Niger and China Sign $400 Million Crude Oil Deal Amid Sanctions Recovery

Niger and China sign $400M oil deal, providing a lifeline to Niger's military rulers as they recover from regional sanctions. The deal highlights China's growing influence in Africa and Niger's shift towards China and Russia.

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Nasiru Eneji Abdulrasheed
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Niger and China Sign $400 Million Crude Oil Deal Amid Sanctions Recovery

Niger and China Sign $400 Million Crude Oil Deal Amid Sanctions Recovery

Niger and China have signed a $400 million crude oil memorandum of understanding (MOU) that will provide a financial lifeline to Niger's military rulers as the country struggles to recover from the impact of regional sanctions. The deal was signed between Niger's Prime Minister Ali Mahaman Lamine Zeine and the CEO of China National Petroleum Corporation (CNPC), Zhou Zuokun.

Under the agreement, the Chinese company will advance the loan, oil to help Niger meet short-term obligations. The loan will be repaid with crude oil shipments within 12 months at an interest rate of 7%. Chinese ambassador Jiang Feng has been leading the negotiations, and the deal is seen as a demonstration of the "friendship and fruitful cooperation" between the two countries.

Why this matters: The deal comes at a pivotal time for Niger, which is still recovering from West African sanctions and reduced Western engagement following a military coup last year. It highlights China's growing influence and economic ties in Africa, particularly in resource-rich nations.

Niger has been producing 20,000 barrels of oil per day from the Agadem Rift Basin, but until now, it has primarily been used domestically due to border restrictions and sanctions. However, these sanctions have now been lifted, allowing Niger to start exporting its oil using a 2,000 km pipeline built by PetroChina, a subsidiary of CNPC.

Critics argue that such resource-backed deals increase countries' vulnerability to debt. However, Niger's Prime Minister stated that the funds will be managed transparently and prioritized for strengthening the country's defense and security, as well as financing investments in agricultural development and improving medical services.

In addition to the oil deal, Niger has been moving closer to China and Russia in recent months. Russian military equipment and instructors have arrived in the country, signaling a shift in Niger's geopolitical alliances.

The loan, oil between Niger and China provides a significant financial boost to Niger's military government as it maneuvers the challenges of recovering from regional sanctions. Prime Minister Zeine emphasized that the funds will be used to support Niger's security, agriculture, and healthcare sectors. The deal also paves the way for Niger to begin exporting its crude oil internationally, with the first shipments expected to begin in May 2024 via the Niger-Benin pipeline, largely financed by China.

Key Takeaways

  • Niger and China sign $400M crude oil MOU to aid Niger's military rulers.
  • China to provide loan to Niger, repaid with oil shipments within 12 months.
  • Deal highlights China's growing influence and economic ties in resource-rich Africa.
  • Niger to start exporting crude oil internationally via China-financed pipeline in 2024.
  • Niger moves closer to China and Russia, signaling shift in geopolitical alliances.