Having secured the confidence of China, Nigeria has now won over Russia and Saudi Arabia to give the communist Asian country some competition in infrastructure and industrial development for the West African nation.
Nigeria’s gains in recent diplomatic shuttles to Russia and Saudi Arabia are designed to complement the efforts of China to lift Nigeria from the economic doldrums.
With more than 200 million people, the giant of Africa is grappling with problems of a poor economy, bereft of the industry and energy that stimulate growth and well-being.
Nigeria sees the intervention of Russia and Saudi Arabia as timely fast track efforts to boost the economy, to create employment opportunities, industrial and infrastructure growth as well as assisting the state’s agenda to lift more than 100 million Nigerians out of poverty in 10 years.
The UN has chastised Nigeria, the sixth largest world oil producer, for keeping 84 million people in extreme poverty in the midst of plenty.
The misapplication of more than $600 billion oil money in 59 years has turned Nigeria into an import dependent economy, a situation that is presently being reversed with some attendant pains. Nigeria has decided to reach out to developed friendly nations for an antidote to its predicament.
In doing so, China has for decades dominated the rail, road and aviation sectors in Nigeria. The recent agreements with Russia and Saudi Arabia to compete in these sectors, among others, is a major relief and a roadmap that heralds an expected ‘Eldorado’.
Nigeria was able to strike deals after bilateral meetings on the side-lines of the Russia-Africa Summit, held in October in Sochi and Saudi Arabia’s Future Investment Initiative, held at the end of October in Riyadh.
At the Russia-Africa summit, Nigeria successfully convinced Russia to resume work on the $5 billion Ajaokuta Steel Mill. This project, started in 1979 as the largest steel mill in Africa, was mismanaged and remained incomplete 40 years after. It was 98% complete by 1994 with 40 of the 43 plants installed before it was abandoned by the then Soviet Union.
After many failed attempts at privatisation, the Nigerian government took back control of the firm in 2016, but it still had not produced a single sheet of steel.
The acceptance of Russia to complete the project is a landmark achievement which President Muhammadu Buhari recorded in Sochi.
The steel firm is not alone in the wake-up deals with Russia to revitalise ailing state-owned firms. The $3.2 billion Aluminium Smelting Company of Nigeria (Alscon) in Ikot Abasi in Akwa Ibom state, abandoned for a decade, is another.
Alscon was built in 1989 with a capacity of 375 thousand metric tons per annum of alumina and 193 thousand tons per annum of primary aluminium.
The facility was designed to provide 10,000 indirect employments and save Nigeria over $3 billion of aluminium ingots and others imports annually. Today, the crisis in Alscon costs Nigeria and key downstream players over $6 billion annually on imports.
Russia also agreed to compete with China in the rail sub-sector and will kick start its new found turf with the construction of 1,400 kilometres of rail track from Lagos to the southern city of Calabar.
With President Vladimir Putin’s consent, on October 23rd, 2019, Nigeria’s Minister of Transportation, Rotimi Amaechi, signed the Memorandum of Understanding (MoU) with two Russian firms. The MoU also covers the rehabilitation of existing Nigerian Railway Corporation’s (NRC) rolling stock-fleet and upgrade of rail workshops.
The two Russian firms are Joint Stock Company Russian Railway (JSCRR) and Transmash Holding, a private rolling stock manufacturing company. The agreement was signed with JSCRR’s CEO-Chairman, Oleg Belozerov and the Chief Executive Officer of Transmash Holding, Kirill Lipa.
The Nigerian National Petroleum Corporation (NNPC) and Russia’s Lukoil also struck a deal to elevate their commercial relationship to a government-to-government partnership level.
Garba Shehu, the Senior Special Assistant to Buhari on Media and Publicity, confirmed on October 25, 2019 in Abuja that NNPC and Lukoil would work together in the upstream operations and revamp Nigeria’s refineries.
Shehu reported that the Group Managing Director of NNPC, Mele Kyari and Vagit Alekperov, President of Lukoil, signed the MoU, which entails cooperation in deep offshore exploration of oil in Nigeria, production, trading and refining.
The revival of the Nigeria-Russia Military Technical Agreement was also adopted. Nigeria’s Ministry of Defence was directed to work with the Ministry of Justice to conclude the issue within the shortest possible time.
The military cooperation is expected to give impetus in direct procurement of military hardware on a government-to-government basis at a lower cost as well as training of military personnel and modernisation of the military.
Russia accepted to help Nigeria to build a nuclear power plant, with construction commencing as soon as possible. It also agreed to partner Nigeria in the education and agriculture sectors, with wheat production a key in the latter.
President Buhari is to convene the fifth Joint Commission meeting to review and ratify all the 40 agreements contained in the Intergovernmental Nigeria-Russia Joint Commission on Economic, Scientific and Technical Cooperation Protocol of November 11th, 2016.
President Putin agreed to support Nigeria to secure a permanent seat in the United Nations Security Council and also advised Nigeria to tap into Russia’s potassium resources to boost fertiliser production.
Putin assured Nigeria of his readiness to secure and stop incidents of piracy in the Gulf of Guinea as well as assist in curtailing terrorism.
In Rydadh, President Buhari and Saudi Crown Prince Mohammed bin Salman agreed to establish a Nigeria-Saudi Strategic Council. The council is to promote investments and enhance relations.
The decision was the highpoint of a bilateral meeting which took place on the margins of the Future Investment Initiative (FII) conference.
Garba Shehu, the President’s spokesman, said in Abuja on October 30th, 2019 that the Council would be made up of government officials and business leaders from both countries. Its focus will be on economic growth and development, investments in oil and non-oil sectors, and security cooperation.
“President Buhari and the Crown Prince agreed that the Council is to urgently establish a legal and operational framework that will facilitate investments beneficial to both countries,’’ Shehu said.
“To ensure that relations between both countries remain active, it was also agreed that leaders of both countries, at the highest level, will meet at least once every year to review the progress of the joint council and ensure closer collaboration on issues of mutual interest,” Shehu added.
Elaborating, he told 7Dnews that “the council will be established in the next two months while meetings will be held twice every year.”
Nigeria’s foreign affairs minister Geoffery Onyeama, also reported on November 11th, 2019 that both countries have identified the Sahel region as the next frontier of terrorism following the collapse of Isis in Iraq and Syria.
He said the Crown Prince promised to keep the issue of the Sahel’s security situation, including that of Nigeria, on the front burner.
The Crown Prince reiterated the preparedness of the Kingdom to support Nigeria’s development agenda because of the country’s potential to be among the top 20 economies in the world.
Salman promised to invest in Nigeria as it has done in India and Pakistan on the platform of a stronger Nigeria-Saudi relationship.
‘‘Nigeria has a large population mainly made up of dynamic, young people and partnerships of this type will help them to be productive and prosperous,’’ the Prince noted.
Buhari also held strategic meetings with the leadership of Saudi Oil and Gas group, the country’s Sovereign Wealth Fund and Public Investment Fund, PIF.
On the directive of the King, the world’s largest oil operating firm, Aramco asked the President and his team a simple question: “What can we do for you?’’
Buhari requested Aramco to visit Nigeria and carry out a diagnostic assessment of the NNPC’s refineries, pipelines and other infrastructure.
The Aramco’s Chairman, Yassir Al-Rumayyan, who doubles as the head of the PIF, agreed to deploy the firm’s modern technology, technical expertise “to improve the efficiency of the oil and gas industry in Nigeria”.