Sino-Nigeria Oil-for-Infrastructure Investment Deals: A Proposal for a New Form of Regulation
Date
2022-12-16
Authors
Nwoko, Ngozi S.
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Abstract
This dissertation focuses on the regulation of the Sino-Nigeria oil-for-infrastructure (OFI) arrangements. The OFI investment pacts are quid-pro-quo arrangements between China and Nigeria where the Nigerian government awards oil drilling rights to Chinese national oil companies (NOCs) in exchange for China’s undertaking to build key infrastructure projects such as refineries, railways, airports, seaports, highways, and electricity-generating plants in the host state. Although the use of the OFI, which is an atypical foreign investment model by the Chinese NOCs, fits nicely with the infrastructure gap in Nigeria, it comes with the challenges of opacity and susceptibility to bribery. First, the process of granting concession rights to the Chinese NOCs itself is fraught with opacity, bribery, and unfairness. Second, the state-to-state relations of power that are embedded in the OFI arrangements make it a blurred and unique investment model and complicate its regulation. Third, all the infrastructure projects are being handled by Chinese state-owned engineering and construction firms, some of which have been debarred, at one point or another, by multilateral development banks for fraudulent and corrupt practices in procurement. Since the discovery of oil in Nigeria, bribery of Nigerian government officials by transnational oil companies and opacity in granting oil concessions have been some of the defining features of the country’s oil industry. The existing state-based and uniaxial regulatory model has proved ineffective in regulating bribery and enabling transparency in oil mining licensing exercises. Thus, this dissertation asks: How and to what extent could state and non-state actors and regimes be used as integrated and effective co-regulatory mechanisms in regulating Sino-Nigeria OFI investment arrangements?
This dissertation draws on a triad of legal pluralism, transnational regulation, and Third World approaches to international law as theoretical frameworks as well as an eclectic mix of scholarship from diverse disciplines, specifically law, political economy, and development studies. It draws on a range of data sources to identify the core limitations of existing forms of regulation and then identifies the potential of other regulatory approaches to address corruption, bribery, and other problems associated with the OFI arrangements. This policy-oriented research project posits that a decentred and co-regulatory approach that accepts and incorporates non-state actors such as anti-corruption non-governmental organizations in the regulatory arrangement of the Sino-Nigeria OFI investment deals provides a potential for improving transparency and good governance in the oil industry in Nigeria. The integrated and co-regulatory model will have the state as the preeminent
but not the sole regulator of the Sino-Nigeria OFI investment deals. Nigeria’s political economy landscape and natural resource endowments offer helpful contexts to study China as a major player in economic globalization vis-à-vis its investments in the extractive industries and financing of huge infrastructure projects in Africa. My research reveals that the legal and regulatory issues concerning the Sino-Nigeria OFI deals are noted only spasmodically and tangentially in literature. Therefore, this dissertation contributes to scholarship on regulation and China-Africa studies in that whether or not Beijing’s OFI investments in Nigeria are well-intentioned, there is a strong likelihood that the adoption of the proposed new form of regulation will bring about openness, transparency, and due process in the Sino-Nigeria investment arrangements.
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Keywords
Sino-Nigeria, Oil-for-infrastructure, transnational regulation, Legal pluralism, Third World Approaches to international law, Bribery, Corruption, Investment, Chinese national oil companies, Co-regulation, Non-state actors, Transparency