When Russian president Vladimir Putin closeted with African heads of states at the Sochi resort overlooking Black Sea at the Russia-Africa investment summit, most of the African leaders thought that they were up for a grab. Commitments to invest in their countries had flown like exquisite wines and culinary delicacies served during the summit days. Everyone thought Russia had risen to the league of China, EU and the US. The good old days of cold war during the days of Soviet Union kept in the backburner, African leaders looked forward to have a meaningful relation with the new found Russia and its magnanimity.
Kremlin was liberal in announcements and none of the 54 countries, which attended the meet were left in the lurch. A kitty of US$ 12.5 billion worth of deals were struck in two days. That looked pretty decent and forward looking, having regard to the fact that the two –way trade volume zoomed by 140% in one decade and hit at US$ 20.4 billion in 2018 between the two regions. Debt write off and attractive military deal were added attractions for the debt driven economies of Africa. Nigeria had gobbled up most of the goodies -13 deals in total, which included assistance to the government for restoring existing railways, creating more capacities in the railway system by providing rolling stocks and helping the oil rich country to expand the network with the construction of a line between Port Harcourt and Maiduguri were, among other things, part of the package. Importantly, another MOU was signed between the Nigeria National Petroleum Corporation (NNPC) and Russia’s oil giant Lukoil, for joint working in implementing upstream operations. Commitments were also made to overhaul Nigeria’s non-functioning refineries and to develop huge gas potential and infrastructure.
Egypt has also become a major beneficiary at Sochi. The expanding trade relations between 2017 and now, which has grown to a meaty 37% and a slew of new economic deals prompted Russia to build a nuclear energy plant, which can meet 50 percent of Egypt’s power generation capacity to help the country’s rapidly growing demand for energy. At the summit venue, Putin also announced that Russia was trying to create a free trade area with Israel and Egypt as partners similar to the arrangement it had entered with Iran. Rwanda, Tanzania, Kenya etc also have had their takeaways in various forms and hues. For some, assurances had poured to strengthen their energy sector, by installing nuclear power plants and for others in terms of military aid and still for others promises were in the form of strengthening their infrastructure sector, industrial corridors and the list goes on.
The efforts being made by Russia to enhance its footprint in Africa is an appreciable one and strategically and diplomatically well-calibrated since it needs a strong presence in Africa, which many feel would be the most promising growth hub in the second part of this century. More than that, when Russia is embarking its long term plan to emerge as a third force in the league of US, and China, greater planning is needed to make its presence and to become a power center. It also should have a good voice in multilateral organizations and the UN organizations to emerge as a rallying point to accomplish the task ahead. Africa having 54 votes in most of the multilateral forums including the United Nations, WTO, UNCTAD etc. Russia’s new found magnanimity towards the region can be well understood and appreciated.
But the pertinent point that the benefactors (African countries) should keep in mind is how many projects that Russia started in Africa were taken to the logical end. For instance, Russia’s re-entry in Nigeria’s steel industry has had its flip (flop) side as well. In 1979, during the Soviet regime, when the construction of the project commenced, and investment over US$ 8 billion was made, the work came to a standstill after the government failed to pay the builders. To cut the long story short, not even a single bar was produced in the plant. Will Russia now complete that project is something one has to wait and see.
Nigeria’s is not an isolated case. There are so many other cases, which could not be completed or stopped mid-way due to multifarious reasons. The erstwhile Soviet Union could bear those costs but not its new incarnation –Russia-since it is also beset with many economic problems. Most importantly, Russia now has adopted a market economy where everything has to be justified in terms of return on investments. Will that happen is the trillion dollar question being asked by investment analysts.
