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RUSSIA-AFRICA: Trucks Traded for Cash Crops and Oil

Kester Kenn Klomegah

MOSCOW, Sep 24 2007 (IPS) - Russia’s truck manufacturers say they’re ready to do more business in Africa but the country’s image problem may be getting in the way.

“I am not sure that Africa pays enough attention to Russia,” says Professor Vladimir Shubin, deputy director of the Moscow-based Russian Academy of Sciences’ Institute for African Studies.

“I think a good reason for that is the influence of Western propaganda based on events in Russia linked to Chechnya and the mafia, doing its best to portray Moscow as the backyard of Europe. That makes the situation scary for African businesses,” Shubin told IPS.

Russia’s trade relations with countries in Africa are bilateral, rather than regional like the European Union’s with the continent.

Maurice Okoli, executive chairman of the Moscow branch of Nigeria’s Peoples Democratic Party (PDP), told IPS that opportunities exist for improved trade relationships between the two regions and that Russia should step up cooperation in both the technical and economic spheres.

Russia’s exports to Africa until now have mainly been heavy-duty trucks and agricultural equipment. The deals worked out directly with an individual country in exchange for tropical products.

“Our African farmers need equipment to substantially improve agricultural output, the mainstay of the economy. Most of our farmers are still using obsolete tools, and that retards overall production,” said Okoli.

“During the Soviet days, barter as a means of trade was possible because trade was conducted by the state and not individual businessmen,” Okoli explained. “Now everything depends on the agreement you reach with your trading partner. Nigeria imports manufactured goods in exchange for raw materials, mainly crude oil, cocoa and some other traditional products that Russia agrees to buy.”

“Nigeria has successfully negotiated for the importation of more than 2,000 Russian buses for the police service along with 250 cargo trucks last year in exchange of crude oil. It’s necessary for other African importers to adopt a similar purchasing policy with their Russian manufacturers,” he added.

A source at the Russian Ministry of Trade and Development told IPS that automobile makers plan to assemble trucks, tractors, buses, and spare parts as well as establish service centres in Africa. He did not specify other details or a timeframe for the expansion plans, however, saying that everything depends on African partners.

“There are interesting proposals on organising vehicle assembly plants in Africa – a promising market we are ready to consider,” he said.

One such company, Tartarstan-based KAMAZ Inc., last year sealed a deal to supply durable long-haul trucks to Ghana while Gorky Automobile did the same in 2005.

“We plan to deliver to Africa a large quantity of trucks this year and open service centres,” Vladimir Samoilov, a spokesman for public-private KAMAZ Inc., told IPS.

“The KAMAZ heavy trucks have been tested in Africa and we expect that with several modifications, our trucks will spur great interest among a number of other countries,” he said.

From Angola to Tunisia, KAMAZ has been exporting trucks to more than a dozen African countries since the 1980s with growing potential in other regional markets.

“One can say that in almost all African countries there are at least several of our trucks because they are very suitable for their bumpy roads. We are competitive because of our vehicles’ durability, reliability and relatively low prices,” Samoilov says.

African diplomats say official visits by Russia’s President Vladimir Putin to South Africa and that of former Russian Prime Minister Mikhail Fradkov to Namibia show Russia’s interest in the region and may boost Russian-African trade as whole.

“All these developments show that economic cooperation is picking up and there is a huge potential for Russian investors in Africa,” Dr. Sam K. Mbambo, Namibian ambassador in Moscow, told IPS in an interview.

Shubin said Russia’s overall business image has rapidly improved on the international stage and that would significantly influence new trade relations with Africa.

“But African business partners should also acknowledge the noticeably positive changes in Russia as an impetus to make a possible breakthrough in the economic and trade spheres,” he said adding, “this would distinctively mark a departure from the Soviet era when focus was particularly on political ideology and African countries only looked for Soviet assistance and development aid.”

“I am very skeptical of the very term aid. I believe it can be applied to some emergency situations, like earthquakes or severe drought. In other cases, it is better to speak about fair trade and cooperation in the business sphere,” Shubin said.