China captures Niger’s oil by replacing the West

China’s CNPC has made a $400 million deal with the government of Niger. And the West is moving further and further away from Africa. China’s strategy, which has been winning on the Dark Continent for a few years now, so much so that it has undermined the European Union as its main economic partner, continues to focus on energy and infrastructure and is meeting the favor of an increasing number of states. Particularly those like Niger, which are ruled by a coup junta and have severed ties with the international community—that is, the community of nations with democratic governments—and so urgently need to find new partners.

Beijing, in short, consolidates its leadership in Africa: in sub-Saharan Africa, in the first half of 2023 alone, it would invest more than $4 billion. Now, however, it must resolve a dilemma. It must determine, explains Marco Di Liddo, director of CeSI, the Center for International Studies, whether its presence should be only economic or expand to the military. For the moment, it has only one base, in Djibouti, but is planning to build at least one more on the Atlantic.

What role does the Chinese-Nigerian agreement have in the marketing of oil?

It has economic and political significance that should not be underestimated. It is a classic Chinese-style deal: Beijing will offer a $400 million loan that the Nigeris will pay back in 10 to 12 years, with 7 percent interest, from oil revenues. Niger produces 20,000 barrels a day but wants to increase production tenfold by 2026. It will do this by leaning on the Chinese and exploiting the Agadem Basin, discovered in the 1970s but whose true potential has only recently been realized.

Why did the Chinese set their sights on Niger in particular?

China took the initiative because Niger’s coup junta has difficulty talking to other investors. The agreement is not only about production and exploration but also about marketing the oil: the Chinese will make sure to export it through the pipeline running from Benin to Cotonou, which they themselves built. The understanding also includes an increase in refining capacity at the Zinder plant.

An arrangement that will increase Niger’s geopolitical importance in the area?

The refined product will be mainly for the local market and for Mali, Burkina Faso, and Chad. The junta will then have a huge cash flow to improve its military capabilities, fight rebels and terrorists, and strengthen its power. The money will then be distributed among the various clans and potentates—a way for the government to ensure the stability of its role in the years to come. Refining also strengthens the economic axis between countries ruled by military juntas, with an anti-Western, anti-Eco front and close to Russia and China.

China’s presence in Africa is mainly related to infrastructure building. But it also turns to energy. How has Beijing’s policy changed in recent years?

Initially, Chinese penetration was based on three sectors: the first was the extraction of raw materials, then came major infrastructure (airports, ports, and highways), which were functional in improving the ability to export and then send oil and raw materials to China. This was accompanied by social investments to balance the deal: hospitals, renovated neighborhoods for the middle class, and authorities in individual countries. Finally, there was a shift to investing in infrastructure, but with a greater focus on returning to the land.

Then how did the Chinese approach evolve?

China believes that Africa should be a market for the purchase of its products and for the relocation of some of its companies, bringing low- and medium-tech industries to the territory. It has proceeded in this way in countries such as Nigeria and Ethiopia, with the construction of industrial parks or free trade areas with high tax exemption, where to relocate companies that do food processing or consumer goods production. The line that unites all this is unscrupulousness from the political point of view: China does not demand respect for human rights; it just wants to do business and maintain stability in the countries where it acts. There was a slowdown in investment at Covid, but now they are picking up again.

Is Beijing only thinking about its economy, or does it have other goals as well?

It needs to figure out whether a policy of economic penetration alone is sustainable or whether it needs to offer a somewhat more widespread military presence. At the moment, China has a base in Djibouti to secure shipping between the Indian Ocean and the Mediterranean, but it is thinking of building one on the other side of the continent, on the Atlantic Ocean, in the Gulf of Guinea. However, it will not be an immediate thing; it takes vision, which is necessary to project its military capability abroad.

But where is China present in Africa, and in what areas?

Everywhere. It started in the 1950s, mainly in southern Africa, in Mozambique, and in Angola, where there were guerrilla movements that could collaborate with the Chinese Communist Party. Then, in the mid-1980s, the Soviet withdrawal opened up opportunities. China replaced the USSR as the preferred interlocutor, taking advantage of being able to present itself as a nation without a colonial past and selling itself as a developing country.

Is China’s presence now predominant over that of Westerners? If one were to rank Africa’s economic partners, would the Dragon be in first place?

Yes, in first place, after that, in terms of trade interchange and funds sent, would come the European Union, then the Gulf monarchies (Saudi Arabia, the Emirates, and Qatar), the U.S., and Russia.

Niger is laying the groundwork for a deal with Iran involving uranium. Does the resourcefulness of Russia and China go hand in hand with that of their allies in Tehran?

Iran has been following its African policy for decades, an alternative to Chinese and Russian policy. It is the West’s withdrawal that gives it the best chance, but it did not arrive in Africa yesterday. Iran is struggling to break out of international isolation, and here it is looking for shores to break this isolation. The agreement with Niger on uranium is preliminary; the Iranians, engaged in a major nuclear program, want an alternative source of supply, although Niger’s contribution is not decisive. Niamey is in the top ten countries with uranium, and its political situation creates favorable conditions for an economic agreement.