Located in the northwest of Africa, Nigeria is a country rich in natural resources, highlighted in its hydrocarbons, responsible by its oil industry, and also being highlighted by its fertile soil thanks to Niger river, creating an agricultural potential. And when it comes to the agriculture sector, Nigeria is the world’s biggest producer of manioc and yam, reaching the amount of 59,4 million tons of manioc and 47,5 million tons of yam produced in 2018. The productions of sugar cane, cocoa and corn also are highlighted, meaning a considerable part of agricultural production exported to the United States, China and Brazil.
The Nigerian oil company industry is the twelfth biggest in the world and Nigeria is in the global eighth place of oil exportation. Nigeria’s petroleum exports is capable of representing more than 90% of its Gross Domestic Product (GDP), positionating the country as the biggest African economy. Beyond petroleum, the exports of different fossil fuels like mineral coal and natural gas also contribute to the local economic growth. Because of its projection in hydrocarbon international trade, Nigeria got into the Organization of Petroleum Exporting Countries (OPEC) in 1971.
Nigeria is also part of regional integration groups like Sahel-Saara Community States (CEN-SAD) and Economic Community of West African States (ECOWAS) which the foundation happened by the assignment of the Lagos Treaty, the name of the biggest Nigerian comercial center. Both corporations look for the economic growth of the integrant nations and even solve local level conflits.
Brazil is among the main commercial partners of Nigeria. In 2017, for example, Brazil bought US $829 millions of Nigerian liquefied natural gas ( LNG) and sold US $737 in commodities of sugar, tobaco and aluminum strips to the African country. At the same period, Brazil was the sixteenth biggest products provider to Nigeria and its ninth biggest buyer in the world. In 2021, it has been started the exportation of urea to Brazil and even though petroleum production continues to be vital to Nigerian superavit, the fertilizers sector boosted in its manufacturing, being able to surpass oil fuels exports in november of 2021, and it is expected that between march and april of 2022 it will lead Nigerian exports.
To talk more about the economic relations between Brazil and Nigeria, Atlantico had a conversation with ambassador Francisco Luz, Consul General of Brazil in Lagos.
Atlantico – How do you see the current relationship between Brazil and Nigeria, taking into account the political, social and economic aspects ?
Francisco Luz – The relationship is quite cordial in political terms and reasonably intense, including in the military area and in the fight against piracy, which came to affect Petrobras interests in Nigeria. On the economic side, the relationship could be much better, with Brazil being the biggest economy in Latin America and Nigeria the biggest economy in Africa. But the numbers do not reflect this. Economic relations were once very good, but there is plenty of room to work on that.
Atlantico – In 2019, Brazil entered into a partnership with the Nigerian government through the “Green Imperative” agreement, which committed to inserting advanced Brazilian agricultural equipment in Nigeria. Two years later, what is your assessment of the execution of the agreement so far and what is the scenario for the future?
Francisco Luz – This agreement was greatly affected by the pandemic because the signing of the final documentation was going to be done at a meeting between vice-presidents in March 2020 and the trip was canceled because of the impact of covid. All the paperwork is ready and on the desk of the president of the Central Bank of Nigeria. It is a very interesting agreement because it will transfer agricultural mechanization technology to Nigeria and with exports that could reach 1.2 billion in the coming years. The first phase is entirely private, managed by Arab funds through Deutsche Bank which is also in the second phase in communion with an English development bank. BNDES would only enter the third phase if necessary. The project is operated in Brazil by FGV Europa as the incentive comes from Deutsche Bank and is an agricultural mega-project in Brazil after the experiences of the japaneses in Mozambique. And it makes perfect sense that Nigeria sees Brazil as the biggest agricultural power for them!
Atlantico – From your analysis, what is needed for economic growth and social development to go hand in hand in the country?
Francisco Luz – It’s a complex question. The Nigerian economy in its formal GDP is 450 billion and would place the country among the 30 biggest economies in the world, but in terms of purchasing power quality this GDP rises to 1 trillion and then the economy would be among the 25 biggest ones. What explains this difference is informality. At least two-thirds of the economy pay no taxes. So the economy may grow when the government solves this issue of informality and also energy infrastructure. Once these problems are resolved, Nigerian economic growth will thrive.
” It makes all sense that Nigeria sees Brazil as an agricultural potence to them !”
Atlantico – Nigeria is the biggest manioc producer in the world. However, the foreign trade of the product is not so significant. How could a change be made in favor of manioc to increase Nigerian GDP?
Francisco Luz – For foreign trade, I think that manioc will never be relevant. I believe that in less than 10 years the Nigerian population will have 5 million more people than Brazil. And manioc is important for both human and animal feeding, which makes the intern market for manioc so vast. They also use manioc to make a flour that they call “gari” , which is the staple food of the local population. This gari is the most consumed food in the country. In addition, manioc would have a very limited market due to the fact that neighboring countries have the same resources.
Atlantico – It was announced that in June of 2021, Dangote, Nigerian businessman Aliko Dangote’s new fertilizer factory, plans to start urea exports and has Brazil as the main buyer. In your view, what are the gains for both countries in this trade, especially for agriculture?
Francisco Luz – Urea is something specific to relations with Brazil. I have been following trade statistics since my arrival in 2019 and I noticed a monthly growth in urea exports to Brazil. Dangote was not the main supplier of urea in Brazil, which was Indomar. Dangote started exporting urea to Brazil last year (2021) in the second semester and this raised the level of ingerian exports from 15 to 20 million per month to 100 million in November of 2021 and 7 Brazilian states receiving urea as much from Indomar as of Dangote. This movement to import urea from Nigeria started in June of 2021 when some Brazilian importing companies started to take an interest in Nigerian production and I stipulate that in November of 2021 urea was the main Nigerian export to Brazil, surpassing the export of oils fuels. I believe that this leadership of urea in exports will be consolidated between March and April 2022. The potential is great. Dangote’s fertilizer production, for example, is capable of producing a third of the total consumed in Brazil. And they are trying to concentrate all their exports to brazilian market, which will benefit a greater maritime flow.
” I estipulate that in november of 2021 urea was the main Nigerian exports product to Brazil, surpassing the oil fuels exports”
Atlantico – The coronavirus pandemic has impacted the world and damaged several nations with more fragile economies. How has the pandemic impacted Nigeria?
Francisco Luz – Interestingly, despite having a population almost equal to that of Brazil, the pandemic statistics are very low. Nigeria has recorded just over 20,000 cases and 2,900 deaths so far. The World Health Organization (WHO) estimates that, due to lack of testing, these data represent only a tenth of the reality. Even so, a tenth of the reality in Nigeria represents approximately 2 million people in a country with approximately 204 million inhabitants. Some factors explain this picture. The first is that in 2009 there was an Ebola outbreak that mobilized the government to set up a very effective health surveillance system that managed to control the Ebola outbreak in about 90 days. The case even became a movie on Netflix with the movie 93 days. Through this experience, they understood the importance of isolation. And when covid arrived, they closed, for example, the airport and no one entered the country.
” Today, Lagos City represents half of nigerian economics and if the city were a country, it wil be highlighted as the eighth strongest african economy”
Atlantico – How important is Lagos to Nigeria’s foreign trade and ports?
Francisco Luz – Lagos would have 25 million inhabitants today, which places it among the 3 biggest cities in the world and it is expected that it will continue to be the largest by 2050 and reach the number of 100 million inhabitants by 2100. Today, the city of Lagos represents half of the Nigerian economy and if the city were a country, it would stand out as the eighth biggest economy in Africa. Lagos was an island that today has 15 satellite cities. It is the most dynamic area in the country where all companies operate and there you include the banks, headquarters of Brazilian companies and several other instituitions with significant commercial relevance. The harbor of Lagos is one of the biggestst in Africa, one of the most congested in the world and the second most expensive in terms of operations globally. The Nigerian government has granted a concession to a Chinese company and a Dutch operator for the construction of a container terminal that should open this year and that should greatly reduce congestion in the harbor of Lagos and lower costs.
Atlantico – What is your perspective on the future of Brazil-Nigeria trade relations?
Francisco Luz – Our relations need to be a reflection of the greatness of both countries. I believe that Brazil-Nigeria relations go through several issues that speak to historical and cultural factors common to both nations. And these similarities, these links will also influence the economic cooperation between them.
” Our relations must be a reflection of the greatness of both countries”
Text by : César Rodrigues