Is China’s investment in Africa good for the Nigerian economy?
| Published date | 02 February 2015 |
| Date | 02 February 2015 |
| Pages | 40-48 |
| DOI | https://doi.org/10.1108/JCEFTS-09-2014-0020 |
| Author | Joseph Nnanna |
| Subject Matter | Economics,International economics |
Is China’s investment in Africa
good for the Nigerian economy?
Joseph Nnanna
Division of Business Administration,
Northwestern Oklahoma State University, Alva, Oklahoma, USA
Abstract
Purpose – The aim of this paper is to assess the impact of China’s trade agreement and foreign direct
investment (FDI) ows to Nigeria with special reference to the manufacturing sector utilizing the
following key economic performance indicators: ination, unemployment, income and gross domestic
product, to name a few. Since the turn of the millennium, China has enjoyed a substantial presence in the
African continent. In fact, the country has signed bilateral agreements with Angola, South Africa and
Sudan to name a few. Recently, China established its West African trade hub in Lagos, the economic
capital of Nigeria, to be strategically positioned. The results of the study revealed conclusively that
although China’s investments over the years have beneted the Nigerian economy and its various rms
in the manufacturing sector, the agreement signed by both countries ultimately needs to be reexamined
to ensure equity.
Design/methodology/approach – To thoroughly analyze the effects of China’s investments in
Nigeria, this study was carried out in two phases. The rst analysis of this study is anchored on a
“before/after” framework based on descriptive statistical analysis of the selected economic performance
indicators chosen from selected cross-national data. Accordingly, the time frame for this study runs
from 1993-2012 which roughly corresponds to the era when China commenced signicant investments
in Nigeria. Second, employees, policymakers and individuals in the manufacturing/textile industries
were interviewed. Furthermore, participation from federal as well as local government agency staff
members was solicited using the Delphi technique.
Findings – Empirically, the results conclusively reveal China’s dominance in the manufacturing and
textile sectors in Nigeria. In other words, at face value, China’s investments are ultimately good for the
Nigerian economy. However, at a micro-level analysis, the researcher examined the human factor, that
is, the families of former and current employees, abandoned businesses/factories and a decaying textile
industry that was once vibrant.
Originality/value – To the knowledge of the researcher, this is the rst study attempting to assess the
impact of the rise of China on the Nigerian economy by combining key economic performance indicator
in tandem with face-to-face interviews and the Delphi technique.
Keywords China, Nigeria, Foreign direct investment, Manufacturing sector, Trade agreements
Paper type Research paper
Introduction
With the re-emergence of democracy in 1999, the Nigerian economy has ourished.
The implementation of economic reform programs laid out and monitored by the
International Monetary Fund (IMF) and World Bank (WB) has, no doubt,
transformed the much needed reform and macroeconomic framework. Despite the
much needed transformation on the macro level of the economy, the micro level has
been left wanting. Specically, the manufacturing sector of the economy has been
affected adversely, to say the least. Recently, China has partnered with several
The current issue and full text archive of this journal is available on Emerald Insight at:
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JCEFTS
8,1
40
Journalof Chinese Economic and
ForeignTrade Studies
Vol.8 No. 1, 2015
pp.40-48
©Emerald Group Publishing Limited
1754-4408
DOI 10.1108/JCEFTS-09-2014-0020
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