Sunday, January 31, 2010

Sinosure & Nigeria: the elusive $50 billion

On April 2, 2008, China-Africa watchers read in the Financial Times that Sinosure (China Export & Credit Insurance Corporation, Beijing's export finance insurance agency) had told Nigerian officials that it was ready to provide $50 billion in export insurance for exports or projects in Nigeria. This figure has been repeated often, including recently in an article in Africa-Asia Confidential, where it figures among the "unmet promises" for China-Africa relations. What's the likely reality of this story? Here's some evidence. For all of 2007, Sinosure provided $39.6 billion in export insurance worldwide. This rose to $62.7 billion in 2008, according to their 2008 Annual Report. Almost all of this was insurance for short-term export credits, including suppliers' credits. Does it seem likely that after providing $39.6 billion in 2007 across the world, Sinosure would offer to provide $50 billion, just for Nigeria, in 2008? When I was in Nigeria in May 2009, I asked at the Nigerian Ministry of Finance, the IMF resident office, and the Nigerian embassy about this "$50 billion" Sinosure "pledge", only to be met by bafflement. None of them had even heard about this tale. It continues, however, to circulate around cyberspace with a robust life of its own.

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