*Chinese Consulate vows adequate intervention
Nigerian businessman, Prof. Gregory Ibe has raised the alarm that Nigeria-China trade and by extension, Africa is going through serious strain due to hiked shipping cost.
He alerted that his concern is the damage this development has started doing to the trade relations between Nigeria and China as businesses from Nigerians meant for China have started diverting to some other countries.
Ibe spoke with the ACE and noted that the matter got worse since the international travel restrictions caused by the coronavirus pandemic.
He said higher than international shipping charges, the cost of shipping 20ft container of goods from China costs about about $7,400 when from other countries, the rate is not more than $5,000. Also, while it takes some $9,800 to transport 40ft container to Nigeria, it costs about $14,200 to ship from China.
According to him, since many businesspeople place their orders for goods and rely on their business partners in China to ship them after the charges are paid, many of such goods get dumped after production.
He called on the Nigerian and Chinese authorities to intervene and stop the barrier that is seriously hurting China-Africa trade that has been the most robust with Africa in the last 12 years.
He said: “Since Covid-19 started, there have been mounting hitches in shipping goods from China and this is fueling hardship, loses and poverty in Nigeria. Almost every Nigerian importing from China is going through the same pains and here in our country that relies on China for up to 60 percent of the imports, the shops are running empty and out of stock. This is compounding our economic worries and also depleting Chinese trade interest in Nigeria to the benefits of competitor countries.”
In addition to the more stringent dollar procurement hurdles on the Nigerian side, Ibe said “cost of shipping goods from China is becoming a problem. Today, even many established businesspersons find it difficult to handle that and have resorted to buying their goods from other countries.
Sending money to China is also very challenging too. Many people who sent money and manufactured goods have them dumped in factory warehouses not sure of when to ship them.
The increase in shipping has done damage to Nigeria, especially as some other countries like U.S, India, Turkey etc still charge the standard international rate.”
Ibe therefore challenged the Chinese and Nigerians governments to intervene and resolve the issue as it has hampered business between the two countries.
He said the worry by Nigerian businesspeople is because “cost of shipping is standardized all over the world. In US, it is about $5,000 and in Turkey, India and some other places, it is the same issue. So that is why shipping cost in China is worrisome
We need to know why Chinese business partners or shipping companies or agencies are doing this to Nigerian businessmen. We have had a robust trade with China in the past 12 years during which China has been Africa’s biggest trading partner with steady yearly increase. So we need to know if the Chinese government is aware that there are forces destroying the trade and economic relationship between Nigeria and China and I can argue that it cuts across other African countries.”
On the challenges of getting foreign exchange, especially the US dollars to trade in China, Ibe lamented that the intention for the currency swap Nigeria and China entered into in 2018 seems defeated since no banks sell Chinese Renminbi and the Chinese business partners also demand payment in US dollars.
“The reason Nigeria entered into currency swap with China is because 45% of Nigeria’s international trade is with China, according to the CBN. The aim is to make trade terms and conditions easier, but it seems some people are taking advantage of the travel restrictions to go on profiteering for their personal gains, thereby killing the China-Nigeria trade benefits.”
Apart from Nigeria, there are about five other African countries that have the same currency swap deals with China because Africa relies on the Chinese market for the bulk of her international trade.
Right now, Nigerian international traders have started shifting their business focus to Turkey and India and that is already a wrong signal that whoever hiked the shipping cost is deliberately hurting China-Africa trade in a world where people have alternatives.
“I am talking as a businessperson and I can assure you that India and Turkey and some other alternatives the Nigerian traders have started using still charge the old international shipping rates.
As someone that trades with Chinese companies, I challenge you to find out any bank or even the CBN that implements the swap agreement after it was signed. Till now I am talking to you, all businesses between Nigeria and China is still denominated in US dollars. No bank issues Chinese money to businesspeople in Nigeria. I also heard of the swap deal, but nobody seems to implement it here. Worst of all, since the dollar became a big challenge to source in Nigeria, it has compounded our challenge as the shippers in China charge us much more than the international standard shipping charges,” he said in pains.
However, the Chinese Consulate in Lagos told ACE it was not aware of such development since no such complaint was ever brought to its attention by any Nigerian businessman.
The Consulate also pleaded for time to respond adequately as the request for response came at a time China is still on its national holiday when offices are not open for work.
It also promised to do all possible to get adequate response from the relevant offices back home in China and feed us back on what the situation is and how to find a way out of it.
The Consul General, Mr. Chu Maoming however assured that the Chinese government and the Consulate representing China’s business interests in Nigeria would do everything possible to ensure that the trade and economic relations of Nigeria and China built over the years on mutual benefits is not hurt.
Mr. Chu, prior to the detailed reports and feedback he promised, assured that his office would do its best to ensure that the good trade relations between the two countries is rather improved upon especially at the post-Covid-19 era when China’s policy is to do its best to contribute to global economic recovery through trade and other diplomatic cooperation.