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Parvathi Vasudevan and A Vasudevan
Prime Minister Narendra Modi’s visit to Nigeria (Nov.16, 17) is the first such visit by an Indian PM in 17 years. The visit, at the invitation of the President of the Federal Republic of Nigeria Bola Ahmed Tinubu, will explore ways to build the Indo-Nigerian bilateral relationship, and will see the Prime minister address a gathering of the Indian community in Nigeria.
India and Nigeria have much to offer each other in socio-economic areas of human activity
The relationship between India and Nigeria needs to be viewed beyond the prism of the historical experience of educational scholarships, crude oil and military training, if the 21st century should truly belong to the global South. A new chapter was opened when the G-20 in 2023 held in New Delhi welcomed African representation with a permanent place at the high table.
India and Nigeria have much to offer each other in socio-economic areas of human activity. From the Nigerian point of view, it is clear that with Nigeria poised to produce petroleum goods essentially due to the entry of Dangote refineries, the nature of its international relations with India and in fact with the rest of the world would alter beyond recognition. To an extent, this metamorphosis will be guided by the considerations that would characterise the new Trump administration in the US.
The geo-politics of the world being dominated by tensions in the Middle East, the Ukraine-Russia conflict and uncertain dimensions of Chinese diplomacy with its expansionist policies have influenced India to build fresh bridges with the African Continent
From the Indian point of view, the geo-politics of the world being dominated by tensions in the Middle East, the Ukraine-Russia conflict and uncertain dimensions of Chinese diplomacy with its expansionist policies have influenced India to build fresh bridges with the African Continent.
Among the African countries, Nigeria’s economic dominance cannot be questioned, given its many blessings. It has a large population of an estimated 220 million, almost 16 per cent of India’s estimated population and over 60 per cent of the population of USA. Nigeria has a sizeable diaspora in scientific and academic areas. It has an opportunity to reap the demographic dividend if it develops skills and undertakes a wide range of reforms needed for modernising its socio-economic landscape.
Yet another constraint is Nigeria’s weak political and economic governance wherein, sadly, corruption has become rampant
One of the major constraints it faces now is the presence of a terrorist organisation called the Boko Haram with an agenda to disrupt peace, social and religious harmony and to capture political power through violence. The latest news reports from Nigeria suggest that a new terrorist organisation called Lakurawa is active in the North-western part of the country. All efforts of the police and military have so far not been able to contain their activities to the extent needed to establish a firm peaceful and modern power to reckon with in the African continent.
Yet another constraint is Nigeria’s weak political and economic governance wherein, sadly, corruption has become rampant and the legal system along with other institutions have become prisoners of the powerful elite. No wonder therefore the economic indicators of Nigeria in the last ten years or so are dominated by a high inflation rate, low growth and a relatively meagre reservoir of foreign exchange reserves. Right now, annual inflation is over 30 per cent, annual growth around 3 per cent and foreign exchange reserves about US $40 billion. The foreign exchange market rate of over 1660 Naira per 1 US dollar does not give much scope for imports of critical raw materials and inputs for economic diversification and enhancing Nigeria’s production capabilities.
Till Nigeria becomes self-sufficient in the production of petroleum products, it would have to depend on importing petroleum products from India while India could import crude oil to meet its growing oil demand
Yet the current administration offers hope that reforms can be undertaken with commitment notwithstanding protests as evidenced by its elimination of fuel subsidies. The financial sector dominated by the banks is in better shape than ever before. It can adopt new technologies and help improve the payment infrastructure with definitive measures to address cyber frauds and attacks.
India from all accounts has built an enviable economic record in the last 10 years and is aiming to become the third largest economy in the world before 2030. It expects to grow at 7-8 per cent a year with inflation at around 4 per cent in the medium term. Its present foreign exchange reserves are close to US$ 700 billion. New technologies are much developed and owned and would occupy the entire economic space within the medium-to-long-term period. But it has a shortage of critical raw materials and energy supplies.
Both countries need to explore the availability of critical minerals for developing new technological world dominated as it is by chips and semi-conductors
Against this background, how could one take forward the relations between New Delhi and Abuja? It is widely acknowledged that both the countries will have to focus on a wide array of reforms and economic governance. They have to also invest in eliminating economic exclusion, improve employment prospects and reduce economic inequities.
Cooperation between the two countries needs to be based on a few issues when the heads of Governments of India and Nigeria meet on November 16-17 at Abuja. First in the list is energy supplies in the medium term. This will mean that till Nigeria becomes self-sufficient in the production of petroleum products, it would have to depend on importing petroleum products from India while India could import crude oil to meet its growing oil demand. Electrification with solar and wind energy would also be needed to be included in this category.
Issues relating to defence, military ware and training would also have to figure in the talks. Cultural and educational exchanges would have to be furthered to improve meaningful cooperation based on mutual trust
Secondly, both the countries need to explore the availability of critical minerals for developing new technological world dominated as it is by chips and semi-conductors. Here information about geological finds in Nigeria are not easily available and this is where the country can depend on India’s cooperation. Thirdly, some of the important industries such as steel and public transport infrastructure including buses, metros and intercity railways are dormant in Nigeria and here labour reforms and strict professional commitment to root out leakages and plunder need to be strengthened.
Nigeria can depend on India in this area, giving effect to some guarantee clauses in the cooperation agreement. This is because, in both steel and public transport, the historical experience has been disappointing. Fourthly, issues relating to defence, military ware and training would also have to figure in the talks. Finally, the cultural and educational exchanges would have to be furthered to improve meaningful cooperation based on mutual trust.
(Dr Parvathi Vasudevan was Reader and Associate Professor in African Affairs, University of Mumbai, and Dr A Vasudevan was Executive Director of the RBI and Special Adviser to the Governor of the Central Bank of Nigeria. They have both lived in Nigeria)