Africa's largest economy courts China

A forum hosted by Nigerian Stock Exchange touted the nation as a promising place for investments

"Now it's the time to come and tell Chinese investors to set up business in Nigeria and encourage more direct foreign investment from China," said Sola Onadipe, Nigerian ambassador to China, during the Invest in Nigeria Forum co-hosted by the Nigerian Stock Exchange in Beijing on Dec 5.

Officials and executives in the Chinese and Nigerian governments and business communities say they have an optimistic view of the future of China-Nigerian bilateral economic and trade relations.

The Nigerian Stock Exchange hosted the forum, along with J. Streicher Advisory LLC, University of International Business and Economics in Beijing, China-Africa Business Council and China International Entrepreneurship Network of UIBE.

Beijing was the last stop of NSE's Asia tour after Singapore and Hong Kong. It was the first time NSE held an event in the Chinese mainland, and it drew many interested parties' attention and participation.

More than 100 delegates from Nigeria, the United States, Australia, Singapore and China participated.

"The Chinese government supports and encourages more Chinese companies to invest in Nigeria," said Cao Jiachang, deputy director general of China's Ministry of Commerce. "We are hoping the Nigerian government and organizations could offer more investment opportunities and improve preferential policies to attract more Chinese companies."

According to Cao, the rich natural and human resources of Nigeria form a good foundation for industrial development and to attract foreign investment.

Moreover, the Chinese government's "go global" strategy is encouraging Chinese companies to further their overseas investment, improve investment quality, and step up the development of their management to international standards.

"Economically, China and Nigeria complement each other very well. They are capable of reaching a more effective and better quality cooperation," Cao said.

Manufacturing, agriculture and infrastructure are three sectors in which Cao thinks the two countries could best further their investment cooperation.

"We can feel clearly the ongoing process from trade to investment. And the project quality has significantly improved in recent years," said Wu Zheneng, deputy managing director of the China-Africa Development Fund.

Wu says that China-Nigeria economic and trade cooperation is a win-win game as the two countries are huge consumer markets and huge supply markets. "The chance of imbalance will be small in the two countries' cooperation," Wu said.

Nigeria's government offers some preferential policies for foreign investors, a tax-free policy on trade zones being one of them.

The companies in Lekki Free Trade Zone, about 50 kilometers from Nigeria's commercial capital of Lagos, need to pay neither import tariffs nor income tax, which is about 30 percent elsewhere in the country.

"The preferential policy attracts not only Chinese companies, but also local ones," said Wei Xuemin, marketing director of China-Africa Lekki Investment.

Besides tax preferences, companies in trade zones also benefit from immigration policy and financial equity policies. There is no quota system when recruiting and hiring foreign workers, and foreign investments can run sole-proprietorship businesses in the zone.

Huang He, Beijing office chief delegate of Julong Group, one of the biggest palm oil producers in China, says the company intends to enter Nigeria when "conditions are ready".

"We have built up connections with the Nigerian government, Nigerian Investment Promotion Commission, and financial institutions, and once the political situation is stable and Ebola is under control, we will go," Huang says.

Nigeria was declared Ebola-free by the World Health Organization in October after a handful of cases were brought under control, but the epidemic is ongoing in some West African countries.

Huang says that Julong has five offices in the continent, in Ghana, South Africa, Tanzania, Kenya and Cameroon. It has about 40 employees, and 20 percent of them are local.

Safety, markets, natural conditions, costs and financial environment are factors Julong considers before making a move.

"Safety includes factors such as industrial, political, society, cultural, and safety of our employees' lives, for example, Ebola," Huang said.

Lin Guijun, vice-president of University of International Business and Economics, thinks China's experience in infrastructure construction will benefit Nigeria, and the two countries' cooperation has great potential.

"We must share the development; sharing will make both of us succeed," Lin said at the forum.

In order to encourage foreign investment, the Nigerian government has abolished legislation preventing the flow of foreign capital into the country. This has allowed foreign brokers to enlist as dealers on the Nigerian Stock Exchange, and investors of any nationality are free to invest. Thus, Nigerian companies and foreign companies operating in Nigeria both obtain legal accesses to different foreign stock markets.

Founded in the 1960s, the Nigerian Stock Exchange plays a vital role in the Nigerian economy by providing a robust capital market infrastructure to enable savings to be funneled to investments, a price discovery mechanism between supply and demand for listed financial products, and a platform for raising capital, said Oscar N. Onyema, CEO of the stock exchange.

According to Onyema, the NSE ensures an orderly, fair and equitable marketplace, protecting the integrity of the market and investors.

Based on data provided by the NSE, the current trade volume between Nigeria and 15 Asian countries is in excess of $40 billion. China is currently Nigeria's second-largest trade partner with a trade volume of about $12.98 billion, after India's $17.87 billion.

The nation is also set to benefit from the proposed $206 billion Infrastructure Development Fund from the Chinese government.

According to Onyema, the NSE Asia tour was necessitated by the emergence of Asia as Nigeria's major trading and investment partner.

The Asia tour, to cultivate relations with Asian capital markets and financial market operators, introduces Nigeria as an investment choice for frontier and global emerging market portfolios, and to increase Asia/Nigeria foreign portfolio investment flows as a proportion of its FDI flows.

The NSE is a customer of New York-based J. Streicher Advisory LLC, which focuses on working with countries that have fast-growing economies and high business standards.

"We suggested the NSE add Beijing as a stop of their Asia tour as we believe there is great business potential for both Nigeria and China," said Thomas Brown, CEO of J. Streicher.

Brown says he hopes there will be an opportunity to continue discussing future collaboration in Africa with Chinese firms and organizations, such as the China-Africa Development Fund.

Brown says he and his colleagues would remain for one week in China and have meetings with Chinese companies to discuss business and explore future opportunities.

duxiaoying1@chinadaily.com.cn

(China Daily Africa Weekly 12/12/2014 page21)