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May 10, 2013

Oil and cheap electronics: Nigeria as a microcosm of the Sino-African story

s times bloom etcFor more than two year journalists Kevin Bloom & Richard Poplak have been travelling through Africa and beyond to document the China-in-Africa story. This article, after their recent trip to Nigeria, was first published in the Sunday Times on 5 May 2013.

For a variety of reasons, we have left Nigeria for next to last. Three years, thirteen African countries, plus supplementary trips through China and India, in search of the Africa Rising story—a narrative we dub “Africa 3.0”. Our reasoning is proved correct as soon as we hit the streets of Lagos, a city that’s remarkably astute in summing up every challenge, and opportunity, the continent currently faces.

Take for instance the highway through Apapa, Lagos’s portlands, which is nothing if not a précis on the limits of the petro-state. Oil trucks are backed up on the verge for kilometres, their drivers dozing on makeshift hammocks beneath the tanks. Puddles of water from last night’s rain mix with rainbow swirls of crude—one errant cigarette butt would send a mushroom cloud into the stratosphere. In the shadow of five-storey-high oil reservoirs, our car stops in the parking lot of a gated market. Men bent under the weight of television sets trudge through the mud.

We negotiate our way around them, gingerly stepping along gangways of rotting wood. Almost every stall—and there are hundreds—inhabits a beaten-up shipping container. Blenders, monitors, hard drives, slow cookers, rice cookers, hair curlers, hair straighteners, hair dryers—an emporium of secondhand “Made in China” household detritus. Oil and cheap electronics: the Sino-Africa story in microcosm.

With a twist. Locally, the market is known as Westminster, named for the British dredging company that once occupied the premises. It is now owned and operated by the Nigerian super-company Ibru Organisation, headed up by octogenarian business Big Boy Martin Ibru, who got his start distributing frozen fish in 1957.

Ten minutes after entering Westminster’s gates, we are accosted by several security personnel. They insist we follow them along the gangways and through the puddles into the head office. When general manager Ovie Oghenekaro calms down and realises we aren’t “spies,” he offers a voluminous explanation of what we’ve just seen.

“Despite the fact that most everything here is built in China, none of the objects are imported from there. We have something of a bias when it comes to quality. Instead, everything comes from the UK—we believe that the British, the Italians, receive better goods.”

Oghenekaro’s words, which at face value make no business sense, serve for us as one more example of Nigeria’s growing ambivalence towards the Chinese. As Lamido Sanusi, the governor of the Central Bank of Nigeria, recently wrote in the Financial Times: “So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism.” The article hit Beijing like a bomb blast, the shockwaves of which rattled the 2013 BRICS summit in Durban, sending delegates scuttling for official edification.

Of course, one can hardly blame the People’s Republic for their consternation. Nigeria has long been a primary player in the Sino-Africa love story, and even Sanusi concedes that a “divorce” is unlikely. The country established formal ties with Beijing in 1971, a kinship that flourished during the decades of military and pseudo-civilian regimes, when Western players queasily stuck to their concessions in the oil rich Niger Delta. Now, depending on the day, Nigeria is China’s third or fourth largest trading partner on the continent. In 2006, the country became the first in Africa to sign a Memorandum of Understanding with Beijing for the so-called “Establishment of Strategic Partnership” programmes—a sign that Abuja was actively seeking alternatives to Western investment.

Oil certainly drives the relationship, although the Chinese are preternaturally alive to the fact that Nigeria’s 162 million or so citizens represent one of the single largest markets in the world—Lagos itself is now considered the largest city in Africa, with the New York Times pegging the population at 21 million. To this end, academics believe that there are more Chinese currently residing in Nigeria than there were Britons during the colonial era. And while the usual State Owned Enterprise construction of roads and highways forms the most visible element of the Chinese presence, in 2007 China helped develop and launch the NigComSat-1, the first time the China Great Wall Industry Corporation provided all aspects of in-orbit delivery of a satellite to an international customer.

Still, Sanusi insists that Africa sheds its romantic view of Maoist China and sees the modern giant for what it is—“a competitor”. As the powerful central bank governor surely knows, there are many in his country who’re doing exactly that. According to Kola Karim, CEO of billion dollar conglomerate Shoreline Energy International, the Chinese are destined to become less of a long-term economic driver in Africa than the growing impulse towards intra-continental trade and cooperation. Karim, 44, has an outlook that’s typical of a new generation of African businessman, a vision that’s switched on to the continent’s collective potential in a globalised marketplace—to hear him speak is to get a sense that Muammar Gaddafi’s empty pan-Africanism is being replaced by a pragmatic (if somewhat belated) intention to make nonsense of borders.

“Kenya has scrapped visas for Nigerians,” Karim tells us, from behind an ample desk in his Lagos headquarters. “You’d be amazed at the scale of Nigerian investment in that country.”

Outside of Nigeria, Shoreline Energy has operations in Ghana, Uganda and Angola, and is extending its footprint into Europe and Asia. With assets in the infrastructure, energy, financial and telecommunications sectors, Karim would dearly love to bring his brand to South Africa, even if he’s keenly aware that our business titans are allergic to Nigerian overtures—the problem, he bluntly suggests, is that South Africans assume all Nigerians are criminals. By contrast, South African companies are enormously active in Nigeria: you could be fooled into thinking that the country shares its national colours with MTN.

“First Bank in Nigeria can now write you a cheque for $500 million,” Karim continues, “which means I can go to Ghana and do big chunky deals.” This new phenomenon—capitalised African financial institutions willing to underwrite deals across the continent—provides a sop to the “Chinese are taking over Africa” narrative. And no other sector of the Nigerian economy proves this better than the cheap soapies and increasingly big-budget popcorn pictures that have come to be known universally as “Nollywood”.

One of our primary objectives in Nigeria is to attend the African Movie Academy Awards, or AMAAs, the name an obvious nod to Hollywood’s Oscars. After an afternoon flight from Lagos to Port Harcourt, we take a taxi through to Yenagoa, the capital of Bayelsa State, in the heart of the Niger Delta. “Two years ago, I don’t take white guys there,” says our driver, adding that we almost certainly would have been kidnapped. Today, with Governor Seriake Dickson funneling a large chunk of his oil revenues into security, it’s the road itself that poses the biggest threat—the carnage on Nigeria’s highways amounts to an average of eleven daily fatalities, and the potholes on this stretch invite a head-on at every turn.

But we get to the State Council Theatre soon after nightfall, and watch goggle-eyed as a homegrown African industry celebrates its stars.

Nollywood, as the lore goes, was born in 1992, on the back of the import of cheap video cassettes from Taiwan. Unable to move the hardware, a trader hired a theatre director to make a cheap movie. That first film, “Living in Bondage,” sold half a million copies. In 2009, a United Nations report revealed that Nollywood had overtaken Hollywood to become the world’s second largest producer of films (behind India’s Bollywood). The industry’s influence is felt across the continent, with Zambian mothers, according to the Economist, complaining that their kids talk in Nigerian accents. In Nigeria, only the government is a bigger employer.

On the night of the 2013 AMAA awards, the pan-African theme is touted by each of the introductory speakers, including the South African High Commissioner, who’s an honoured guest. Event organiser, Peace Anyiam-Osigwe, laments that “it’s actually easier to get to Equatorial Guinea through France than from Nigeria,” adding that it’s the responsibility of filmmakers to make such facts known. Everybody talks about the need for Nigerian-South African co-productions. The event may run less than smoothly—the sound engineers are atrocious, and proceedings end at 4am—but given that all this glitz is happening in one of Africa’s most notoriously volatile regions, cynicism must be tempered with patience.

That said, a few hours later, while waiting in the Port Harcourt airport lounge for our return flight to Lagos, we interview a man who has long run out of patience. Chief Eddie Ugbomah, 72, is a former chairman of the Nigerian Film Corporation, a filmmaker from before Nollywood’s start, and is carrying with him an AMAA statuette for “lifetime achievement”. Ugbomah has many gripes, chief among them the assertion that Multichoice is “killing Nollywood” with its Africa Magic channel—his contention is that the bulk sale of Nollywood film rights to the South African media giant eats away at the industry’s real bread and butter, the sale of cheap DVDs.
Is this true? If so, the store owners in Lagos’s heaving Idumota market are unconcerned—for them, piracy is the major obstacle to a brisk trade. But whatever the challenges, there’s no doubt that what we’re witnessing here, on our last day in Nigeria, is a real-world example of central banker Sanusi’s call for “an afro-centric vision of economic policies”.

As for the Chinese, while they may have provided much of the hardware on which Nollywood now runs, this is a value chain in which they can’t compete.

A portion of the funds for this research trip, the fifteenth country Bloom and Poplak have visited in service of a forthcoming book on “Africa 3.0” (to be released by Jonathan Ball), was provided by the China-Africa Reporting Project at Wits University.

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