World
The Challenges Russian Business Face in Africa
By Kester Kenn Klomegah
Undoubtedly, a number of Russian companies have largely underperformed in Africa, experts described was primarily due to multiple reasons. Most often, Russian investors strike important investment niches that still require long-term strategies and adequate country study. Grappling with reality, there are many investment challenges including official bureaucracy in Africa.
In order to ensure business safety and consequently realize the target goals, it is necessary to attain some level of understanding the priorities of the country, investment legislations, comply with terms of agreement and a careful study of policy changes, particularly when there is a sudden change in government.
The Russian Foreign Ministry published on its official website the text speech of Deputy Foreign Minister, Mikhail Bogdanov, in which he highlighted the challenges and problems facing the development of effective Russia-African economic ties. It was at a special business session of the Urals-Africa economic forum in Yekaterinburg.
Admittedly, Bogdanov pointed to the practical span and nature of Russian companies’ business operations in Africa. And of course, he underscored the fact that one key obstacle has been insufficient knowledge of the economic potential on the part of Russian entrepreneurs, needs and opportunities of the African region.
“Poor knowledge of the African market structure, the investment climate and the characteristics of African customers by the Russian business community remains an undeniable fact. Africans, in their turn, are insufficiently informed on the capabilities of potential Russian partners,” Bogdanov said.
Over the past few years, many corporate Russian companies have shown interests in investing in the region but feared, in practical terms, to move into action. Russians observe lots of business theories. Those corporate Russian companies that managed, at least, to make inroads there, a few have already exited citing “technical” reasons. An investment review and a business survey recently by AfBusiness Dialogue & Consultancy show there is more beyond “the technical and operational” reasons.
In Dec 2018, Russia’s Nornickel terminated its deal with Botswana’s BCL Group. According to Itar-Tass News Agency, quoting the media release, Russia’s Norilsk Nickel has terminated its agreement to sell African assets to Botswana’s BCL Group, including a 50% stake in the Nkomati joint venture.
It said that the Russian company would continue to seek damages from the BCL Group for the losses it suffered due to BCL’s failure to meet the terms of the agreement. The termination of the agreement would also enable Norilsk Nickel to pursue its own strategy for the African assets, Michael Marriott, Norilsk Nickel Africa’s Chief Executive, said as quoted by the press service.
“We will continue to pursue our claims against the BCL Group and the Botswana Government to recover the significant loss we have suffered as a result of their unlawful breaches,” Michael Marriott stressed.
In East Africa, Russia’s RT-Global Resources and Rosneft quitted Ugandan President Yoweri Museveni’s oil refinery project and many major infrastructure deals. Russia had pledged US$4 billion but later disagreements over terms and frustration over in-fighting, intrigue and lobbying forced them to pull out of the country. The Ugandan government team noted that the Russian consortium exhibited inadequate assurance and availability of preferred alternative foreign contractors with comparatively high bidding terms.
Museveni, at first, favored the Russians because, apart from considering access to weapons, the Ugandan leadership was also counting on Russia’s world superiority as a counterweight to both western powers; mainly America, and China. With Russians and the South Koreans out of the negotiations, Uganda appeared somewhat desperate, that was back in 2014.
Similar five years ago, Rosneft also abandoned its interest in the southern Africa oil pipeline construction, soon after its delegation in Angola had discussed the possible participation of the Kremlin-controlled company in exploration and development projects there. That project never appeared despite that fact that Russia has excellent relations with Angola, Mozambique, South Africa and Zimbabwe. From both business and political perspectives, the region is considered as unipolar and a regional power all together with South Africa.
In addition, Lukoil, one of the Russia’s biggest oil companies, like many Russian companies, has had a long history, going forth and back with declaration of business intentions or mere interests in tapping into oil and gas resources in Africa.
Besides technical and geographical hitches, Lukoil noted explicitly in an official report that “the African leadership and government policies always pose serious problems to operations in the region.” It said that the company has been ready to observe strictly all of its obligations as a foreign investor in Africa.
In August 2015, Lukoil pulled out of the oil and gas exploration and drilling project that it began in Sierra Leone. According to Interfax, a local Russian News Agency, the company did not currently have any projects and has backed away due to poor exploration results in Sierra Leone.
It was reported that drilling in West Africa, including in Ghana, Côte d’Ivoire and Sierra Leone, did not bring Lukoil the expected results, as preliminary technical results did not demonstrated commercial hydrocarbon reserves. According to official reports, Vice-President Leonid Fedun did not rule out that Lukoil could withdraw from almost all of the projects in West Africa.
Over the years, Russian trade experts and business consultants have been discussing ways to improve overall economic cooperation with Africa. For instance, Andrey Efimenko, an Expert at the Russian Chamber of Commerce and Industry (CCI) said in an exclusive interview with me that the Russian Chamber of Commerce and Trade has closely monitored the activities and performance of Russian companies in Africa.
“Unfortunately,” Efimenko regrettably pointed out, “some large Russian companies operating in Africa, has managed to establish itself negatively in a number of countries there. This is primarily due to ignorance of cultural peculiarities of the region, lack of social responsibility, failure to completely fulfill contractual obligations. These cases damage the image of Russia and Russian companies with further entering the African market.”
All of these developments, more or less, have degraded Russia’s image of Doing Business in Africa. On Dec 19, 2018, the Valdai Discussion Club hosted an expert discussion on Africa. Oleg Barabanov, Program Director of the Valdai Discussion Club, highlighted the investment prospects and their influence there by foreign players, and further analyzed the existing perspectives and challenges for potential Russian investors.
In her contribution, Nataliya Zaiser, Chairperson of the Board of the African Business Initiative (ABI) – a Moscow based business NGO, stressed that economic cooperation with African countries is not only a Russian initiative, but also a response to request from partners. Despite this mutual interest and potentially fruitful projects, Nataliya Zaiser said that there were still few really successful cases on the continent.
Andrei Maslov, Coordinator of the work/project on the Russia Africa Shared Vision 2030 report, Integration Expertise Analytical Center, said that in comparison with the situation a decade ago, today Africa is not only the main initiator of dialogue with Russia, but also it is much more ready for it. If earlier the economic landscape of the continent was determined by Western companies with their colonial approaches, now Africa is ready to become an equal partner, according to the Valdai report.
However, there are problems: Maslov echoed Nataliya Zaiser by saying that about 90% of the projects end in failure. In order to overcome this discord, the coordinating role of the state is needed, which, together with the private business, should prepare a roadmap and set targets for the development of various industries. The driver of economic cooperation, according to Maslov, can be private, rather than top-down initiatives.
“For us, Africa is not a terra incognita: the USSR actively worked there, having diplomatic relations with 35 countries. In general, there are no turns, reversals or zigzags in our policy. There is a consistent development of relations with African countries,” according to Oleg Ozerov, Deputy Director of the Africa Department at the Ministry of Foreign Affairs of the Russian Federation.
Signing agreements is not absolutely the best ultimate guarantee to the success of investment, however it provides legal basis. As the situation develops and interest continues to rise, Russian investors have to make part of the financial budget also for private consultancy services, as many foreign players do, and prepare to learn more about investing in Africa.
Kester Kenn Klomegah writes frequently on Russia, Africa and the BRICS.
By Adedapo Adesanya
Bitcoin (BTC), the world’s best-known digital currency, reached a fresh record high of $108,943 on Monday morning as Mr Donald Trump prepared to return to the White House.
The support from Mr Trump has boosted the crypto industry and after mentioning the asset’s record performance in a Sunday speech alongside gains in the broader US stock market, the prices have been heading north.
“Since the election, the stock market has surged and small business optimism has soared a record 41 points to a 39-year high. Bitcoin has shattered one record high after another,” Mr Trump said.
Business Post reports that some other tokens making gains include Ethereum (ETH), the second most valued coin which has gained 5.9 per cent to $3,349.93, Ripple (XPR) added 6.2 per cent to sell at $3.31, and Cardano (ADA) added 3.3 per cent to $1.07.
Mr Trump, who over the weekend launched a coin, has been vocal about his support for cryptocurrencies during his campaign and promised to make the US the crypto capital of the planet and create a strategic national bitcoin reserve, moves that have fueled investor optimism.
There are hopes that new policies and regulators will send the price of BTC and by extension, other coins much further this year as the US economy continues to show strength in the long term.
BTC reversed losses from earlier in the day when it fell to nearly $100,000 from a high over $102,000 on Sunday as incoming first lady Melania Trump issued a memecoin, drawing liquidity away from major assets.
Mrs Trump followed her husband’s lead by launching a multibillion-dollar cryptocurrency meme coin – briefly tanking the price of $TRUMP coin in the process.
A meme coin is a type of cryptocurrency inspired by trends such as internet memes with no inherent utility, and are often susceptible to price swings and crashes. Meme coins have been described by traders as a pure form of gambling and akin to buying a lottery ticket.
However, some crypto enthusiasts hailed the Trump meme coin’s release, saying it was symbolic of the incoming president’s support for an industry that felt unfairly targeted by the Biden administration.
By Adedapo Adesanya
Nigeria has joined the BRICS bloc of developing economies to boost trade and investment. It is not joining as a full status member but as a partner country.
According to a statement by the Ministry of Foreign Affairs to the effect, the country was admitted as a BRICS partner country during a BRICS summit in Russia in 2024.
This marked the country’s inclusion in a partnership with 12 other nations aimed at strengthening ties with the emerging economic bloc.
As a partner, Nigeria can engage with BRICS initiatives without the formal obligations or decision-making rights that come with full membership.
Full members, on the other hand, actively shape the bloc’s policies, benefit from broader access to resources, and have a more significant role in governance.
BRICS was established in 2009 by Brazil, Russia, India, and China, with South Africa joining a year later in 2010. In 2024, the alliance expanded to include Iran, Egypt, Ethiopia, and the United Arab Emirates (UAE).
Saudi Arabia has also received an invitation but has not yet formalised its membership.
According to the Ministry of Foreign Affairs, the formal acceptance to participate as a partner country highlights Nigeria’s commitment to fostering international collaboration and leveraging economic opportunities.
The ministry also said Nigeria is focused on advancing strategic partnerships that align with its development objectives.
The ministry noted that BRICS, as a collective of major emerging economies, presents a unique platform for Nigeria to enhance trade, investment, and socio-economic cooperation with member countries.
Business Post reports that Nigeria becomes the ninth BRICS partner country, joining Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Thailand, Uganda, and Uzbekistan.
BRICS created to counterbalance the Group of Seven (G7), which consists of advanced economies. BRICS aims to amplify the influence of developing nations.
The term “BRICS” originated in the early 2000s as a label for emerging economies projected to become major global economic powers by the mid-21st century. The bloc has since evolved into a platform for addressing global economic disparities and fostering cooperation among rising economies.
By Kestér Kenn Klomegâh
With heightening of geopolitical interest in building a new Global South architecture, Ghana’s administration has to consider joining the ‘partner states category’ of BRICS+, an association of five major emerging economies (Brazil, Russia, India, China and South Africa). The National Democratic Party (NDC) and the elected President John Mahama, while crafting future pathways and renewing commitments over democracy and governance, designing a new economic recovery programme as top priority, could initiate discussions to put Ghana on higher stage by ascending unto BRICS+ platform.
Certainly, ascending unto BRICS+ platform would become a historical landmark for Ghana which has attained prestigious status in multilateral institutions and organizations such as the Economic Community of West Africa States (ECOWAS), the African Union (AU), the United Nations and also from Jan. 2025 has become the head of the Commonwealth Secretariat.
Unlike South Africa, which has acquired a full-fledged membership status in 2011, and Ethiopia, Nigeria and Uganda were taken into the ‘partner states’ category, Ghana has all the fundamental requirements to become part of BRICS+ alliance. It is necessary to understand the basic definition and meaning of BRICS+ in the context of the geopolitical changing world. The BRICS alliance operates on the basis of non-interference. As an anti-Western association, it stays open to mutual cooperation from countries with ‘like-minded’ political philosophy.
BRICS members have the freedom to engage their bilateral relations any external country of their choice. In addition to that, BRICS+ strategic partnership has explicitly showed that it is not a confrontation association, but rather that of cooperation designed to address global challenges, and is based on respect for the right of each country to determine its own future.
South Africa and other African countries associated with BRICS+
South Africa is strongly committed to its engagement in the BRICS+. It has, so far, hosted two of its summits. In future, Egypt and Ethiopia would have the chance to host BRICS+ summit. Egypt and Ethiopia have excellent relations with members, and simultaneously transact business and trade with other non-BRICS+, external countries.
The New Development Bank (BRICS) was established in 2015, has financed more than 100 projects, with total loans reaching approximately $35 billion, and it is great that the branch of this bank operates from Johannesburg in South Africa. Understandably, South Africa can be an investment gateway to the rest of Africa. In 2021, Bangladesh, Egypt, the United Arab Emirates and Uruguay joined the NDB.
The BRICS Bank works independently without any political strings, and has further pledged financial support for development initiatives in non-BRICS+ countries in the Global South. Its tasks include investing in the economy through concessional loans, alleviating poverty and working towards sustainable economic growth. According to President of the BRICS New Development Bank, Dilma Rousseff, “The bank should play a major role in the development of a multipolar, polycentric world.”
Ethiopia and Egypt are the latest addition to BRICS+ association from January 2024. South Africa and Egypt being the economic power houses, while Ethiopia ranks 8th position in the continent. In terms of demography, Nigeria is the populous, with an estimated 220 million people while Uganda has a population of 46 million. South Africa, Ethiopia and Egypt are full members, Algeria, Nigeria and Uganda were offered ‘partner states’ category, but have the chance to pursue multi-dimensional cooperation with external countries. BRICS+ has absolutely no restrictions with whom to strike bilateral relationship.
From the above premise, Ghana’s new administration, within the framework of BRICS+, could work out a strategic plan to establish full coordination with and request support from African members, including South Africa, Egypt and Ethiopia. Worth noting that membership benefits can not be underestimated in this era of shifting economic architecture and geopolitical situation.
Queuing for BRICS+ Membership
Burkina Faso, Mali and Niger which historically sharing the cross-border region of West Africa, are in the queue to ascend into the BRICS+ association. The trio has formed their own regional economic and defense pact, the Alliance of Sahel States (AES) in Sept. 2023, and aspiring for leveraging unto BRICS+, most likely to address their development and security questions. Brazil, as BRICS 2025 chairmanship, has set its priority on expansion of BRICS+, the enlargement wave began by Russia. More than 30 countries are the line join, hoping for equitable participation in bloc’s unique activities uniting the Global South.
Perhaps, the most crucial moment for Ghana which shares border with Burkina Faso. Its military leader, Capt. Ibrahim Traoré was heartily applauded for attending the inauguration of the new President John Dramani Mahama on January 7th. Burkina Faso, without International Monetary Fund (IMF) and World Bank, is transforming its agricultural sector to ensure food security, building educational and health facilities and sports complex which turns a new chapter in its political history.
In early January 2025, the National Democratic Congress (NDC) took over political power from the New Patriotic Party (NPP). Historically, the political transition has been quite smooth and admirable down the years. Ghana was ranked seventh in Africa out of 53 countries in the Ibrahim Index of African Governance. The Ibrahim Index is a comprehensive measure of African governments, and methods of power transfer based on constitutional principles, rules and regulations.
Ghana produces high-quality cocoa. It has huge mineral deposits including gold, diamonds and bauxites. it has approx. 10 billion barrels of petroleum in reserves, the fifth-largest in Africa. President John Dramani Mahama, has reiterated to unlock the potentials, creating a resilient and inclusive economic model that would empower citizens and ultimately attracts foreign investments. Ghana reduced size of government, a required condition to secure funds from the IMF for development and resuscitating the economy. Ghana’s involvement in BRICS+ will steadily enhance the dynamics of its traditional governance in multipolar world.
Outlining Ghana’s potential benefits
Currently, Ghana has myriad of economic tasks to implement, aims at recovering from the previous gross mismanagement. It could take advantage of BRICS+ diverse partnership opportunities. Closing related to this, Ghana’s headquarter of the African Continental Free Trade Area (AfCFTA) further offers an appropriate collaboration in boosting further both intra-BRICS trade and intra-Africa trade. With Egypt, Ethiopia, Uganda, South Africa, Nigeria and Ghana, these put together paints an African geographical representation in BRICS+, and presents their collective African voice on the international stage.
After studying the article report titled “Ghana Should Consider Joining the BRICS Organization” (Source: http://infobrics.org), the author Natogmah Issahaku, explained, in the first place, that Ghana’s relations with other external nations, particularly, those in the West, will not, and should not be affected by its BRICS membership. According to the expert, Ghana needs infrastructural development and sustainable economic growth in order to raise the living standard of Ghanaians to middle-income status, which could be achieved through participation in BRICS+. In return, Ghana can offer BRICS+ members export of finished and semi-finished industrial and agricultural products as well as minerals in a win-win partnership framework.
As an Applied Economist at the University of Lincoln, United Kingdom, Natogmah Issahaku emphasized the importance of the BRICS New Development Bank (NDB), that could play roles by financing Ghana’s development agenda. BRICS development cooperation model is based on equality and fairness, Ghana can leverage its relations to optimize potential benefits. Given the colossal scale of economic problems confronting the country, President Mahama should take strategic steps to lead Ghana into the BRICS+ without hesitation.
Notwithstanding world-wide criticisms, BRICS+ countries have advanced manufacturing and vast markets as well as technological advantages. As often argued, BRICS+ is another avenue to explore for long-term investment possibilities and work closely with its stakeholders.
These above-mentioned arguable factors are attractive for advancing Ghana in the Global South. Based on this, it is time to grab the emerging opportunity to drive increasingly high-quality cooperation, focus on hope rather than despair and step up broadly for more constructive parameters in building beneficial relations into the future! Over to the new government of President John Mahama, the estimated 35 million people and the Republic of Ghana.
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