Prime Minister Narendra Modi’s visit to Nigeria on November 16-17, 2024, marks a pivotal moment to strengthen ties between two nations united by shared challenges and opportunities.
Shared Challenges and Complementary Interests
- Commonwealth Legacy: Both India and Nigeria share a colonial history under the rule of the British Empire, which has shaped their political, social, and economic systems.
| An interesting but lesser-known historical tidbit highlights the first direct bilateral contact between India and Nigeria. A legend traces this connection to around 1500 AD, when Baba Ghor, a gem merchant from Kano (now in northern Nigeria), arrived in Ratanpur in Gujarat. He settled there and became revered as a saint, particularly for devising a method to polish agate stones. |
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- Challenges Faced by Both Nations: Both India and Nigeria are
- Multi-ethnic societies, each navigating the complex challenge of balancing the interests of diverse
- Large developing democracies both are most populous countries on their respective continents
- Other challenges such as improving governance, socio-economic development, combating terrorism, and addressing corruption.
- Complementary Strategic Interests: The two countries also have significant complementarity in key strategic areas:
- Hydrocarbons: Nigeria possesses hydrocarbons (fuel) that India needs.
- Defence: India has a strong defence structure that Nigeria requires.
- Healthcare and Education: India’s robust healthcare and education systems are highly valued and can be leveraged by Nigeria.
- Institution Building: India has expertise in institution building that Nigeria can benefit from.
India-Nigeria Relations
India’s influence in Nigeria is both hard and soft.
- Existing Indian Presence in Nigeria: Currently, there are over 150 Indian companies operating in Nigeria, with an estimated investment of $27 billion.
- With bilateral trade standing at $7.9 billion, India is Nigeria’s second-largest trading partner.
- Indian Diaspora: Nearly 50,000 Indians reside in Nigeria, making up the largest non-African (Oyibo) group in the country.
- They are well-regarded for their professionalism, integrity, and low-profile approach, further strengthening the ties between the two nations.
- Education and Healthcare: Many Nigerians travel to India for trade, medical treatment, and higher education, further solidifying people-to-people connections.
Decline in Bilateral Trade in the Past
Despite these impressive statistics, India’s standing in Nigeria has eroded over the past decade.
- Bilateral trade has halved from its peak, and India, despite being the top buyer of Nigerian crude oil, lacks significant upstream assets in Nigeria’s oil and gas sector.
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- India is merely a buyer rather a partner, producer or an investor.
| Upstream assets refer to the rights and infrastructure related to the exploration, drilling, and production of oil and gas reserves. India does not have rights to produce oil in Nigeria. |
- Reasons: Bilateral interactions have been sparse: the Prime Minister’s visit comes after 17 years, and the last Joint Commission meeting was 13 years ago.
- There is no significant economic partnership agreement between the two countries.
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- Political Courage Under President Tinubu: Nigeria, under President Bola Tinubu, has been taking bold steps to confront its long-standing challenges.
- Petroleum Subsidy Removal: The removal of fuel subsidies has saved the government $10 billion annually, although it has led to public discontent.
- Currency Reforms: The Naira was freed from controls, causing a steep depreciation and 32 percent annual inflation.
- Political House Cleaning: Tinubu dismissed several key functionaries, including the Central Bank Governor, the Head of Secret Service, and military brass, signalling his commitment to reform.
- While these actions have caused short-term economic upheaval and public dissatisfaction, President Tinubu has argued that these measures are necessary for national rejuvenation.
Expectation from India
Nigeria is looking to countries like India for support in different sectors
- Hydrocarbon: Nigeria remains an attractive partner for India due to its role as a major hydrocarbon supplier.
- Infrastructure: Nigeria lacks physical (roads and highways) and social (schools and hospitals) infrastructure and India’s financial assistance could be beneficial.
- Terrorism: Nigeria faces significant challenges, including Boko Haram’s insurgency, the rise of oil bunkering, piracy in the Gulf of Guinea, and a volatile neighbourhood.
- India’s experience in addressing similar challenges can provide Nigeria with valuable lessons, best practices, and opportunities for cooperation.
- Defence: Nigeria anticipates India’s assistance in defence supplies, training, and remote sensing capabilities.
- Benefit for India: This collaboration could not only enhance Nigeria’s defence capabilities but also boost India’s defence exports and strengthen bilateral defence ties between the two nations.
- Economy: One of Nigeria’s urgent needs is India’s assistance in economic stabilisation, as it faces a severe foreign exchange shortage.
- India can opt for a currency swap like it did with Sri Lanka and Maldives or sign a comprehensive economic partnership agreement.
- Other Goods: India can supply a range of goods to meet Nigeria’s needs, including petroleum products, foodstuffs (rice, wheat, milk powder), consumer goods, pharmaceuticals, textiles, agricultural inputs, and power equipment.
- India’s Benefit: Complementarity can be found in imports from Nigeria, such as palm oil, hides and skins, ginger, and gum arabic.
- These initiatives could help reverse the 29.7 percent decline in India’s exports to Nigeria in 2023-24, which fell to $3.6 billion.
| Seven Nigerian Presidents since independence in 1960 have been trained in India as defence officers. |
Way Forward
- Moving Beyond AU: India has traditionally engaged with Nigeria through the African Union (AU).
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- Nigeria is too important for India to send its development assistance only through the African Union.
- Use of Indian Diaspora: India also needs to make better use of its large diaspora in Nigeria, which is the country’s second-largest employer.
- Platform to Private Sectors: Both countries’ private sectors should be better supported through a stronger partnership, with financial backing.
- Export to Nigeria: India’s services exports—including those in Information Technology, banking, financial services, healthcare, and education—also have significant growth potential and should be supported.
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Conclusion
The upcoming Abuja Summit between India and Nigeria offers a unique opportunity to renew and strengthen bilateral ties. With a mix of ambition and sensitivity, India and Nigeria can forge a partnership based on shared values, strategic interests, and complementary strengths.
November 15, 2024
