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Shift in Geopolitical Relations: Russia’s Roadmap to Nigeria, ECOWAS and Africa

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Nigeria Russia

By Professor Maurice Okoli

The growing US-China rivalry and Russia-Western allies’ geopolitical tension have shaken the international peace and security system’s foundation and significantly shaped Russia’s diplomacy with Africa. While that seems to be the general trend across the board, the Federal Republic of Nigeria is also getting highly renewed attention from Moscow. Historically Nigeria, like a number of African states, has had relations from the Soviet times and still maintains traditional relationships after the Soviet’s collapse in 1991. Nevertheless, it is interesting to explicitly note that a new wave of democratic change has also blown all over Africa. We can convincingly point to the fact that old ideological friends of the Soviet Union changed camps and transformed in favour of the capitalist-democratic model, in line with the changing political dynamics inside Africa and around the world.

In practical terms, the Soviet Union offered enormous assistance during the decolonization process of African countries in the late 1950s and early 1960s, and the Kremlin’s policy, at that period, for the newly liberated African countries included:

    To gain a lasting presence in the African continent,

    To have a voice in African affairs,

    To undermine Western influence in the African continent by equating capitalism with imperialism, and

    To keep communist China out of the African continent.

In pursuit of its foreign policy agenda, the Soviet Union maintained diplomatic relations between Nigeria and many on the continent. There were 48 diplomatic offices across Africa. Nigeria established diplomatic relations on November 25, 1960, after it had attained political independence from Britain. The mission was formally opened in 1961.

There are noticeable bits of historical landmarks between Nigeria and Russia. Olusegun Obasanjo visited Russia in 2001. That was followed by Muhammadu Buhari in 2019. However, in June 2009, Dmitry Medvedev, president of Russia, visited Nigeria for the first time and held topmost state-level talks on possible nuclear energy, oil exploration and military cooperation. There were talks also focusing on establishing a petrochemical plant in Nigeria. There was also a declaration on principles of friendly relations and partnership between Nigeria and the Russian Federation.

Russia’s second-largest oil company, and privately controlled Lukoil, has gone back and forth these several years with plans to expand its operations in Nigeria and several West African countries. There has been a long-dead silence after Gazprom, the Russian energy giant, signed an agreement with the Nigerian National Petroleum Corporation (NNPC) on the exploration and exploitation of gas reserves with a new joint venture company known as NiGaz Energy Company.

Despite the complexities and obstacles, Nigeria is still high on Russia’s agenda for reviving multifaceted business ties, at least to share the market and take up opportunities similar to external players such as the United States, Europe and China. We sincerely acknowledge efforts by Russians now gearing up to revamp the Ajaokuta Iron and Steel Complex, which was abandoned after the collapse of the Soviet Union three decades ago, and further take up energy, oil and gas projects in Nigeria, as well as facilitate trade between Nigeria and Russia.

Further to the above, there could be specific points of focus in the current relations: The strategic point of convergence between Moscow and Abuja is stability in the West African region, which is vital for both countries in their interests. It could best be achieved through ensuring security, boosting economic development, expanding tentacles in energy and infrastructure projects and raising cooperation with the regional bloc – the Economic Community of West African States (ECOWAS).

Suffice it to say that Russia’s passion for humanitarian cooperation is strongly recommended here. This will help sustain its traditional sphere of influence in the western region of Africa. The main reasons are that Nigeria is considered the economic powerhouse. Ghana now hosts the headquarters of the African Continental Free Trade Area (AfCFTA), spanning 54 states over the next years with the potential to unite more than 1.3 billion people in a $2.5 trillion economic bloc. It has the potential to generate a range of benefits through supporting trade creation, structural transformation, productive employment and poverty reduction. The AfCFTA opens up more opportunities for both local African and foreign investors from around the world.

Both African and foreign policy experts argue that African countries need to support meaningful dialogue and take steps toward addressing the economic dimensions in the continent, and this must necessarily reflect in their relations with potential external partners while, at the same time, maintaining their territorial integrity and political independence. We strongly believe that African economic diplomacy and partnerships could be raised to appreciably new levels the Russia-Africa relations. This is where I shared my views with both foreign and our African experts that these measures will contribute tremendously, in pursuit of the economic integration of our continent, towards the attainment of the well-known vision: Agenda 2063, the Africa We Want.

Egypt, Nigeria, and South Africa are the biggest economies on the continent, and Nigeria, for example, plays a major role in the West African region. The Nigerian economy is based on private enterprise, but the state participates in many ways. That is why Russia has to redirect its focus to the private sector to enhance its economic profile. In this case, Nigeria, Ghana, Cote d’Ivoire (Ivory Coast) and other countries have enormous potential to cooperate with Russia in the West African region. According to reports, on different occasions, former Vice President Yemi Osinbajo expressed keen interest in developing bilateral cooperation and spoke frankly about the need to increase the presence of Russian companies in Nigeria.

Three key factors are at work here for Russia to get a foothold in West Africa. First, Russia is seen as the provider of security, and Russia’s defence capabilities continue to play a crucial role in maintaining stability in the region. One more point here is the French-speaking Sahel-5 (Burkina et al.) is nearly under the control of Russia. Reports pointed out that cooperation among forces from the so-called G5 countries – Burkina Faso, Chad, Mali, Mauritania and Niger – remains difficult given the anti-French sentiments in the country, forcing under-equipped local armies to quickly step up their game against Islamist rebels in the volatile Sahel region.

With high interest, Russians are consistently pushing for military-technical cooperation. For Nigeria, Russian military equipment supply could be a high-value addition to the fight against the notorious Boko Haram, which threatens West African states. Many experts say conflict resolution should be coordinated and undertaken within the framework of multilateralism, which, of course, falls within Russia’s interest in forging relations with respective Security Councils of ECOWAS, the African Union and the United Nations.

Second, an opportunity to have market access to the West African region if potential Russian investors decide to locate some kind of production with the rules and regulations put in place under the African Continental Free Trade Area (AfCFTA). Unlike Russia, United States investors look forward to exploring several opportunities in the African Continental Free Trade Area (AfCFTA), a policy signed by African countries to make the continent a single market. Russian investors could similarly pursue public-private partnerships that support Russian and African businesses, including women-owned and led Small- and Medium-Scale Enterprises (SMEs).

Third, to carefully look at optional ways of utilizing civil society and private sector organizations. If Russia wants to play a pivotal role in advancing its economic influence, it has to navigate, leverage or make inroads into the private sector. Understanding these factors is crucial in formulating policies and appropriate mechanisms for realizing them. Worth to say that efficiency and effectiveness must reflect in its policy implementation. On the other hand, the shifting geopolitical landscape dictates new refined strategies. It also implies the ability to choose the multi-alignment dimension of countries rather than just dealing with a few in the region.

Notwithstanding multiple challenges with pursuing general policy goals in Africa, I would also note here in this article that Russia has maintained a traditional friendship, particularly with Nigeria and broadly with West Africa, so it is important that some focus be given to issues raised here at the forthcoming Russia-Africa summit. The critical focus areas are agriculture, energy, oil and gas, telecommunications, healthcare, transport, financing, marine exploration, aerospace, and other areas where Russian technology can have a comparative advantage.

Many Russian companies such as Lukoil, Gazprom, Rosatom and Rosneft are some of Russia’s energy and power industries actively engaged in Nigeria, Egypt, Angola, Algeria and Ethiopia. It must be stressed that in 2018, “Nigerian oil and gas Exploration Company Oranto Petroleum announced that it would be cooperating with Russia’s largest oil producer, Rosneft, to develop 21 oil assets across 17 African countries.” Unfortunately, this has not materialized due to Rosneft’s lack of interest in doing business in Africa. Additionally, Russian Rosatom has signed nuclear energy agreements with 18 African countries, including Nigeria, Egypt, Ethiopia and Rwanda, to address the power needs of those countries.

The Russian strategic policy interest in Africa and given the strong limitation of its current capability, according to Paul Stronski, one-time Senior Analyst for Russian domestic politics for the U.S. State Department Bureau of Intelligence and Research, “in many respects, Russia’s re-emergence in Africa, is an earnest attempt to resume relations where they were left when the Soviet Union departed the scene.” Paul Stronski further argues, “In sub-Saharan Africa, Russia’s priority is on exploiting new commercial opportunities and securing diplomatic support for its positions in multilateral institutions.”

The trade volume between Russia and Africa was $ 14.5 billion annually in 2020. However, this figure pales insignificance when compared with China, whose trade with Africa has attained $ 165 billion per annum during the same period and $ 254 billion in 2021, even with its late-comer status in Africa. This is to say that the doubling of trade relations within the next five years between Africa and Russia, as stated by Vladimir Putin in 2019, Sochi is not only a vision in the right direction of growing Russia’s partnership with Africa but also a desirable imperative.

In this sense, a new partnership with Africa could be defined not in terms of ideology but by alternative economic and developmental options which give Africa competitive parity. There are two distinctive initiatives which are appreciated: (i) President Vladimir Putin’s debt cancellation of twenty billion dollars ($20 billion) owed to Russia by African countries, which, in his very own word, “was not only a mark of generosity but also a manifestation of pragmatism.”

(ii) The systematization of regular summits. The joint declaration says, “At the initiative of African participants, a new dialogue mechanism – the Russia-Africa partnership forum – has been created. Top-level meetings will occur within its framework once every three years, alternately in Russia and African states. And, the foreign ministers of Russia and three African countries – the current, future and previous chairpersons of the African Union – will meet for annual consultations.”

The two sides have set goals and tasks for further developing Russia-Africa cooperation. They moved from an “ad hoc approach” and often controversial decision-making modalities to “a more comprehensive structured long-term policy plan” dealing with relations.

Beyond the summit, it is necessary to follow up on the concrete decisions as these will give a new impetus to the wide-ranging and long-term multifaceted relations with the countries in West Africa. Ghana, Nigeria and a few countries are already traditional markets for foreign producers and investors, including the United States, Europe, China, India, and even the Gulf states. Ghana and Nigeria open wide windows and doors to the real African market, beginning with the formidable Economic Community of West African States (ECOWAS) regional market.

“Today, for instance, Nigeria offers Russia the advantage of that cheap and robust labour. Given Russia’s recent experience of sanctions by America and its Western allies, a new model of doing business with Africa through investment has become not only sustainable but also imperative.” This was argued by Professor Shehu Abdullai Yibaikwal, Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Nigeria, with concurrent accreditation to the Republic of Belarus. In his academic lecture at the Diplomatic Academy of the Russian Federation, perhaps one of the sectors where this model of doing business can be symbiotically harnessed is the field of agriculture and its value chain as a result of the steep rise in the large African market and the projected certainty of huge returns on investment in this sector.

Russia has expressed deep interest in Nigeria, highly pledging to build nuclear power plants, petroleum pipelines, railways and infrastructure. Unfortunately, these corporate plans have not been realized; Russia sees instability or neo-colonialism as factors impeding its investment. Then there are also the project financing and legal aspects that must be mutually resolved.

Our part is to ensure sustainability by making partnerships more reliable, workable and long-termed. We still have skyline hope and optimism for building back better relations between the two countries, and most importantly within the context of the Declaration “On the Principles of Friendly Relations and Partnership between the Russian Federation and the Federal Republic of Nigeria” signed as far back in 2001, and the multilateral cooperation that was signed between Russia and Nigeria by both leaders at the first Russia-Africa Summit held in Sochi. The forthcoming second summit in July 2023 also signals Russia’s practical preparedness and commitment to work based on a single rule book for trade and investment and towards sustainable development growth across Africa.

To finalize this article, we should refer to the quote by Egyptian President Abdel Fattah el-Sisi, Chairperson of the African Union (AU) in 2019 and co-chair of the first Russia-Africa Summit: “Our declaration has reaffirmed the goals of Agenda 2063 and the 2030 Agenda for Sustainable Development. We have approved a ministerial mechanism for promoting dialogue and partnership. We appreciate all these moves and believe they have created a solid foundation for further developing Russian-African relations.” Aware of this common responsibility, the Russian and African sides will continue coordinating their efforts to monitor the implementation of the documents adopted at the summit. This meets the desires and aspirations of African states and the Russian Federation.

Professor Maurice Okoli is a fellow at the Institute for African Studies and the Institute of World Economy and International Relations, Russian Academy of Sciences. He is also a fellow at the North-Eastern Federal University in Russia.

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Economy

Seplat to Boost Nigeria’s Oil Production With Mobil Assets Acquisition

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Seplat Energy

By Adedapo Adesanya

Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.

The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.

The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”

The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.

Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.

The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.

MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).

Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,

Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.

“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.

“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”

On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.

“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.

“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.

“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.

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PenCom Projects N22trn Pension Assets for 2024

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PenCom old age poverty

By Adedapo Adesanya

The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.

This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.

She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.

Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.

She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).

Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.

She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.

“To address these issues, the commission has initiated a comprehensive review of its investment regulations.

“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.

“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.

She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.

“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.

“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.

“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.

“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.

She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.

“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,

Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.

“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.

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Economy

NASD OTC Securities Exchange Closes Flat

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Nigerian OTC securities exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.

As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.

However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.

In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.

But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.

When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.

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