More than a decade ago, Russia’s Foreign Affairs Minister Sergey Lavrov held a review meeting
with his Nigerian counterpart Minister Chief Ojo Mbila Maduekwe who paid a three-day
working visit to Moscow. After the closed-door bilateral talks, both ministers held a brief media
conference and one of the significant questions raised there was if Moscow was prepared to offer
trade preferences to the Federal Republic of Nigeria.
Extending trade preferences was interpreted as an integral part of strengthening bilateral
economic and trade cooperation between the two parties. During the Soviet days, Nigeria
benefited tremendously from Soviet assistance. And with no doubts, Russia has cordial post-
Soviet relations with Nigeria.
Nigerian Foreign Minister Ojo Maduekwe headed the delegation for ‘business-as-usual’
intergovernmental commission on economic and scientific-technical cooperation on March 17.
They agreed on a broad range of bilateral economic issues, many of which are still not
implemented.
But then, Russia has never honoured its promise of extending trade preferences in practical
terms to Nigeria. That media conference was held in March 2009.
Professor Dmitri Bondarenko, deputy director of the Russian Academy of Sciences’ Institute for
African Studies, told Inter Press Service (IPS) interview that as cooperation between Nigeria and
Russia was strengthening, Russia should seriously consider extending preferences to some
goods from Nigeria to further boost trade between the two oil producers.
Bondarenko told IPS that the intergovernmental commission could become a tool for the revival
of Russian-Nigerian economic cooperation.
This possibility is symbolised, albeit ambivalently, by the Ajeokuta plant which could become
the largest metal producing plant in Africa. The building of the steel plant started in 1970 during
the Soviet era. According to Bondarenko, it was “‘unfortunately stopped in the late 1980s due to
problems on both ends.”
This has made the Ajeokuta project is “a painful topic in discussions among Nigerian policy
experts on Russian-Nigerian relations.”
For trade relations between Russia and Nigeria and other African states to improve appreciably,
Bondarenko suggested that ‘”Russia gives some trade preferences to African countries – for
example, tax exceptions or reduction among other measures. This can become an effective
political step to strengthen relations with African countries.”
However, at least two points should be taken into account: firstly, such measures should only
apply to specific goods, so as not to discourage non-African partners. For example, if Russia
gives preferences to African imports of pineapples and bananas, it would have to do the same
with Latin American importers of the same goods for economic and political reasons.
Secondly, such preferences should apply to direct imports by African companies but not to trade
mediated by Russian or third countries’ companies. The value of trade, having practically
doubled in 2008 to about 300 million dollars, and the allowance for re-exports – more than one
billion dollars – serve as an indicator of current growth.
Today, Nigeria is Russia’s second largest trade partner among sub-Saharan African countries.
Russian business circles show an ever greater interest in entering the promising market of that
large country.
Dr Bashir Obasekola, a prominent Nigerian economist and the outgoing president-general of an
organization representing the Nigerian community in Russia, told IPS that the trade current
trade statistics of about 300 million dollars seems peanuts given the potential of both countries
and the size of their economies.
“The volume of trade should be in the billions of dollars, even without military hardware. One of
the major hindrances to free trade and a significant increase in trade transactions between
Nigeria and Russia is the lack of direct air flights,’” Obasekola said further. “This makes it more
inconvenient and expensive for potential investors to travel easily to both countries. Besides,
there are no adequate economic and social statistics available to potential Russian and Nigerian
investors.”
He explained that Russian industries need raw materials, agricultural produce and other
consumer goods that are cheaply available in Africa. Without special incentives, these things
cannot easily get to the Russian market.
“Such measures as changing import-export tariff policies could encourage buyers and sellers in
both countries to trade. Adequate legal protection should be made available for investors in both
countries. The lack of legal mechanisms is sometimes being exploited by criminals in both
countries,” he said, and added that this led to fraud and the illegal seizure of properties and
investments.
Apart from the differences in the level of economic development and climate, Russia and Nigeria
are similar in several ways. Both countries have large populations, with a variety of mineral
resources. Nigeria and Russia are both suppliers of oil and both play significant roles in regional
and world affairs.
Both countries are emerging economies, although Russia is far ahead in economic development,
a member of Group of Eight industrialized countries (G-8) while Nigeria is aspiring to be part of
the 20 most-developed economies by the year 2020.
The Russian private and public sectors could also play significant roles in the infrastructural
development (energy, housing, roads and railways) of Nigeria, Obasekola said finally.
The two governments hoped that the commission would help them to actualize the existing rich
potential that both Russia and Nigeria possess in the trade and economic field and in the sphere
of large investment projects.
These would include projects related to the development of infrastructure; the ferrous and non-
ferrous metals industry; electric power, including nuclear energy; and the extraction of
hydrocarbon and other mineral raw materials.
“We agreed to speed up work on modernizing the legal base of our relations. A whole array of
important draft documents are in the stage of elaboration, including an agreement on the
encouragement and protection of investment,” Lavrov said after their official meeting.
Russian foreign ministry’s spokesperson, Andrey Nesterenko, said at the start of the diplomatic
talks that, “economic and trade ties between Russia and Nigeria have been picking up in recent
years, which is consistent with the two leaderships’ policy of taking the partnership to a new
qualitative level.”
Nesterenko added that “key aspects of Russian-Nigerian cooperation is to bring all the available
suggestions for large projects in the energy sphere, the ferrous and non-ferrous metals industry
and other sectors onto a practical footing.”
