Answer

India and Nigeria, two prominent economies in Asia and Africa, share a strong foundation built on historical ties, substantial trade volumes, and strategic cooperation in sectors like energy and education. With bilateral trade at $7.9 billion, India is Nigeria’s second largest trading partner. However, recent years have seen stagnation in bilateral relations, highlighting the need for a rejuvenated partnership that addresses current challenges and leverages shared interests for mutual benefit.

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Reasons for Stagnation in India-Nigeria Relations

• Declining Bilateral Trade: Despite being a top buyer of Nigerian oil, India’s trade with Nigeria has halved, reducing India to a mere buyer rather than a strategic investor in Nigeria’s energy sector.
  For instance: India lacks significant upstream assets in Nigeria, unlike China, which holds substantial production rights, limiting India’s influence in the sector.
• Sparse High-Level Engagements: Limited diplomatic interactions, with the last Prime Ministerial visit 17 years ago, have weakened political ties, preventing proactive responses to evolving opportunities.
  For instance: The absence of regular Joint Commission meetings limits strategic dialogues on areas like defence and economic cooperation.
• Competing Foreign Influences: Nations like China and Turkey have increased their footprint in Nigeria, particularly in infrastructure and technology, challenging India’s position as a key partner.
  For example: China’s Belt and Road Initiative projects, especially in transport infrastructure, have heightened China’s strategic influence in Nigeria.
• Lack of Economic Partnership Frameworks: The absence of a comprehensive economic partnership agreement limits the potential for trade diversification and industrial collaboration.
  For example: Unlike the India-UAE CEPA, which has boosted trade and investment flows, India and Nigeria have no equivalent agreement to incentivize bilateral investments.
• Nigeria’s Political Instability and Economic Reforms: Recent political reforms, though necessary, have caused economic upheavals that make engagement challenging for Indian businesses.
  For example: President Tinubu’s subsidy cuts and currency devaluation, while crucial for Nigeria’s economy, led to inflation and uncertainty for foreign investors, impacting Indian investments.

Measures to Rejuvenate India-Nigeria Partnership

• Establish Comprehensive Economic Partnership Agreement (CEPA): A CEPA would formalise trade incentives, encourage investment, and reduce trade barriers in sectors like defence and hydrocarbons.
  For example: India’s CEPA with UAE has increased trade flow significantly, a model that could be replicated with Nigeria to boost investments.
• Increase Investment in Nigeria’s Infrastructure: Leveraging India’s infrastructure expertise in transport, education and healthcare to build Nigerian capacity can deepen economic ties and address Nigeria’s developmental needs.
  For instance: By investing in Nigerian transport networks, India can enhance bilateral trade and create goodwill, akin to its role in Ethiopia’s power infrastructure.
• Enhance Defense Cooperation: Expanding defence collaboration through technology transfer, training, and joint military exercises would address Nigeria’s security challenges and promote stability.
  For instance: India’s training of Nigerian military officers could extend to joint operations or shared intelligence on terrorism, strengthening defence ties.
• Leverage Diaspora for Economic Diplomacy: Engaging the 50,000-strong Indian diaspora in Nigeria as cultural and business ambassadors can bridge economic and social exchanges.
  For instance: Indian businesses in Nigeria, like Tata and Airtel, can play a role in cultivating new joint ventures and improving local goodwill.
• Support Nigeria’s Economic Stabilization with Currency Swap Arrangements: Offering a currency swap agreement can mitigate Nigeria’s forex shortage, stabilising trade and benefiting both economies.
  For example: India’s currency swaps with Sri Lanka have eased currency volatility; a similar model could aid Nigeria’s economic stabilisation.

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A rejuvenated India-Nigeria partnership requires strategic, well-aligned steps to overcome stagnation and deepen cooperation. By adopting a multi-dimensional approach involving economic agreements, infrastructure investment, and defence collaboration, India can strengthen its standing in Nigeria. This renewed partnership can enhance mutual growth, stability, and reinforce India’s presence in Africa as a key development partner.

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