Category Archives: Nigeria

Chinese businesses in Nnewi, Nigeria

In the same article by Deborah Brautigam (2008) about the Chinese in Mauritius, she discusses the “hidden dragon” model manifested in Nigeria. The “hidden dragon” model is characterized by few or no joint ventures between the Chinese and locals. At first, the Japanese had firms that manufactured copies of European car parts. Over time, Chinese firms replaced the Japanese ones. As she mentions, many Nigerian traders in the 1970s were involved in the business and used their connections with the Chinese to find distributors and producers. However, the question that emerges is why, unlike in Mauritius, were there no joint ventures?

Brautigam writes: “some companies, such as a producer of melded plastic components, sent groups of workers to Shenzhen and elsewhere in Asia for on-the-job training in Chinese factories. Others used their contacts with trading companies to identify Chinese manufacturers who were ready to sell used equipment, such as the oil filter manufacturer who purchased the entire plant of his Singapore supplier” (62).

She adds that due to the lack of substantial FDI by the Chinese in this part of Nigeria, there were fewer opportunities for Nnewi to work with overseas firms or collaborate in joint ventures. However, by 2006, around 60 Chinese firms had invested heavily in other sector in resource extraction, agro-processing and textiles. Furthermore, “the governments of Anambra, Benue, and Taraba States in Nigeria have entered into joint ventures to produce cement, woven bags, sugar, purified water and machine tools with the Gongji Cangxi Industry and Commerce Development Company (a Henan province township enterprise that produces machinery for juice and vegetable oil extraction, concrete and nails)” (64).

Brautigam alludes to development economist Sanjaya Lall’s study of Taiwanese investments in Lesotho. I cannot find his study anywhere, but have this quote given by Brautigam to examine:

“…Family owned and controlled East Asian firms have a culture that does not conduce to local skill creation or local participation at high levels. Work at these levels is conducted almost wholly in Chinese. The tendency to bring in textile workers from China reduces skill transfers and promotion at the shop-floor level…suspicion and hostility on the part of the local population to the Chinese…prevents the creation of greater trust and social capital” (65).