China has shown support for economic cooperation with Nigeria. One area that has benefitted from this collaboration is the small and medium enterprises sector. DANIEL ESSIET reports.
The Chinese Government has shown interest in upping its economic relations with Nigeria in the last 10 years. In 2018, China Development Bank (CDB) and United Bank for Africa (UBA) Plc signed a $100 million seven-year loan agreement to finance the development of small and medium enterprises (SMEs) in Africa. The loan enhanced UBA’s capacity to provide access to finance to small and medium enterprises (SMEs) across the 19 African countries where UBA operates.
At the signing, Chairman, UBA Plc, Tony Elumelu, said the fund would boost small and medium scale enterprises across Africa, noting that CDB’s interest in supporting SMEs aligned with UBA’s vision in growing businesses across Africa.
“In UBA, CDB would have an enduring partner in reaching out to Africans as UBA provides banking services to over 14 million people across 20 African countries, and like CDB, UBA funds critical infrastructural projects on the continent,” Elumelu said.
He said he would like to see an even stronger relationship grow with CDB and UBA as well as with China and Nigeria.
The President of CDB, Zheng Zhijie, said the agreement was the beginning of cooperation between UBA and CDB that would translate into an enduring business relationship between China and Africa and Nigeria in particular.
This year, CDB has provided financial support for specialised and sophisticated small and medium enterprises (SMEs) in the country.
A total of 13.1 billion yuan ($1.84 billion dollars) in loans was granted in the first three quarters of 2022. The loan was to support high-quality development of 115 specialised and sophisticated SMEs that produce novel and unique products. CDB has a work plan for special loans and supportive policies to comprehensively improve the level and capacity of refined financial services.The bank has also rolled out preferential policies for specialised and sophisticated SMEs that produce novel and unique products to further lower their financing costs.
At this year’s 2022 Stanbic IBTC African-China Expo, the Chinese Consulate-General Lagos, Guo Pengwen, emphasised the Chinese Government’s readiness to work with all the countries to build an open world economy.
According to him, China and Nigeria as the important economies in Asia and Africa need to share trade cooperation to benefit the people of the two countries.
China is a huge market with a population of over 1.3 billion. In the coming 15 years, China’s import of goods and services are expected to exceed $ 30 trillion and $10 trillion respectively. Analysts believe this present enormous opportunities for countries around the world including Nigeria to explore.
The Managing Director, and Chief Executive Officer, Zeenab Export Limited,Victor Ayemere, praised the Federal Government for setting up the Nigerian export trade house in China.
He said the Nigerian export trade house Was a Nigerian warehouse in China that guides Nigerian exporters on logistics and marketing.
Senior consumer analyst, Stanbic IBTC, Fola Abimbola, highlighted that the import-export lag, issue of reforms, as well as the inability to utilise the key potentials as China has done is a challenge for Nigeria, further stating that “we need reforms to drive export growth which will ultimately be good for disposable incomes.”
Abimbola noted that Nigeria was in a situation whereby imports from China were three times the exports to China, productivity is growing slower than output, and while the population is growing three to four percent, the output is growing less than 1 percent.
To access the China market, the Regional coordinator (South West) Nigerian Export Promotion Council (NEPC), Samuel Oyeyipo, urged SMEs to ensure they meet all necessary certification requirements of counterpart countries.
Oyeyipo stated that most exporters or MSMEs, in Nigeria, have products that can compete in the international market, however, one of the issues noticed by the NEPC was most do not have the necessary certification to attest to the quality of the products, because MSMEs being weak in the capital cannot afford these certifications.
In confirmation of this, Ambassador of China to Nigeria, Mr. Cui Jianchun, was quoted as saying: “We are committed to mutual benefits and win-win results, and work together to promote economic and social development for the greater benefit of our people.”
One vehicle that China has used to promote business relationship with both countries is the China International Import Expo (CIIE) which has been holding regularly in November in Shanghai.
Report said more than 40,000 Chinese and foreign buyers meet there to explore business deals. The value of potential deals resulting from the nearly week-long event is believed to be in excess of $50 billion.
China holds CIIE to widen market access to the rest of the world and to support economic globalisation. Since inception of the event in 2018, the world’s largest import fair has provided a big opportunity for companies from developing countries to export their products to the Chinese market. Because of its central role in promoting China’s continued integration into the global economy, CIIE has received much attention from Africa, with participation from the continent increasing over the years. Nigerian firms have attended the exhibition and featured products, such as Adire. This year, the International Trade Centre (ITC) brought almost 70 micro, small and medium-sized enterprises from 31 developing countries in Africa, Asia, Latin America and the Caribbean to participate in CIIE. The 67 small businesses promoted food and agricultural products, consumer goods and service offerings at the Enterprise and Business Exhibition.
ITC Executive Director Pamela Coke Hamilton said: “The China International Import and Expo provides an unparalleled platform for small businesses to connect with the Chinese market. We are supporting 67 small companies to participate in the China International Import Expo. ITC carefully selected these companies and worked with them to ensure their quality and capacities meet the requirements of the Chinese market.”
ITC’s contribution to CIIE is part of a long-term partnership with China to support South-South cooperation and trade competitiveness, with a focus on least developed countries in Africa, Latin America and the Caribbean, and Asia.
As an official partner of the Expo and in collaboration with the Ministry of Commerce of China (MOFCOM), ITC has supported the participation of more than 200 small businesses from more than 30 developing countries in this important exhibition since its inaugural event in 2018. By promoting their products and services, and organising business matchmaking events, ITC helps businesses take advantage of the Chinese market. In the past four years, ITC has helped them to reach business deals worth about $20 million.
Read the full article here