A strategic and political risk consultancy, Menas Associates, says President Muhammadu Buhari’s new romance with Moscow is a way of letting Washington, know that Nigeria has a potent alternative.
Menas provides actionable intelligence for its clients, from country entry strategies, to due diligence, stakeholder analysis, political risk reports, market assessments, problem solving and exit strategies.
According to the political risk consultancy, Nigeria has found a new friend in Russia after President Buhari came back from the Russia-Africa Summit in Sochi with a basket of Memorandum of Understanding (MoU).
Buhari was however, one of the five African heads of state chosen to have a one-on-one meeting with President Vladimir Putin at the three-day meeting at the Black Sea resort.
Although it cannot compete in terms of financial muscle, Russia is following China which has become a dominant player with Africa’s infrastructure financing. ‘’Cash strapped governments will cherish the competition if it puts much needed assistance on the table for infrastructure projects which is what Nigeria did by signing multiple MoUs in sectors ranging from agriculture to railways’’, Menas Associates said.
On the political front both leaders called for the reform of the United Nations Security Council (UNSC) so that more members can be admitted. Buhari asked Putin to support Nigeria’s bid to become a UNSC permanent member as soon as the reforms are introduced.
On the whole, Buhari’s meeting with Putin appears to have gone very well. When Buhari returned to the country on October 24 he pledged that new energy will be put into rebuilding Abuja’s relationship with Moscow and recalling how receptive the latter had been to Nigeria’s independence in 1960.
Buhari called on both countries organise the fifth Joint Commission meeting to review and ratify the 40 or so agreements in an inter-governmental Nigeria-Russia Joint Commission on Economic, Scientific and Technical Cooperation that was signed in November 2016.
According to Menas Associates, ‘’the Buhari government is now effectively flirting with three different powers: China, the US and Russia. Nigeria has benefitted significantly from China, and to some extent from the US which has supported the fight against Boko Haram with army training and intelligence support.
‘’However, Buhari’s last trip to the US — as President Donald Trump’s special guest — did not go well with Trump reportedly describing Buhari as ‘lifeless’ although this was subsequently denied. Their bilateral relationship appears to have cooled since and Buhari’s new romance with Moscow could be a way of letting Washington, know that he has an alternative.’’
Past trends show, however, that MoUs are not always translated into anything of significant account in the country. Nigeria signed an estimated $80 billion worth of deals during a road show in China in June 2016 but little has happened in the past three years. So far only the Lagos-Ibadan railway deal — signed before Buhari came into office — has materialised.
Russia is keen on reviving its influence in Africa and Nigeria will be a good place to demonstrate this. It remains to be seen, nevertheless, whether Putin will actually be ready to put his money where his mouth is in the same way that China has done.
For Nigeria, however, any deal that will rehabilitate its crumbling infrastructure will be welcome. There are valid concerns about apparent cheap funding, with no questions asked, that could eventually rebound on Nigeria if it is unable to repay the loans.
The projects built with these loans are often subsidised which creates doubts about their long-term economic viability. Critics argue that the lack of conditionality for Chinese loans has made it easy for the government to be less prudent in how it manages the railways and other projects.
If there had been pre-conditions the government would have had to be more commercially minded. The loans will also be due long after the current government’s tenure ends in 2023 so it can afford to be careless and shift the repayment responsibilities to successor governments.