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INTERVIEW: Russian companies have attractive market and investment in Africa

Uganda’s Museveni one of the African presidents heading to Russia. PHOTO PPU

Kampala, Uganda | KHISA ISAAC  | Andrei Slepnev is the Director General for Russian Export Center (REC), the organisers of the first ever Russia-Africa Economic Forum with the African Import Export Bank. He spoke to Russia News Agency about the opportunities that lies ahead of the summit.

QUESTION: Russia-Africa Forum is to be held in Sochi starting tomorrow throughout Thursday. What does REC prepare for the Forum?

ANSWER: In view of the strategic importance of the Economic Forum for the development of cooperation between our country and the African continent, REC Group is actively preparing for the upcoming events in Sochi. We have analyzed foreign experience in building partnership relations and supporting projects in Africa. We are also working closely with the Roscongress Foundation, the Institute for African Studies of the Russian Academy of Sciences, the Ministry of Foreign Affairs of the Russian Federation and other authorities directly or indirectly involved in establishing Russian-African trade and intercultural relations.

REC Group and Afreximbank, which is our main partner in Africa, have been recognized as the official co-organizers of the upcoming Forum. This emphasizes our special role in the preparation and conduct of the event, as well as maximizes the use of experience and competencies.

REC is going to hold two sessions within the Forum, which will address trade finance issues and the Russian Industrial Zone in Egypt.

As usual, we will organize a display of Russian Export Center, demonstrating products and technological solutions in the industries, which are considered to be the most promising in terms of our cooperation with African countries. These industries include agriculture, transport engineering, chemistry, medicine and pharmaceuticals, information technology. The display will be located at the Forum site and outside of it. All-terrain vehicles, the latest generation city tram, agricultural machinery, construction and special equipment, as well as mobile health care centers built on the platform of domestic vehicles will be displayed on the streets.

Director General for Russian Export Center Andrei Slepnev

Presentations and demonstrations of food and drinks made of domestic raw materials will be held during the event. We have invited an international team of chefs who will demonstrate haute cuisine using Russian food and drinks from leading Russian wineries.

Besides, REC and Afreximbank are making every effort to organize meetings between Russian and African businessmen, business networking and subsequent negotiations. We will allocate a special business communication area for these purposes. The agenda is vast and it creates a great interest in the event. According to our information, more than 50 Presidents will visit Sochi next week. This is an absolute record. And we are sure, this is not about the number of participants, this is about the significant interest in our joint projects.

At the moment, Russia has few points of presence in Africa. Do you plan to arrange the new points of presence in Africa? 

Certainly, Africa is considered as a potential and actual driver for the development of the non- resource non-energy market. If to talk about prospects, we have good historical ties, many of those who are part of the current local elite studied in Russia. We can foster dialogue with them and build long-term strategic relations.

Currently, there is a large project, the Russian industrial zone in Egypt, under development, which can be called our "export gate" to Africa. We will announce the project at the Forum. The Russian industrial zone official inauguration ceremony will be broadcasted at the event. This is the first large-scale infrastructure project in the modern history of Russia-Africa economic relations. The significance of the project is evidenced by the fact that the RIZ is a part of the International Cooperation and Export national project.

We will gradually develop a unique complex in the area of 525 hectares at the East Port Said site of the Suez Canal Economic Zone. Russian exporters and suppliers will be able to locate their production facilities near the promising markets of the Middle East and Africa. The residents will enjoy the advanced engineering and utility infrastructure, namely roads, safety systems, water and electric power supply systems, etc. The manufacturers will be offered an optimal site to develop business, namely a basic site for the development of production facilities (greenfield) or the ready-made production facilities (brownfield). The residents will enjoy various exemptions and concessions, special export and import customs duties, salary benefits and special Suez Canal tolls. There will be a possibility to repatriate 100% of the collected earnings back to Russia with no Egypt partners involved. 25 agreements of understanding have been already signed with the Russian companies, assuming their participation in the RIZ as the potential residents. These are the manufacturers of biochemistry products and fertilizers, construction materials and metal structures, composite materials, farming machinery, electrically-powered and oil and gas equipment, dock facilities, etc.

Russian companies start to penetrate deeply into the international distribution processes that involve their products. We obviously need a stable and reliable country in Africa with numerous free trade agreements and without business. Egypt has free trade arrangements with 72 countries.

Of course, convenient logistics and the proximity of the Suez Canal are of great importance as they reduce costs for exporters. The political relations between Russia and Egypt are important too as they seriously promote business initiatives. Therefore, the potential of the RIZ is huge.

According to our estimates, the project will draw a great resonance and attention of Russian business.

Are you going to sign agreements with the African counterparties during the Forum?

The number of companies, which consider the African markets attractive for expanding their export operations, is constantly growing. We observe a lot of attention from Russian business to the African continent. REC Group companies, Russian manufacturers and interested African counterparties are planning to sign some cooperation agreements under the already elaborated projects. These will be the large-scale agreements that will affect many areas, including infrastructure, energy, engineering and others.

We are going to sign the most important memorandum of cooperation on the Ajaokuta Steel Plant construction project with Nigeria. It is quite symbolic for us to be back to the project since the construction of the plant has begun in Soviet times. However, not all process stages are launched yet. The local government failed to conclude plant concession agreements with foreign investors. This year, we carried on negotiations with the representatives of the Federal Government of Nigeria and the State of Kogi, the management of the Ajaokuta Steel Plant, the leadership of Afreximbank during the annual meeting of Afreximbank, held in Moscow. Further negotiations, backed by the Russian Embassy, were held in Nigeria. Russia warrants that it is ready to design, reconstruct and commission the steel plant. All prerequisites necessary for the successful implementation of this project have been met. The steel plant is equipped with various Russian equipment. Its modernization and commissioning with Russian enterprises being involved will create a significant synergistic effect for both Nigerian counterparty and Russian enterprises. The parties have already expressed their understanding that the signing of the agreement at the Summit in Sochi may become of the key pillars that support the relations between the Russian Federation and the countries of Western Africa.

 

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