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Russian investors should seize the opportunity to invest in Ghana

Kester Kenn Klomegah

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For nearly six decades, Ghana and Russia have had an excellent diplomatic relations and still looking to build a stronger economic cooperation. In this exclusive GNA interview, Ms. Shirley Ayorkor Botwe, Minister of Foreign Affairs and Regional Integration, explains to Kester Kenn Klomegah, the Moscow Bureau Chief, a number of significant corporate projects being undertaken by Russians as well as some aspects of the current economic cooperation between the two countries.

Hon. Minister, how would you assess the current diplomatic relations between the Republic of Ghana and the Russian Federation?

Currently, Ghana and Russia have an excellent diplomatic relations, which has been developed over the years, precisely 59 years. Although, for a relationship lasting this long, one would have expected it to move past where it is now. In short, there is still room for improvement.

Specifically, what is the level of economic cooperation between the two countries? And what are your priorities in the economic and business sphere?

Ghana and Russia are presently building stronger economic ties. Through the framework of the Ghana-Russia Permanent Joint Commission for Cooperation (PJCC), the two countries have pushed forward the agenda of fostering economic cooperation, first and foremost, in their relationship. Two sessions of the Ghana-Russia PJCC have been held already following the reactivation of the PJCC in 2013, with the last one taking place in Accra in September 2016.

The PJCC brings government officials and business leaders of the two countries together to discuss and forge cooperation on a wide range of issues of mutual interest to both nations such as Peaceful Use of Nuclear Energy, Immigration, Narcotics Control, Reciprocal Promotion and Protection of Investments, Agriculture, Fisheries and Aquaculture, Mutual Legal Assistance in Criminal Matters, Trade and Industry, Geology and Mineral Resources, Education and Science, Health, Transport, Housing, Information Communication Technology, and the Military.

Russia is an Energy giant. Ghana has persistent energy problems. Do you think Russia can play a significant role in providing long-term solution and most probably support the proposed nation-wide industrialisation programme of the current government?

Certainly, Russia can play, and is being engaged to play, a significant role in the long-term generation of power in Ghana. Negotiations are progressing steadily between the Ministry of Energy of the Republic of Ghana and ROSATOM of the Russian Federation in the construction and operation of the first ever Nuclear Power Plant (NPP) in Ghana and West Africa, with Russian design power units 1000-1200 MW capacity, together with other affiliated nuclear projects. It is hoped that both sides would expedite the negotiations, come to early consensus and have the project take off in good time.

Ghana is open to all the support that it could get from its friends and development partners in the nation-building drive, particularly in the nation-wide industrialisation programme of ‘one-district-one-factory’ of the New Patriotic Party (NPP) administration. Ghana could benefit a lot from the rich experiences of Russia, which has advanced knowledge, in the area of industrialisation. In any case, getting the power generating project going will impact considerably on the programme since the role of electricity cannot be downplayed in any industrial development.

Hon. Minister, what opportunities and incentives are currently available for foreign investors especially in the medium scale (size) businesses in Ghana? What is your special message for potential Russian investors here?

Ghana has one of the most attractive investment packages for foreign investors in Africa. Opportunities abound in nearly all the sectors of the Ghanaian economy, for instance in transportation, construction, real estate, banking, health, education, manufacturing, energy, agriculture and commerce, for every kind of foreign investor and on any scale, being large, medium or small.

The investment incentives include tax holidays right from the start of operation up to five, seven and 10 years depending on the type of investment. Five years for real estate investment, seven years for waste processing investment and 10 years for free-zone enterprise or development are few of the examples. Besides these attractions, there are investment guarantees, beginning with the constitutional guarantee, investment laws that guarantee 100% transfer of profits, dividends, etc., as well as negotiations of Bilateral Investment Promotion Treaties (BITs) and Double Taxation Agreements (DTAs).

The message to Russian investors is that Ghana is the gateway to West Africa and, therefore, the right place to invest in West Africa and Africa as a whole. With solid political stability and security, together with the very attractive investment package and easy accessibility to the entire West Africa market, not to mention the legendary Ghanaian hospitality, investing in Ghana is worthwhile and extremely profitable to all foreign investors. Thus, Russian investors should seize the opportunity to invest in Ghana for it is the right time and the right place to be in Africa.

Ghana celebrated its 60th independence in March. In your opinion, what are the landmark achievements in the economy? How important are these achievements for attracting foreign business into the country?

Sixty years ago on 6th March, 1957, Ghana attained its independence from Great Britain. The country has had its share of ups and downs as expected of any growing nation or individual for that matter. The country has come a long way. A number of landmark achievements in the economy could be identified in most sectors – human resource development, telecommunication, services and infrastructure, among many others.

However, the prevailing stable political climate and security could not be overlooked. It is viewed to be the striking achievement of the nation at this point in time, out of which outstanding achievements could be attained in all the sectors of the country, be it the economy, health or education.

Finally, Ghana and Russia will also mark their 60th year of establishment of diplomatic relations in 2018. How would you like to see the diplomatic relations developed in the next few years?

As stated earlier, as much as there exists a very good relations between Ghana and Russia, greater efforts need to be employed in fostering stronger economic ties. It is hoped that as Ghana and Russia commemorate 60 years of formal diplomatic relations, the level of economic cooperation between them would catch up with the well-developed bilateral political relations in the coming years. Emphasis should also be placed on developing ‘people-to-people’ relations, whereby the peoples of both countries would have better understanding of each other. Cultural cooperation, tourism, dissemination of information of each other’s customs and practices should be emphasised in bringing the people together for their mutual benefit.

Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

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Africa

The role of nuclear in Zambia’s sustainable economic growth

Kester Kenn Klomegah

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On August 6th, the 92nd annual Agricultural and Commercial Show wrapped up after six entertaining and educational days in Lusaka, Zambia.

Thousands of visitors received information materials about the role of nuclear in Zambia’s sustainable economic growth during the 92nd annual Agricultural and Commercial Show.

The show was officially opened by President Edgar Lungu, who highlighted the importance of the show’s theme, which was ‘sustainable economic empowerment’.

He noted that the theme was directly in line with government’s aspirations espoused in the Second National Agricultural Policy (SNAP) to have an efficient, competitive and sustainable agricultural sector which assures food and nutrition security, increased employment opportunities and incomes.

The Zambian Ministry of Higher Education in collaboration with Russian State Atomic Energy Corporation ROSATOM hosted a dedicated information stand on the future Zambia Center for Nuclear Science and Technology (CNST).

Representatives of ROSATOM and Zambia’s Interim Secretariat on Nuclear Science and Technology (ISNST), constituted by senior officers from various Government Ministries and Institutions, worked on the stand, explaining the specifics and benefits of the future nuclear facility to thousands of Zambian visitors.

The stand provided the public with information on the nuclear technology that is set to assist Zambia to grow and be economically empowered, such as: food irradiation technologies, nuclear medicine (which is already being implemented at the Cancer Diseases Hospital), material science, radioisotope production and mineral identification techniques.

The materials were prepared by ROSATOM, ISNST and International Atomic Energy Agency (IAEA).

Dmitri Shornikov, CEO of Rosatom Central and Southern Africa, explained the future benefits of the Center and expressed the importance of educating the public on these benefits: “It is very important for the Zambian citizens to understand that the future Center will empower agriculture, medicine and industry, thanks to wide application of radiation technologies.”

“The CNST will also promote the growth of national education and science through the training of highly qualified experts in various fields. It represents the new stepping stone for Zambian scientific, economic and technological growth. Similar facilities have been contributing to more than 50 countries’ around the world for more than 60 years. Currently, there are 245 working research reactors in the world with 58 units operated in Russia”.

Mr. Reuben Katebe, National Coordinator of the ISNST noted that the Center was directly in line with the theme of the show as well as government’s policy and that it would help the agricultural sector to grow sustainably and ensure food security: “The use of radiation for food preservation will improve food safety and create conditions for the increase of Zambian agricultural exports. We hope that our information stand helped many farmers to understand all the benefits that the Center will bring to them.”

Apart from agriculture, healthcare will also benefit from the Center’s activities like single use medical product sterilization,” said Mr. Katebe: “The radioisotopes produced here will be used to diagnose and treat primarily cancer and cardiac diseases. This Center will increase availability of high-tech nuclear medicine for Zambia’s population.”

For reference
State Atomic Energy Corporation Rosatom and the Republic of Zambia signed a general contract for the construction of a Center for Nuclear Science and Technology (CNST). The signing took place during the 10th international Atomexpo-2018 forum in Sochi. Construction of the center is the first joint project of Russia and Zambia in the field of nuclear technologies.

The center will be located 10 kilometers away from the capital of Zambia, Lusaka. The CNST will include a nuclear research facility based on a multipurpose research water-cooled reactor of up to 10 MW, a state of the art laboratory complex, multipurpose irradiation center as well as a cyclotron-based nuclear medicine center.

The project will be implemented in several stages within 3-6 years from the work commencement date under the contract. Rosatom has built more than 120 research reactors in Russia and abroad.

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China- Africa Framework: Strategic Cooperation

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The Forum for China Africa Cooperation (FOCAC), built up to link relations between the two states, is due to hold its next meeting later this year. This evaluates what the benefits from that meeting will be on this developing, active, and mutual relationship. China’s engagement in African states goes back several years. In the last decade, from the mid-1950s to late 1970s based more on spontaneous confidentiality than that of 1980s and the period after the cold war. currently, the relationship sets up more on pragmatic economic considerations and cooperation. China is already Africa’s third largest trading partner. This multi-leveled partnership between China and Africa is both intricate and active. As China and its African participants arrange everything for the next FOCAC summit.

What does China want in Africa?

China’s relationship with African countries is very active, some perspectives have sustained stable. The most significant of these are the principles and outcomes of Chinese foreign policy through African and other developing countries. According to the Beijing’s Africa Policy issued in January 2006, China will: China-Africa friendship, will be proceeding from the basic benefits of both the Chinese and African peoples, build up and develop a new kind of strategic partnership with the African continent, presenting political equality and mutual trust, economic win-win cooperation and cultural exchange

The fundamental laws and aims for leading Chinese foreign policy in Africa as set out in this arrangement of government policy are: (1) Goodwill, friendship, honesty and equality; (2) Mutual benefit, cooperation and common prosperity; (3) Common mutuality, support and close reciprocity; and(4) Learning from each other and pursing, sharing common development. This mostly is the government expression of how it views, and ambitions, to manage its relationship with the African continent.

While the Chinese policy announcements are mostly clear; there is still skepticism about what China wants in Africa. Take the principle of non-intervention, one of the Five Principles of Peaceful Coexistence, which have been regularly highlighted guidance of Chinese foreign policy in one hand, and its Africa policy in the other. The most significant examples are Sudan and Zimbabwe. In current years, Sudan has seen a conflict of perspectives, with the US and other superpowers placing pressure on Beijing government to use its impact in Sudan over the condition in Darfur, and China responding that it is preferable to help in continued development in such states, and determining them this way. Therefore Beijing’s commitment to non-interference in African domestic affairs and its intention to establish partnerships based on cooperation and mutual respect have been generally welcomed by leaders of the African continent, just as it has got some critiques from the West especially the US.

To some extent does China manage Sino-Africa relations?

Yet, Chinese national interests in Africa are multi-aspects and multi-leveled, so the aspects who engage in China’s Africa policy making and implementation are generally diverse. This faces great challenges for China’s management capability, which is the real reason why FOCAC was established. Similar to the different trend of China’s interests and outcomes in Africa, we can highlight many types of aspects who have a sound in China’s Africa policy-making and performance. First of all and most important type of aspect is the government, both central and provincial, including officials–diplomats and other state-owned enterprises. Secondly coves several private corporations and their representatives in Africa. Inspired by the Chinese government’s “Go Out” policy, these private entrepreneurs chanced to Africa in seek of business opportunities. The third and importantly significant aspect is individuals, both influential middle-businessmen and the general Chinese laborers in Africa, which may amount to somehow a million people by 2009.

With the number of aspects rising, the traditional decision-making and strategy implementation system is under great pressure. In term of policymaking, power is centered at the top, in the Office of the Foreign Affairs of the Communist Party of China (CCP) Central Committee and the Foreign Affairs Office of the State Council. The top engine of executive power is the State Council, which includes the premier, vice premiers, and ministers. The Ministry of Foreign Affairs points out Chinese leaders and helps implement African policy. It cuts responsibility between a unit for Sub-Saharan Africa and one for West Asia and North Africa. The Ministry of Commerce plays a significant job in trade, aid, and investment. It has a Department of Foreign Aid. China’s State-owned Assets Supervision and Administration Commission (SASAC) is equally ranked with the Ministry of Foreign Affairs and the Ministry of Commerce. SASAC is either mostly owns a state-owned enterprise (SOE) or sustains a supervising share of stock in a public SOE, several of which function in Africa. SASAC has branch offices in African countries. China’s Export-Import Bank is the only state-owned firm that allocates official economic assistance in the frame of low-interest loans, export credits, and guarantees. Additionally, The CCP’s International Department communicates with African representative to lay the pillars for business trading and diplomatic cooperation, encourage visits and to ensure that policies are implemented in accordance with CCP strategic goals.

What are the Challenges of China In Africa?

Under the policy of FOCAC and its follow-up perspectives, China has adopted its Africa policy-making and implementation and made several contributions to African development. However, the challenge of China-Africa relation is based on two main aspects. The first, the Chinese economic slowdown decreases the resources that are likely accessible for the next FOCAC meeting. Xi Jing ping said at G20 summit that China will, within its goodwill and potentiality, carry on to enhance its aid to Africa, decrease or cancel African states’ debts, enlarge its trade and enhance business investment in Africa, achieving the commitments it made during the Beijing Summit of the Forum on China- Africa Cooperation in 2017. On the other hand, because China’s economy now is export-oriented, the situation will greatly reduce the volume of China-Africa trade due to the western states’ needs decreasing. For instance, 50% of Sudan’s oil exports ship to China, but this number does not mean that this oil is bought by Chinese consumers. As a matter of fact, China National Petroleum Corporation(CNPC), the company which subdues the oil transactions between China and Sudan, does not sell the oil imported from Sudan on the Chinese domestic market. Instead, CNPC sells it on the international market for many profits. And in 2006, Japan was the largest single recipient of Sudanese oil. Now, because of the economic problem, the needs of the international market have dropped off.

Conclusion

The last decade has observed a key and very important enhance in China’s engagement in Africa. FOCAC was built up and is now working, as the main means by which to manage dialogue and talk between different African countries and China over where the general direction of this partnership should go. Basically, it gives an integrative foundation for treating Africa as a single actor, which will surely promote the identity-building of Africa and differentiate itself from other relationship. In the coming years, China will surely enhance its interests in the African continent. Therefore. the FOCAC process provides Africa a new opportunity for a partnership with China and the prospect of a long-term win-win partnership with the world’s largest-growing economy.

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Building a nuclear industry in Africa

Kester Kenn Klomegah

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Russia’s nuclear energy diplomacy in Africa has hit stumbling blocks, it’s been at the crossroad over the past two decades after the collapse of Soviet-era.

In order to find long-shelf solutions to chronic power shortages, African leaders and Governments that have shown interest in adopting Russian nuclear energy, signed necessary legal documents but lacked the needed funds for prompt implementation and final realisation.

“Rwanda’s annual budget stands at US$3 billion while the construction of the nuclear power plant would cost not less than US$9 billion which is equivalent to Rwanda’s entire gross domestic product.” David Himbara, Rwandan-Canadian Professor of International Development at Canada’s Centennial College, wrote in an emailed interview.

He said that Rwandan President Paul Kagame always believed that he must validate his supposedly visionary and innovative leadership by pronouncing grand projects that rarely materialised.

Currently, all African countries have serious energy crisis. Over 620 million in Sub-Saharan Africa out of one billion people do not have electricity. It is in this context that several African countries are exploring nuclear energy as part of the solution.

There is only one nuclear power plant on the entire African continent, namely, Koeberg nuclear power station in South Africa. Commissioned in 1984, Koeberg provides nearly 2,000 megawatts, which is about 5% of installed electricity generation in South Africa.

According to Himbara, “Of all African countries that have shown interest in nuclear energy, none have so far gone beyond the stage of conducting preliminary feasibility study, project costing and financing models, except South Africa.”

But, the South Africa US$76 billion deal with the Russians to build a nuclear power plant collapsed along with the Government of Jacob Zuma that negotiated the deal in secrecy, in fact when such corporate projects have to be discussed by the parliament and necessarily have to pass through international tendering process, he pointed out.

Russia and South Africa concluded an intergovernmental agreement on strategic partnership in the nuclear sphere in 2014. The agreement provided in particular for construction of up to eight NPP power units.

“Nuclear waste will pile up, and where are they going to put it? The Sahara? The US is always trying to force nuclear waste repository on some poor or indigenous community and when that fails, the waste keeps piling up at the reactor sites, creating greater and greater environmental risks,” he said.

He added that “Managing nuclear waste and its safety is universally complex and dangerous. The Chernobyl disaster in Ukraine and Fukushima in Japan, remind the world of the human and environmental costs of nuclear power accidents. Millions of people are still suffering from radiation and radiation related diseases till today.”

Foreign Minister Sergey Lavrov, in an interview with the Hommes d’Afrique magazine in March, described Africa as rich in raw material resources, including those that are required for high technology and for moving to a new technological pattern. Apart from mining, Russia and African countries are cooperating on high technology.

What was more important for Africa’s energy sector when he informed that Rosatom has been considering a number of projects that are of interest to Africans, for instance, the creation of a nuclear research and technology centre in Zambia. Nigeria has a similar project. There are good prospects for cooperation with Ghana, Tanzania and Ethiopia. Talks are underway on the construction of a nuclear power plant in South Africa.

Shadreck Luwita, Zambian Ambassador to the Russian Federation, informed that the processes of design, feasibility study and approvals regarding the project have almost been concluded. The site of the project is yet to be designated as it is equally a process and it is envisaged that construction should commence, in earnest, not later than the second half of 2018.

In addition, he affirmed that the Russians envisaged technology transfer in the development of this massive project by way of manpower development capacity. For now, there are only a few Zambian nationals, who are studying nuclear science in one of the Russian universities in Moscow.

The Zambian Government hopes that upon commissioning of this project, excess power generated from this plant could be made available for export to neighbouring countries under the Southern African Development Community Power Pool framework arrangement.

From all indications, Russia wants to turn nuclear energy into a major export industry. It has signed agreements with African countries with no nuclear tradition, including Rwanda and Zambia. And is set to build a large nuclear plant in Egypt.

Interestingly, Egypt’s dreams of building nuclear plant has spanned with agreement that was signed (as far back in March 2008) during official visit to the Kremlin by the ousted President Hosni Mubarak, and then again with former Egyptian leader Mohammed Morsi who discussed the same nuclear project with Vladimir Putin in April 2013 in Sochi, southern Russia.

During the dawn of a new era, Vladimir Putin and Abdel Fattah Al Sisi signed an agreement to set up four nuclear plants in El Dabaa, on the Mediterranean coast west of the port city of Alexandria, where a research reactor has stood for years.

The deal signed on the heels of talks held between Putin and Al Sisi, where both expressed high hopes that Russia would help construct the country’s first nuclear facility. Egypt began its nuclear program in 1954 and in 1961, acquired a 2-megawatt research reactor, built by the Soviet Union.

However, plans to expand the site have been decades in the making that Rosatom will provide its fuel, personnel training, and build necessary infrastructure. The four blocks of the nuclear power plant will cost about $20 billion.

However, Director Anton Khlopkov and Research Associate Dmitry Konukhov at the Center for Energy and Security Studies, co-authored a report to Valdai Discussion Club, part of RIA Novosti Agency, that success of Egypt’s nuclear project depends on three key factors.

These are the political stability and security situation in Egypt, a viable financing mechanism that reflects the country’s economic situation, and the government’s ability to secure support for the project among the local residents of El Dabaa, the site chosen for Egypt’s first nuclear plant back in the 1980s.

In reality, Ghana has a similar never-ending dreams and fairy tales of owning nuclear plants. The agreement re-signed on June 2, 2015. The Russian reactor, 1000 MW plant, will cost a minimum of $4.2 billion. The financing scheme has not been finalised. And it will take about eight to ten years from site feasibility studies to commissioning of the first unit.

As local media reported, Ghana’s quest to industrialise for economic growth and development has fast-tracked plans to establish nuclear power in the country within the next decade, that means by 2029 and export excess power to other countries in the sub-region.

With “One District, One Factory” – Ghana’s industrialisation agenda might not be realized under Nana Addo Dankwa Akufo-Addo’s administration based on the roadmap of the nuclear power programme to commence construction by 2023 and inject nuclear energy into the grip by 2030.

The African countries’ MoUs and Agreements with RosAtom including Nigeria, Kenya, Tanzania and the rest are stacked. Nearly three decades after Soviet collapse, not a single plant has been completed in Africa.

Some still advocate for alternative energy supply. Gabby Asare Otchere-Darko, Founder and Executive Director of Danquah Institute, a non-profit organisation that promotes policy initiatives and advocates for Africa’s development, wrote in an email that “Africa needs expertise, knowledge transfer and the kind of capital imports that can assist Africa to develop its physical infrastructure, add value to two of its key resources: natural resources and human capital.”

Russia has respectable expertise in one key area for Africa: energy development. “But, has Russia the courage, for instance, to take on the stalled $8-$10 billion Inga 3 hydropower project on the Congo river? This is the kind of development project that can vividly send out a clear signal to African leaders and governments that Russia is, indeed, ready for business,” he said.

The renewable energy potential is enormous in Africa, citing the Grand Inga Dam in the Democratic Republic of Congo. Grand Inga is the world’s largest proposed hydropower scheme.

It is a grand vision to develop a continent-wide power system. Grand Inga 3, expected to have an electricity-generating capacity of about 40,000 megawatts – which is nearly twice as much as the 20 largest nuclear power stations.

Researchers and Experts strongly believe and further estimate that the cost of building nuclear power does not make any sense when compared to the cost of building renewables or other sources of energy to solve energy shortages in Africa.

According to the company profile, Rosatom offers a complete range nuclear power products and services from nuclear fuel supply, technical services and modernisation to personnel training and establishing nuclear infrastructure. Currently, Rosatom has built more than 120 research reactors in Russia and abroad.

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