Recently, PM Narendra Modi visited Nigeria for the first leg of his three-nation tour. The discussion between PM Modi and Nigerian President Bola Ahmed Tinubu focused on further strengthening of the India-Nigeria strategic partnership in sectors like defence, technology, health, and education. India has extended 20 tons of humanitarian aid for Nigerian flood victims. President Tinubu acknowledged India’s efforts to amplify the concerns of developing countries through the Voice of the Global South Summits. PM Modi was conferred Grand Commander of the Order of the Niger, Nigeria’s national award. India-Nigeria Relation
What has been the history of engagement of India with Nigeria?
India and Nigeria enjoy warm, friendly, and deep-rooted bilateral relations. The two nations have been close partners for more than 60 years.
India, with a population of 1.3 billion, and Nigeria, over 190 million, are large developing and democratic countries with multi-religious, multi-ethnic, and multilingual societies. India as the largest democracy in the world and Nigeria as the largest in Africa, have become natural partners.
| 1958 | India’s first diplomatic mission in Nigeria opened in 1958. India opened its mission two years before the latter country formally gained independence from the British rule |
| 2007 | The ties between India-Nigeria were elevated to the status of a “strategic partnership” when then prime minister Dr. Manmohan Singh, PM Modi’s predecessor, visited the African state in October 2007. |
What are the areas of cooperation between India and Nigeria?
1. South-South Cooperation- Both India and Nigeria have been cooperating in the multilateral organizations like the United Nations, G77 and NAM by articulating the voice of the developing world in a coordinated and effective manner.
2. Defense Cooperation- India has been providing training, capacity building & supplying defense equipment to the Nigerian defense forces. For ex- The National Defense Academy at Kaduna exemplifies this cooperation.
3. Development Cooperation- India has supported Nigeria’s capacity-building efforts under the Indian Technical and Economic Cooperation (ITEC) Programme since 1964. India has also extended Lines of Credit worth $30 million for a gas-fired turbine electricity generation station in Cross River State of Nigeria.
4. Economic Cooperation- Nigeria is India’s largest trading partner in West Africa and India’s investment in Nigeria is around $20 billion.
5. India Nigeria Energy Cooperation- Nigeria is one of the leading suppliers of crude oil to India. Nigerian oil exports contribute to about 12% of India’s oil imports.
What are the challenges in India-Nigeria Relations?
1. Declining Bilateral Trade- The Bilateral trade volume between Nigeria and India has fallen from US$ 14.95 billion in 2021-22 to US$ 11.8 billion in 2022-23, due to a decrease in the volume of oil purchase from Nigeria.
2. Lack of significant upstream energy assets- India remains a mere buyer rather than a strategic investor in Nigeria’s energy sector. India lacks significant upstream assets in Nigeria, unlike China, which holds substantial production rights.
3. Sparse High-Level Engagements- The absence of regular Joint Commission meetings limits strategic dialogues on areas like defence and economic cooperation. Further limited diplomatic interactions at the level of heads of states (with the last Prime Ministerial visit 17 years ago) has weakened political ties.
4. Increasing Chinese footprint- The increase in Chinese footprint in Nigeria through the Belt and Road Initiative projects, is challenging India’s position as a key partner in Nigeria.
5. Lack of Economic Partnership Frameworks- The absence of a comprehensive economic partnership agreement has limited the potential for trade diversification and industrial collaboration.
6. Nigeria’s Political Instability and Economic Reforms- Recent political and economic reforms like President Tinubu’s subsidy cuts and currency devaluation, has created uncertainity and has impacted the Indian investments.
What can be the future areas of cooperation between India and Nigeria?
1. Defense and Security- Nigeria faces security challenges like Boko Haram, piracy, and oil theft. India can offer defense supplies, training, and remote sensing technology to tackle terrorism (e.g., Boko Haram) and piracy in the Gulf of Guinea. Seven Nigerian Presidents since 1960 were trained in India as defense officers.
2. Economic Stabilization- Nigeria faces foreign exchange shortages and inflation (32%). Strategic initiatives such as partnerships in hydrocarbon sectors and infrastructure development can help stabilize Nigeria’s economy. India can offer large financial facilitations and consider barter arrangements to ease Nigeria’s foreign exchange shortage.
3. Trade Enhancement- India can increase exports to Nigeria, including essential commodities like pharmaceuticals, foodstuffs, and textiles. India should also explore the potential for rupee-based trade to boost bilateral trade from the current $7.9 billion.
4. Capacity Building- India should offer its expertise in IT, healthcare, and education to support Nigeria’s infrastructure and human resource development.
What should be the Way Forward?
1. Establishment of Comprehensive Economic Partnership Agreement (CEPA)- A CEPA will encourage investment, and reduce trade barriers in sectors like defence and hydrocarbons.
2. Currency Swap Arrangements- Currency swap agreement can help in mitigating Nigeria’s forex shortage, will help in stabilising trade between the two economies.
3. Increased Investment in Nigeria’s Infrastructure- India should invest in Nigerian transport networks like the Ethiopian power infrastructure.
4. Leverage Diaspora potential- Engaging the 50,000-strong Indian diaspora in Nigeria as cultural and business ambassadors can bridge economic and social exchanges.
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