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Northern Nigerian Businessmen Debate the Effects of Chinese Investments

In Nigeria, the northern town of Kano is the second largest commercial city after Lagos. Kano is known for its export of groundnuts and cotton. It also has a large number of manufacturing industries. But today, cheap imported products from China like textiles, electronic, and shoes are said to be overtaking older established industries.At one time, business was busy in Bompai, but not today. Most of the industries are shut down. The few that are operational are experiencing harsh times. Umar Sani Marshal is an industrialist and a businessman. He says Kano town is known for its industrial decline, but it is gradually coming back to life thanks to Chinese business interests,who are taking advantage of cheap labor in order to manufacture plastics.He says Chinese businessmen are revitalizing the plastic industry, employing indigenous workers and paying low wages.

"Most of the plastic goods that are going to the market were imported before, but now when you look at it, the Chinese are discovering that they can have raw material at a cheap rate, they can have a good environment, they can have cheap labor. When you combine all these together, you can see that gradually they are coming."

Umar Sani Marshall says Chinese businessmen have overcome hardships in Nigeria, like erratic electricity supplies by providing alternative power supply at high cost for their factories.

"We have some positive achievements in the influx of Chinese businessmen. When you look at the expansion in the textile and plastic industries you can see that it has created a lot of job opportunities especially in this part of the country. Only the Chinese and other Asians will endure all the hardship that most of the northern manufacturers are facing, due to epileptic power supplies, shortages of energy and other stuff."

Kantin Kwari is a growing out door market in Kano. This market is bustling with the buying and selling of imported textiles from China. Marshall says Kano and Nigeria would be harmed, if Chinese businessmen withdrew their investments.

"I am a manufacturer just like the Chinese. I am not being afraid of the Chinese because they are contributing to the economy. The highest number of private employers in Kano are the Chinese and they have been expanding day by day. So we should not look at the negative aspect of the Chinese. We should look at them in a positive way that will give us the chance to challenge them, compete with them in business. If they close down their industries, you will see the number of unemployed in Kano will be very high."He says.

Mallam Mohammed Sani is a big time businessman in Kano.He specializes in the importation of telecommunication equipment, including the GSM telephone handsets and accessories. He strongly disagree with Marshall that China is industrializing Kano or Nigeria.

He says Chinese businessmen should set up more industries rather than importing so many finished goods into the country.

" Honestly, China is not doing good in anyway to the Nigerian economy by exporting its finished goods to the country. The indigenous industries are being crippled and again it creates a serious situation of unemployment. They say they are promoting the country’s economy. If it is true, why can’t they come and site the industries within the country? So that by so doing job opportunities can be generated and at such even the cost of the product will be lowered."He says.

Mr. Ibrahim Inuwa Balarabe agrees. He is an economics lecturer with the School of Management Studies, a unit of Kano State Polytechnic.He says the Chinese investments do not automatically imply industrialization.

He adds that,"I cannot subscribe to the idea that Chinese activity in Kano state will help in industrializing Kano. Rather what the Chinese do in Kano is just to look for businessmen to liaise with them and allocate goods that they can sell on their behalf . Since we are just importing what China produces and selling in Kano that means it’s only China that benefits; by buying from them we create a market for them and we also create employment opportunities for them. Also the raw materials that they use to produce most of the things that they bring to Kano are normally extracted here in Kano. When you look at it, I don’t think from the economic aspect of it Chinese activity will help Kano to become industrialized."

China began to open up its economy in the late 1970’s when it moved from a centrally planned economy to a market-oriented economy; it decentralized trade, slashed tariffs, unified the dual exchange rates in 1994, and removed exchange controls on current transactions in 1996. These actions, together with other reforms, triggered the rapid expansion of China’s investments in other countries, as well as foreign investment into China.

Many African countries welcome investments by the Chinese-who do not attach conditions such as guarantees of transparency or good governance to their projects. Some human rights activists say they worry that China’s policies could prevent Africa from democratizing. They also say that increase trades with China-which often floods African market with cheap finished goods-is bankrupting local manufacturers. China denies accusations by critics, who say its investments are comparable to European colonialism.