is the difference between freedom and dependence. Presently, of Nigeria’s four refineries, including Warri (125,000 barrels per day); Kaduna (110,000 bpd); Port Harcourt, Rivers State (150,000 bpd); Port Harcourt, Alesa Elemi (120,000 bpd); only one is said to be operational.

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