Opinion
In Africa for mutual growth
By Ma Chao (China Daily)
Updated: 2010-05-08 11:40
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Chinese firms have to maintain good ties with political parties and tribal leaders to achieve success in Nigeria
Massive swathes of dense forests, expansive grasslands and an overabundance of flora and fauna is what people in China visualize when they think of Africa. But when I walked the streets of Lagos, Nigeria, the economic hub of West Africa and the second largest city in the continent, what caught my eyes were the massive construction sites, continuous movement of cars and motorcycles and the sprawling vibrant markets. This modern metropolis is a land of opportunities, of growth.
Chinese companies have found a lot of avenues to do business in Nigeria. That is not surprising because the country's 155 million population constitutes a vast market, the largest in Africa. The Nigerian economy is booming; its GDP has been rising more than 5 percent a year for the past three years. Nigeria has the 10th largest proven petroleum reserve in the world and is the eighth biggest crude oil exporter. Its oil money has created a rich social stratum and a rising middle class - or consumers. Every year, more than a million rich Nigerians flock to Dubai for shopping.
The consuming power of Nigerians may be rising rapidly, but most of the manufactured goods sold in the country's markets are still imported because its manufacturing industries are not developed. The Nigerian government has realized that, and is now trying to attract investors in its manufacturing industries.
One such investor is Wempco Group, owned by the ethnic Chinese Dong family, which migrated to Nigeria in the 1970s. The Dongs run a highly successful business of building and decoration materials. Many more such ventures are needed to fill the vacuum in Nigeria's manufacturing sector.
Opportunities abound in the infrastructure sector, too. Nigeria's fast economic growth has extended the country's infrastructure to the limit. Since power cuts are more than usual, every hotel, office building and rich family has a power generator. Rapid urbanization has pushed cities' infrastructure - such as roads and housing - to the limit, which is reflected in the severe traffic jams and large slums.
But challenges brew opportunities. Now, the country needs to build better infrastructure in cities like Lagos and Abuja, capital of Nigeria. To improve infrastructure, Nigerian national leaders are trying to attract foreign companies, including Chinese firms, to invest in the country.
Investors have to build smooth relations with the Nigerian government if they want to do business in the country. Administrative efficiency is not satisfactory. Even companies executing government contracts have to wait a long time before getting clearance. Plus, if there is a political upheaval and the government changes, they risk losing the contracts because the new leaders could revoke them. Hence, companies investing in Nigeria should try to establish good relations with the ruling as well as the opposition parties.
Investors should maintain good relations with ethnic leaders and civil society, too, because tribal chiefs and religious leaders wield substantial power. In many areas, they are even more influential than the local governments, and being on good terms with them would help investors run their projects smoothly.
