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Dialogue with Africa: How Nigeria and Russia Can Promote Mutually Beneficial Cooperation

Dialogue with Africa: How Nigeria and Russia Can Promote Mutually Beneficial Cooperation

Photo by council.gov.ru

Russia and Nigeria have good prospects for cooperation in many economic sectors—from mining, petrochemicals, agriculture, and high-tech manufacturing to education and mutual investment. The Embassy of Nigeria in Russia, together with NUIA Consulting and HSE University, has held a business briefing on ‘Entering New Markets: Nigeria—Opportunities, Prospects and Practical Experience of Russian Companies’. 

Africa's role in the world economy and international relations is growing. The region has great potential for growth, consolidation and development. Africa has become a promising market for Russia in terms of goods and services such as food, information technology, weapons, medicine, education and health care.

Photo by HSE University

Considerable progress has been made in Russia's cultural and humanitarian relations with Africa in recent years: the number of African students studying in Russia has tripled over the past 13 years. Cooperation between Russia and Africa in the transfer of competencies in areas such as counter-terrorism, financial monitoring, environmental and technical surveillance, data control, energy and food security is becoming increasingly relevant.

HSE University is implementing a Competence Transfer Programme aimed at transferring the experience accumulated by the HSE Institute for Public Administration and Governance in addressing relevant issues related to digital transformation of various areas of public administration to government officials and regulators in Africa, says Andrey Maslov, Head of the HSE Centre for African Studies. The programme is highly relevant in the context of the presidential decree on preparations for the Second Russia-Africa Summit in 2023.

Untapped Potential for Cooperation

One of our tasks is to make up for the mutual lack of knowledge about each other and overcome the obstacles to the rapid development of bilateral relations, Maslov says. He believes that Russian businessmen tend to overestimate the risks of doing business in Nigeria.

Andrey Maslov
Photo by HSE University

Anna Belyaeva, Executive Director of the Association of Economic Cooperation with African States (AECAS), agrees that the lack of knowledge of the Nigerian economy faced by Russian businesses prevents the development of mutual trade and investment. The situation changed to a certain extent after the First Russia-Africa Summit, but Russian entrepreneurs were quite reluctant to enter the continent. According to her, business missions have now intensified, and the number of events dedicated to doing business in Africa has increased, but there is still not enough interaction due to the lack of both practical knowledge and the ability to look for and identify partners.

Nigeria is Africa's largest country, with a population of about 220 million, says HSE Vice Rector Victoria Panova. The country is expected to be among the world's top 20 economies by 2030. At the same time, the potential of interaction between the two countries has not yet been tapped—trade turnover was less than $1 billion in 2021. According to Panova, Russia and Nigeria should develop cooperation not only in mining, petrochemicals and agriculture. The countries should also look into a wider range of areas of bilateral economic interaction.

Victoria Panova
Photo by HSE University

Another promising area is the training of highly qualified personnel for Nigeria—economists, state and municipal administrators, social scientists, engineers and ICT professionals. Russia expects an increase in the number of students from Nigeria, a more intensive exchange of teachers and researchers. ‘We need to interact to become leaders in a turbulent situation,’ Victoria Panova pointed out.

Dmitry Prokhorenko, Director for Overseas Network Development at the Russian Export Centre, says it is important to develop mutual trade with Nigeria. This requires more frequent payments in national currencies, which in turn is difficult to achieve without a balance of trade; at present, Russia's exports exceed imports by an order of magnitude. This balance can be achieved by increasing imports of cocoa beans and other Nigerian goods, he says.

Mr. Friday Akpan
Photo by HSE University

Friday Akpan, Nigeria's Minister Counsellor for Economy, Trade and Investment, attended the event as a guest of honour. He noted the trusting nature of the relationship between the two countries, recalling that Nigeria is home to more than 15% of Africa's population. In addition, the country accounts for over 17% of continental GDP and is a promising solvent market for Russia.

According to Akpan, the energy sector plays a significant role in Nigeria’s national economy. Apart from Nigerian companies, it is represented by multinational corporations. These include Shell, Total, LUKOIL, Gazprom and Eni. All of them are involved in oil and gas exploration and development projects. However, to strengthen cooperation, it is necessary to increase awareness of the country and intensify communication in every direction. The embassy will help with this, he said.

Mutually Beneficial Co-operation Since Soviet Times

The participants of the event discussed the details of doing business in Nigeria. Nina Anigbogu, CEO of NUIA Consulting, briefed the participants on the specifics of certification. Prof. Moji Christianah Adeyeye, Director General of Nigeria’s National Agency for Food and Drugs Administration and Control (NAFDAC), and Bankole Ezebuilo, CEO and Managing Director of Kayhelt Pharma Ltd, member of the Nigerian Association of Industrial Pharmacists, discussed the registration and admission of foreign food, chemical products, and medicines into their market.

Nina Anigbogu
Photo by HSE University

Russia and Nigeria have enjoyed a history of mutually beneficial cooperation since Soviet times. The parties have managed to establish a broad legal framework for bilateral relations, says Vsevolod Sviridov, Expert at the HSE Centre for African Studies. When the oil boom and the commodity supercycle started in the 2000s, a number of Russian companies entered the Nigerian market, including Gazprom, Rusal, and Rosatom. However, not all of their projects have achieved their goals. Reasons for this include poor financial models, the failure of some initiatives to comply with Nigeria's interests of economic development, and inflated expectations of profitability.

For example, expectations that investments in aluminium production would reach $2,900 per tonne in the world market did not come about because the plant never reached its design capacity. On the other hand, the supply of pipes for oil and gas pipelines by the United Metallurgical Company (OMK), as well as oil products by LUKOIL and mineral fertilisers by Uralkali, turned out to be successful.

Friday Akpan also notes that Nigeria has recently changed the vector of its energy sector development: the country is paying more attention to the growth of the domestic gas market. Andrey Maslov says that the interests of the two countries coincide in this sphere. Russia is interested in developing Nigeria’s domestic gas market because neither Nigeria, which is experiencing a shortage of fuel and electricity, nor Russia needs to increase its exports. Mr. Maslov stressed that Russian universities, including HSE University, will be able to cooperate with Nigerian institutes and universities in studying the domestic gas market.

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