SADC ambassadors sell the alliance’s business opportunities to Russian investors
The ambassadors of the Southern African Development Community (SADC), an influential regional alliance comprising 15 countries located in the southern part of sub-Saharan Africa, last month called on a gathering of international strategic investors at a business seminar in Moscow to use the enormous business opportunities that abound in the SADC region and its diversified, but yet to be fully tapped economies.
Specifically, the envoys want Russian strategic investors to complement the revival of the Russian government’s interest in the entire continent after almost two decades of ‘politico-economic limbo’ following the demise of the Soviet Union in 1990s.
Apart from the SADC ambassadors, the organizers of the business seminar that took place at the Moscow Marriott Courtyard Hotel on October 7, the colorful gathering also included top representatives of Russian and international corporations with overt interests in the SADC region and the entire African Continent, officials of the Russian government led by Andrei Kemansky, the deputy director of the African Division of the Russian Ministry of Foreign Affairs (MFA), heads of intergovernmental organizations and top business groups leaders seeking new venues for diversifications of their investment portfolios in the post-crisis era.
Speaking at the opening of the seminar, Bheki Langa, the ambassador of the Republic of South Africa, which currently holds the rotational chairmanship of the organization in Russia, noted the long-standing robust relations between Russia and the SADC countries. “This positive trend is evident in the high-level political contacts between the leaderships of Russia and SADC states, notably, the visit of the ex-Russian president and current Prime Minister Vladimir Putin to South Africa in 2006, and the visits by incumbent Russian President Dmitry Medvedev to Angola and Zambia in July 2009, and visits of some of the SADC leaders to Russia.”
Langa decried the low official trade figures between the SADC countries, valued at a merger $190mln in 2007, as ‘completely non-reflective’ of the huge potential of the aggregated SADC economy and the buoyant relationships at the highest political levels between the region’s leaders and their Russian counterparts. “Though these figures have significantly increased since then, their current level still remains remarkably below the real potential of the SADC region. Indeed, one of the objectives of this seminar is to seek new ways and mechanisms for boosting these figures to a level that is fully commensurate with both the political component of our relations with Russia as well as the actual potential of the entire SADC economy,” he added. “This calls for more efforts from both individual countries and collectively within the SADC on one hand, and Russia on the other.”
“Most of our difficulties in bi- and multilateral relations, especially in the business sectors, stem from the fact that most business leaders in today’s Africa do not know much about the ‘New Russia’ and vice-versa.”
In this regard, the South African ambassador highlighted some of the efforts being made by both sides to boost the multifaceted relations between Russia and the entire sub-Saharan Africa, including the formation of the Russian Coordinating Committee on Economic Cooperation with Sub-Saharan Africa (AfroCom) and bilateral business councils, such as the Russia-South Africa Business Council. “Others include ITEC and different work groups formed across key industries between the SADC countries and Russia to invigorate the search for, and ways of, boosting the existing levels of business contacts among partners.”
Highlighting national and SADC regional business opportunities
The SADC nations ambassadors at the seminar — Moise Kabaku Mutshail, ambassador of the Democratic Republic of Congo (DRC), Phelekezela Mphoko, the ambassador of Zimbabwe, Mahendr Dosieah, the ambassador of Mauritius, Patrick N. Sinyinza, the ambassador of Zambia, etc. — made elaborate presentations of their countries’ economic potential and business opportunities available to potential international investors in their respective countries as well as within the SADC alliance, as they focused investors’ attention on the enormous benefits that will result from harnessing the gigantic multiplication effects from the cumulative positive cooperation synergy from establishing and/or deepening strategic partnership between SADC and Russia.
For instance, the Mauritius ambassador listed several business opportunities that currently exist in his country that could be of interest to potential Russian strategic investors and also a myriad of unique government incentives, including several foreign investment protection mechanisms, which have made the island nation a ‘global business haven’ for international investors “Mauritius is not only just a global tourist destination, but an internationally recognized business location, known for its perfect track record of a long history of political, economic and social stability that makes it an ideal destination for strategic investments,” he said. “Besides, the nation boasts highly educated bi- and multilingual workforce, high-developed financial services sector and has secured preferential markets via series of agreements with the EU, United States, Southern and Eastern African nations through COMESA and SADC. These arrangements help mitigate the ‘relative smallness of our nation’s domestic market’ for investors’ goods and services.”
The DRC ambassador, who will be taking over the chairmanship of the SADC management in Russia, called on Russia and its businesses to more actively leverage the goodwill and friendly relationships among partners. Thanking Russia for its active role at the UN for preventing the split of DRC as ‘envisaged by its 
foreign enemies,’ the ambassador called on Russia to more actively use its good reputation on the entire continent as ‘it was never a colonial master’ in the region. “I agree with the other speakers who have highlighted the need for more enlightenment programs on the ‘New Russia’ and ‘New Africa.’ Most of our difficulties in bi- and multilateral relations, especially in the business sectors, stem from the fact that most business leaders in today’s Africa do not know much about the ‘New Russia’ and vice-versa. But Russia’s lack of a ‘colonial past’ on the continent is a big advantage that the Kremlin and Russian businesses need to use more actively to leverage their positions in the entire region.”
The Zambian ambassador noted that there is a lot for Russia and SADC countries to gain from deepening ties, as both represent strategic investment destinations for businesses on both sides. “Currently, most of the ongoing cooperation between the SADC nations and Russia is done at the government-to-government level, whilst the need to fully tap the whole potential of the positive synergies resulting from the existing relations calls for urgent intensification of the private-business-to-private-business ties in our mutual relations.”
Speaking about his country, the ambassador listed several sectors, including the mining industry, the nation’s backbone economic sector, that Russian investors would find very attractive to commit their capital. “For instance, the mining sector, our key strategic segment, accounts for 8.4% of the nation’s GDP, 83% of its forex revenues earning and employs almost 60,000 workers,” he said. “Indeed, there are lots of projects in my country waiting for strategic investors, including new projects, existing and functioning assets offering equity stake ownership and others requiring rehabilitations/cash infusion, following halts in operations following acute capital shortages.”
Highlighting the business incentives in place at SADC for strategic investors, the ambassador noted that they are almost the same or similar in all SADC countries. “These include tax concessions, including tax-free period and/or lower taxation rates, absence of limitations on capital movements, including 100% capital repatriation, tax-free dividends policy, company ownership, avoidance of dual taxation on capital generated in the SADC region, and several incentives not offered anywhere else in the world, etc,” he added. “Besides, the SADC investment protection mechanisms are effected at two-tier levels — at the SADC and national levels.”
Contributions from other VIP guests
Speaking on behalf of the MFA, Kamensky noted that resurgence in the Kremlin’s Africa policy is aimed at promoting relations between the SADC countries and entire continent in general as Russia supports different variants of cooperation on the continent. “Specifically, all these steps are directed, first and foremost, at boosting trade and economic interactions with the SADC region and the entire continent as the current level of trade turnover figures are ‘completely not satisfactory’ to any of the parties,” he added. “To radically improve these figures, both sides will need to intensify their ongoing joint efforts in a broad scope of spheres. In this context, Medvedev’s recent visits to a group of Sub-Saharan African countries are an indication of Russia’s readiness to significantly intensify its cooperation efforts in Africa.”
Kamensky specifically noted that the MFA is seriously committed to promoting bilateral economic cooperation in several key industrial areas, notably, in the energy, mining, fishery, tourism and high-tech sectors with African countries. “This business forum is also geared toward the intensification of bi- and multilateral efforts from both sides, while the recommendations and exchange of ideas and opinions that will take place during the subsequent discussions between the SADC nations ambassadors and the investors present at this gathering will serve as guidelines toward the achievements of these objectives.”
“I need to note that today’s Africa is being run by a new generation of highly educated and forward-looking people — both in governments and businesses — that are very pleasant to work with.”
Dmitry Suchkov, the head of International Projects Division and Structured and Debt Finance Department at Vnesheconombank, who represented AfroCom at the business seminar in his capacity as the committee’s executive secretary, noted that negligence of Africa by post-Soviet Russia in the 1990s as it was engrossed in its internal problems that erupted from the collapse of the Soviet Union is now over. This is evident in the high-level of contacts between both representatives of governments and businesses from Russia and Africa in general and the SADC countries in particular, and joint efforts, including the formation of the AfroCom, to move the relationships into a new level. “Indeed, the key objectives of the AfroCom include amongst others the consolidation of all Russian business efforts in Sub-Saharan Africa and the overall improvement of trade ties with the entire region. In other words, the ultimate goal AfroCom is to act as a bridge between business opportunities in Russia and Sub-Saharan African countries.”
Viktor Polikarpov — an international relations adviser at Renova Group and the executive secretary of the Russia-South Africa Business Council, an alliance between the Russian and South African chambers of trade and commerce — noted the huge economic potential and the overall attractiveness of the SADC region and the entire continent for foreign strategic investors, calling the interconnections among the regional economies ‘a great asset’ that needs to be more judiciously harnessed by Russian strategic investors.
He listed several factors currently limiting the full use of the resultant synergies from the ongoing joint efforts being put in place by both Russian and African states governments, including the negative perceptions and archaic stereotypes that are still very rife in both sides’ media. “This is why more emphasis needs to be placed on the fact that today’s Africa and Russia are radically different from what they were about 20-30 years ago. Specifically, I need to note that today’s Africa is being run by 
a new generation of highly educated and forward-looking people — both in governments and businesses — that are very pleasant to work with,” he said, citing his over 30 years of interactions with political and business leaders on the continent. “On the other hand, Russian investors seeking business opportunities in Africa need to look more closely at the evolving opportunities which are ‘fascinating’ and try to respect the local traditions in the countries, where they have business operations.”
Rounding up the business forum, all the SADC noted that end goal of the ongoing efforts is full diversification of Africa in terms of business opportunities for strategic investors. For instance, this diversification, in the Zambian ambassador’s words, means that “if a foreign investor invests in one of the SADC countries, he/she is not only getting an unlimited access to the country’s market, but also to the SADC regional market. Besides, an investor can invest in tourism in one country, in the financial services sector in another and mining sector in other, and so on across the continent.”
In conclusion, all the ambassadors specially noted that their embassies are open to all investors seeking business opportunities in their countries and their readiness to provide all relevant data on projects that are of interest to them.
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