Japan's Relations with Nigeria, 1960-1985
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LONDON SCHOOL OF ECONOMICS (UNIVERSITY OF LONDON) THE POLITICAL ECONOMY OF NORTH-SOUTH RELATIONS: JAPAN'S RELATIONS WITH NIGERIA, 1960-1985 by Aloy Chinedu Chife Thesis submitted in fulfilment of the requirements for the Degree of Doctor of Philosophy in International Relations. London, 1992 UMI Number: U615775 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U615775 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 f eT 5><5X x a i | 6 TABLE OF CONTENTS Page ABSTRACT ACRONYMS ACKNOWLEDGEMENTS INTRODUCTION 1. Methodology 1 2. Literature Review and Theoretical Approach 3 3. Outline of Chapters 18 Endnotes 24 CHAPTER ONE; PRELUDE TO MODERN RELATIONS 1. Prelude to Modern Relations 30 Endnotes 55 CHAPTER TWO; NIGERIA—JAPANESE TRADE, 1960-1985 1. Introduction 60 2. Japanese trade and investments in Nigeria, 1960-1985: The trends, features and noticeable patterns 63 3. An analysis of the early annual trade between Nigeria and Japan, 1960-1962 75 4. Nigeria-Japanese trade 1963-1965: The years of conflict and confrontation 85 5. Nigeria-Japanese trade, 1967-1970: The years of uncertainty and immobility 98 6. Some noticeable features and an evaluation of policy in the decade, 1960-1970 108 7. The modern phase of Nigeria-Japanese trade relations: The first phase 1971-1976 - the years of gradual progression 113 8. The second phase 1977-1982: The years of accelerated growth 124 9. Economic slump and the decline of trade, 1983-1985: The surviving trend 138 Endnotes 142 CHAPTER THREE: JAPANESE FOREIGN CAPITAL AND THE NIGERIAN ECONOMY. 1961-1983 1. Introduction 153 2. The Political Economy of Capital Transfers in North-South Relations 154 3. The Pattern of Investments 160 4. Natural Resources as a Critical Determining Factor in Japan's Capital Transfers, 1970-1983 174 5. Japanese Private Capital and Nigeria's Development Plans, 1977-1982 191 Endnotes 205 CHAPTER FOUR: EXPORT PRODUCTION. COMMERCIAL POLICY. POLITICAL FACTORS AND THEIR EFFECT ON TRADE DISPARITY 1. Introduction 211 2. The Failure of External Policy and Agricultural Exports 214 3. Trade and Investment Policy 235 4. Corruption and the Effect on Trade 238 Endnotes 240 CHAPTER FIVE: JAPAN'S AID AND THE DEVELOPMENT OF RELATIONS 1. Introduction 246 2. Alternative Models of Japanese Aid 249 3. Official Japanese Aid Policy 253 4. Africa in Japan's Aid Policy 256 5. Japan's Aid to Nigeria 2 60 6. The Relationship between Japanese Aid and Japanese Private Interests in Nigeria 271 Endnotes 278 CHAPTER SIX; FORM AND SUBSTANCE IN THE CONDUCT OF NIGERIA AND JAPAN RELATIONS 1. Introduction 283 2. The Place of Japan in Nigeria's Foreign Policy 285 3. Japan's Africa Foreign Policy 290 4. Japan's Response to the Nigerian Civil War 299 5. Japan's Response to African Issues Affecting Nigeria (i) Japan and Apartheid in South Africa 302 (ii) Japan and African Nationalism 314 Endnotes 325 CHAPTER SEVEN; CONCLUSION 1. Theoretical Significance of the Thesis 331 2. Problems of Japan-Nigeria Relations 342 3. Managing the Japan-Nigeria Relationship 349 Endnotes 363 APPENDIX 367 SELECTED BIBLIOGRAPHY 407 LIST OF TABLES FIGURE 1 (i) Japanese Imports of Piece Goods - Selected Years 37 (ii) Total Imports of Cotton Piece Goods, 1957 47 (iii) Japanese Shipping Services to Nigeria, 1939 47 (iv) Nigeria-Japanese Trade, 1934-1960 367 (v) Japanese Share of Nigeria's Total Trade, 1929-1932 367 (vi) Percentage Share of Total Imports, 1934-1939 367 (vii) Average Percentage Share of Imports, 1950-1959 (Japan) 367 (viii) Percentage Share of Total Imports, 1946-1060 (United Kingdom) 368 FIGURE 2 (i) Nigeria-Japanese Trade, 1960-1984 369 (ii) Japan's Exports of Automobiles, 1971 114 (iii) Japanese Automobiles Imported by Nigeria, January-June 1980 133 (iv) Index of Export Performance Nigeria-Japan, 1960-1985 394 FIGURE 3 (i) Japanese Investments in the Nigerian Economy, 1960-1983 395 (ii) Comparison of Six Developing Countries 171 (iii) Japan's Imports of Nigeria's Oil, 1971-1985 179 FIGURE 4 (i) Nigeria-Japan Trade, 1960-1985 (Value of Total Trade) 401 (ii) Japan's Share of Nigeria's Trade as Percentage of Total Trade 402 (iii) Direction of Nigeriafs External Trade, 1960-1984 - Imports by Regional Groupings as Percentage Total Value of Imports 403 (iv) Direction of Nigeria's External Trade, 1960-1984 - Exports and Re-Exports by Regional Groupings as Percentage of Total Value of Exports 404 (v) Japan's Share of Nigeria's Trade as Percentage of Total Non-Oil Exports, 1970-1983 405 (vi) Export Commodities in Nigeria's External Trade, 1960-1984, as Percentage of Total Value of Exports 406 FIGURE 5 (i) Japan's ODA Disimbursements to Nigeria by Classification, 1960-1985 261 (ii) Loan Assistance (Yen loans) 263 FIGURE 6 (i) Japan's dependence ratio on South African minerals 308 ABSTRACT This thesis argues that the explanation for underdevelopment should be sought primarily in the structural distortions of the domestic economy, the incoherence of national interests, as well as other internal political contradictions. By looking at the dynamics of Japan's relations with Nigeria between 1960 and 1985, it seeks to demonstrate how these factors militate not only against a beneficial interchange with a Northern economy, but against effective participation in the international economy. This constitutes a contrary diagnostic position to the literature which underpins the logic on which The Bretton Woods and Dependency Schools of thought are based. The thesis considers the following issues. First, it critically examines the role of the trading pattern, characterized by its vertical structure, along with trade policies, in the relationship between Nigeria and Japan. Secondly, it considers whether Japanese investments in Nigeria have contributed to the growth and development process in Nigeria. To that extent it considers whether they were merely part of a calculated trade objective; namely, the dominance of certain sectors of the Nigerian economy. The thesis also examines the role played by Nigerian domestic policies and its environment in determining the degree of reciprocity and interdependence. Finally, it seeks to assess the role played by Japanese aid and the degree of importance attached to Nigeria in particular and development issues in general in Japan's foreign policy. The thesis concludes that at the time of Nigeria's independence, the relationship was potentially one of interdependence and the explanation for any subsequent asymmetry needs to be sought in government's failure to mobilize national potential and in terms of the operation of the international market economy. At issue is not just the nature of a particular bilateral relationship but the management of North-South relations. ACRONYMS BPD = Barrels per day CBN = Central Bank of Nigeria EXIM = Export and Import Bank of Japan IMF = International Monetary Fund ISI = Import Substitution Industrialisation JETRO = Japan External Trade Organisation LDC = Less Developed Countries MITI = Ministry of International Trade and Industry (Japan) N = Unit of Nigeria currency, the Naira NAFCON = National Fertilizer Company of Nigeria NEPA = National Electric Power Authority (Nigeria) NIC(s) = Newly Industrialised Countries NNPC = Nigerian National Petroleum Corporation OAU = Organisation of African Unity ODA = Overseas Development Assistance OECD = Organization for Economic Cooperation and Development SITC = Standard International Trade Classification (United Nations) ACKNOWLEDGMENTS In the years that I undertook the research work for this thesis, certain individuals and organisations have been indispensable to its successful completion. The following persons/organisations are hereby acknowledged. My depth of gratitude goes to The British Foreign Office which provided me with a scholarship with which to undertake the study. I wish to particularly thank Professors James Mayall and Michael Leifer, my supervisors who went out of their way, on certain occasions at great inconvenience, to direct me in an atmosphere of understanding and robust intellectual tradition. I also wish to express an immense gratitude to Geraldine Miric and Elaine Childs who helped with the typing and wordprocessing. Also to the aforementioned, and Judy Jones and Elizabeth Leslie for their friendship and encouragement which was a constant spring of inspiration for me. My appreciation also to Kweku Ampiah for suggesting LSE ; to Caroline Froud for reading the original text; to Mr. B. Hickman of SOAS; Stefan Rogers of the British Council; Pedro Fernandes, Yemi and Leke Oni and all my friends - especially the members of Amnesty International, the UJS, the Catholic Society, the International Political Economy/Africa Workshop group, and everyone else for their support. I thank you all. "In popular and political discussions, the economics of development often degenerates into the economics of discontent". G.M. Meier, economist, 1968. "Let us help one another to find a way out of Darkest Africa. We must emerge from the backwoods and come into the open where nations are made". R.S.B. Attoh-Ahuma, Gold Coast (Ghana) nationalist, 1911. DEDICATION TO GOD 1 INTRODUCTION In analyses of economic and political relationships between the under-developed world and the Western economies, the overwhelming weight of interpretation has been informed by the theory of Dependency. This theory claims that less developed countries are trapped in a web of economic disability because of the inherent nature of the relationship between developed and under-developed states.1 As one African writer has asserted "dependency theory is of great relevance to the study of African international relations".2 This thesis proceeds on the basis of an alternative view.