|The team at the Ogun Guangdong Free Trade Zone|
The China Africa Research Initiative (CARI) at the Johns Hopkins School of Advanced International Studies (SAIS) connected two teams of SAIS International Development Program students to organizations in Africa for their 2015-2016 practicum course. In this guest post, the team of students who consulted for the Ogun-Guangdong Free Trade Zone in Nigeria reflect on their experience. Support for the practicum was provided by a grant from Carnegie Corporation of New York and the Starr Foundation.
By Andrew Caruso, Danielle Nesmith, Teresa Peterburs, Egle Vilkelyte
“When we ask locals where China is, they point down the road to the zone,” said John Xue, COO for the Ogun-Guandong Free Trade Zone in Igbesa, Nigeria. China’s presence in Africa is growing through a number of vehicles, not the least of which are sizeable investments in special economic zones across the continent. The use of special economic zones as conduits for global economic integration and growth is familiar for China, having pioneered the transformative change of SEZs on their own domestic economy for several decades. The application of the SEZ strategy to the African context, however, has produced mixed results by most accounts. As part of the International Development practicum program, an intrepid team of SAIS students spent two weeks inside the Ogun-Guandong Free Trade Zone (OGFTZ) to understand the political, social and economic implications of the China-Africa SEZ strategy.
The Ogun-Guandong Free Trade Zone partnership began in the mid 2000s between China’s Guandong province and Nigeria’s Ogun state government. Located roughly 30 kilometers outside of Lagos, the OGFTZ was positioned to take advantage of one of Africa’s largest and fastest growing economies. Yet, hampered by a number of infrastructure and management challenges, performance of the OGFTZ in its early years was disappointing, and through a series of transitions, a new management team took control of operations in 2012. Now, as the zone’s majority owner and operator, the privately-owned Zhongfu Management Company represents an outlier for Chinese investment in Africa away from state-owned-enterprises and toward private industry. The novelty of the zone’s management model is further underscored by its recent performance – the OGFTZ has rebounded from a potential shut-down to its current position as one of the country’s most successful zones. One customs official indicated that customs duties have increased nearly 1000-fold since the time of management transition from 500,000 NGN in annual customs duties to over 500 million NGN.