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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

Geo-Fluids, Afriland Properties Lift NASD Bourse by 0.13%

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shareholders of Afriland Properties

By Adedapo Adesanya

The duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.

Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.

Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.

There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.

FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance  (IGI )Plc with 10.7 million units sold for N2.1 million.

IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.

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Naira Depreciates to N1,543/$1 at Official Market

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Naira-Yuan Currency Swap Deal

By Adedapo Adesanya

The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.

According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.

The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.

The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.

On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.

As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.

In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).

However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.

Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1  per cent to $693.30.

On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.

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Economy

Customs Street Crumbles by 0.08% as Profit-Takers Take Charge

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Customs Street

By Dipo Olowookere

Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.

The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.

The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.

At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.

Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.

Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.

The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.

On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.

Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.

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