By Dipo Aliu

The first place to start is Chinese land acquisitions in Nigeria, which is a silent but strategic expansion. In recent years, Chinese entities, both state-owned and private, have been acquiring or leasing land across Africa.

In Nigeria, this trend includes investment in agricultural land for food exports and raw materials; industrial zones near ports and transport corridors (e.g., Lekki Free Trade Zone) and mining sites and strategic reserves.

A critical analysis shows their involvement in opaque transactions. Many of their land deals are poorly documented, lacking transparency, and often exclude community consultation. There is also the issue of displacement and exclusion as local farmers and communities are sometimes displaced without fair compensation or resettlement.

Not to be ignored is existence of legal loopholes as it has been observed that some foreign individuals or companies circumvent indigenes-only restrictions by using Nigerian proxies or local shell companies.

The key question is should land be reserved for Nigerians only? The answer is yes, but with nuance: While land nationalism helps preserve sovereignty, complete exclusion of foreign investors may deter strategic partnerships and FDI. The focus, however, should be on ownership transparency, use regulations, and benefit-sharing mechanisms.

Loan Structuring with China: A Debt Diplomacy Trap?

The current trends are that Nigeria has entered multiple loan agreements with China for infrastructure (e.g., railways, airports, ICT). These loans typically feature: sovereign guarantees, exclusivity clauses (e.g., Chinese contractors only), sevenue-securitisation clauses (e.g., repayment from port or railway income)

Let’s critically analyse the risks. First is the Loss of Sovereign Assets, because default can lead to forfeiture of strategic assets, as seen in Sri Lanka (Hambantota Port). Lack of competitive bidding: Tied aid undermines cost efficiency. Debt Sustainability: A significant portion of Nigeria’s external debt is Chinese, often non-concessional.

Mortgaging the Future? Yes, if unchecked. The long-term impact includes limited fiscal space for future governments, entrenchment of external dependence, economic vulnerabilities tied to single creditor politics and profit repatriation by Chinese firms is a capital flight concern

Today, it has been observed that Chinese companies dominate construction, telecoms, and mining sectors in Nigeria. The profits from these businesses are often repatriated with minimal reinvestment in local communities. Besides, tax avoidance and transfer pricing are widespread through complex supply chain manipulations.

The implications are manifold. For instance, capital flight reduces foreign reserves and undermines the Naira. Another dimension is local unemployment: Many Chinese firms import labor and use few Nigerian suppliers. Last is limited technology transfer as local skills development is minimal.

Policy Recommendations

Nigeria must reclaim its economic sovereignty, by starting with Legislative Reforms. We must amend the Land Use Amendment Act, ban land sales to foreign entities outright or limit to leaseholds with strict time limits. We should also mandate joint venture partnerships with minimum 51% indigenous ownership.

We should also look at our Foreign Investment Regulatory Act which should require public disclosure of foreign ownership and beneficial interest in land/companies and impose community impact assessments before approval.

We must also embark on Strategic Loan Structuring, examine the Debt Transparency Act, mandate National Assembly ratification of all foreign loan agreements and prohibit sovereign asset collateralization without parliamentary approval. We also need a sustainable borrowing framework, ensure we benchmark loans against debt-to-GDP thresholds, and diversify creditors and explore multilateral concessional finance.

To stem capital flight, we need Capital Retention Measures, first is by establishing Mandatory Reinvestment Thresholds which will require local reinvestment of minimum percentage of annual profits.

Another strategy is Capital Controls on Repatriation which will ensure tiered repatriation limits based on compliance with CSR, tax, and local content rules, in addition to Anti-Transfer Pricing Enforcement and strengthening the Federal Inland Revenue Service (FIRS) to detect illicit financial flows.

Finally, we need to promote economic nationalism and capacity building, address the National Sovereignty Fund, pool resource rents and external loan proceeds into a transparent, future generations fund and ensure Local Content Development, by tying foreign investor licenses to mandatory skills transfer, infrastructure investment, and use of local inputs.

Nigeria must decisively pivot from passive host to strategic steward of its land, resources, and economic destiny. While Chinese investment can catalyze development, it must be reshaped through law and policy to serve national interests-now and for generations to come.