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President Buhari’s China Visit: What we know so far

A lot have been made of President Buhari’s trip to China. Politicians from both major parties have either praised the achievements of the president while his opponents are focusing their criticisms on the weakness of the deal. We will dissect both of those at a later date but let’s separate fact from fiction and highlight what we know so far.

  1. $2 billion from China to finance the deficit in the 2016 budget – This is one of the more controversial deal alleged agreed too although lots of debate whether it’s been signed or merely just verbally agreed to. It’s no secret that the yet to be signed 2016 Budget includes a deficit given the lower price of oil. This is one option to help plug the gap. Another option being discussed by the Federal Government is an increase nationwide to Value Added Tax (VAT) as well as increased enforcement to revenue collection but I digressed
  1. Naira – Yuan Currency swap agreement – We’ve discussed this in an earlier post. But basically, according to several news sources including THISDAY, “The new agreement would see Nigeria-China trade, which account for over 70 percent of imports into Nigeria, concluded in Yuan. Until now, over 90 percent of international trade between Nigeria and the world is done in dollars, and in the process putting so much pressure on the naira.”
  1. Agricultural Demonstration Farms across the country – One of the Nigerian President’s goal is to make Nigeria self-sufficient in food production. The Chinese President has offered $15m in agricultural assistance to Nigeria for the establishment of 50 Agricultural Demonstration Farms across the country. All necessary details are yet to be revealed
  1. Vocational/Technical Training & Scholarships – China and Nigeria agreed to increase military and civil service exchanges as part of a greater capacity-building commitment. China has offered to raise its scholarship awards to Nigerian students from about 100 to 700 yearly. 1,000 other Nigerians are to be given vocational and technical training by China yearly
  1. Other Agreements (Without a lot of detail)
  • Framework Agreement Between the Federal Ministry of Trade and Investment of the Federal Republic of Nigeria and the National Development and Reform Commission of the Peoples Republic of China
  • Memorandum of Understanding on Aviation Cooperation between the Ministry of Transportation (Aviation) of the Federal Republic of Nigeria and the Ministry of Commerce of the Peoples Republic of China
  • Memorandum of Understanding between the Federal Republic of Nigeria and the Government of the Peoples Republic of China on Scientific and Technological Cooperation
  1. $6.0bn infrastructure Loan Agreement – The Breakdown
  • North South Power Company Limited and Sinohydro Corporation Limited signed an agreement valued at $478,657,941.28 for the construction of 300 Mega Watts solar power in Shiriro, Niger State
  • Granite and Marble Nigeria Limited and Shanghai Shibang signed an agreement valued at $55 million for the construction and equipping of granite mining plant in Nigeria
  • $1 billion is to be invested in the development of a greenfield expressway for Abuja-Ibadan-Lagos under an agreement reached by the Infrastructure Bank and Sinohydro Corporation Limited
  • $250 million deal to develop an ultra-modern 27-storey high rise complex and a $2.5 billion agreement for the development of the Lagos Metro Rail Transit Red Line project.
  • $1 billion for the establishment of a Hi-tech industrial park in Ogun-Guangdong Free Trade Zone in Igbesa, Ogun State
  • Ogun-Guangdong Free Trade Zone and CNG (Nigeria) Investment Limited also signed an agreement valued at $200 million for the construction of two 500MT/day float gas facilities.
  • An agreement valued at $363 million for the establishment of a comprehensive farm and downstream industrial park in Kogi state was also announced at the Nigeria-China business forum.
  • $500 million project for the provision of television broadcast equipment and a $25 million facility for production of pre-paid smart meters between Mojec International Limited and Microstar Company Limited – Currently Under Negotiations

As more details come out, they will be shared on here. Also we will continue with the post mortem of the part of the deal of most interest to Nigerians, the currency swap agreement with the pros and cons.