Racing for New Riches
Russian and Chinese investors are battling for African resources to fuel their growing empires.
Late on a Friday at the Simba Saloon in downtown Nairobi, music by the Kenyan pop sensation Boomba Clan is playing, and the ties are coming off. At the bar, financial types swap news of the latest bank IPOs and mineral concessions—the must-have gossip in Africa's biggest boomtown. Some of the conversations are in English. Some are in Chinese. And increasingly, many are in Russian, as Moscow begins to give both the West and Beijing a run for their money in the race for Africa's riches.
Today emerging-market giants are fighting for oil, gas and metal ore in Africa as energetically as 19th-century European colonialists grabbed land. The Chinese have been the most aggressive, with more than 700 companies active in 50 countries, according to Standard Bank of South Africa. China is now Africa's second largest aid donor and trading partner, behind the United States, with trade up fourfold to $40 billion since 2000.
But Russia, the second most-active emerging-market power, is gaining. While trade with Africa is only $3 billion a year (up threefold since 2000), Russian companies flush with cash have sunk more than $5 billion into buying up African assets since 2000—and that's not counting $3.5 billion of oil-exploration deals coming online by the end of the decade. (Over the same period, China has put $6.7 billion into Africa, but much of that money has been sunk into infrastructure projects like telecom, electric power, water conservation, transportation and agriculture.)
Pushed by the profit motive, and by a Kremlin eager to build economic empires, Russian businessmen are heading south. Africa, like Russia in the early 1990s, is full of basket-case economies with great mineral wealth—and the Russians reckon they know how to deal with those conditions. Russia has strongly encouraged its companies to buy assets around the world because it suits President Vladimir Putin's philosophy of restoring his country's international position. Recent energy deals in Algeria have gone hand in hand with $4 billion in arms sales from Moscow. Russian businesses interested in South Africa have gotten a boost from a deal Putin made with President Thabo Mbeki to expand nuclear cooperation. Last September Putin made a whistle-stop tour of Africa with several top Russian oligarchs in tow—including Viktor Vekselberg, who pledged to invest $2 billion in metal and mining projects in Africa.
While the Chinese are staking ground in Africa mainly to power their burgeoning cities and manufacturing sector, Russians see the deals differently. Russia is the world's largest energy exporter, and has plenty of its own metals and minerals. But rich Russian companies want to extend their global reach while they have the money, and with oil approaching $100 a barrel in recent weeks, the time is now. There's another motive, too, analysts say: moving empires beyond the reach of the Kremlin serves as insurance against future political changes in Russia.
Over the last three years, four top Russian metal companies have invested more than $5 billion in sub-Saharan Africa alone. Russian oil giants Lukoil, Rosneft and Stroytransgaz have signed exploration deals in Algeria, Nigeria, Angola and Egypt worth more than $3 billion. Earlier this year Lukoil snapped up 63 percent of a field off the Ivory Coast in a production-sharing agreement with the Nigerian owners.
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Member Comments
Posted By: badra818 @ 12/12/2007 1:43:11 PM
Comment: God knows I'm tired of hearing about the black men's sufferings. Truth is suffering is part of live although blacks I've had more. I'm a black man myself, but we as Africans need to do more. I live in the U.S. and all I hear grown, able black men say is "the white is trying to keep me down" when the truth is they aren't even there for their kids. Stop blaming and start doing!
Posted By: ExposeTheTruth @ 12/01/2007 7:32:45 AM
Comment: Linda, you are absolutely right on target. The USA, Russia, and China have economically invaded the continent of Africa and could care less about Africans as a people. When have the USA, Russia, and China ever cared about the plight of the black race in Africa. They are there for one reason and one reason only, to suck the land dry of its natural resources while religious, ethinic, social issues, healthcare issues, and poverty destroys the people from within. They actually need the chaos that civil wars bring in order to keep the continent destablized so that they will not be resisted by the majority of the corrupt leaders in charge. They are not interested in "Democracy". The "Super Powers" are there to line there companys that are over there with a continual flow of oil, minerals, and farmland so that they can eventually set up military bases in the region expand their empires. Jesus said, "That his eye is everywhere beholding the evil and the good". USA, Russia, and China may fool the World, but there is a recorded being kept in heaven that neither of them can tamper with.
Posted By: lindabew1 @ 11/29/2007 10:31:36 AM
Comment: Linda's Reply to Matt:
Jesus Christ gave the called Ministers of his gospel to: "Preach repentance and remission of sins." As a minister of the gospel, (Which is good news), is to preach to sinners to let them know where they are wrong and how to amend their ways unto "The Living God." That Living God came in the form of "Jesus Christ." who died for our sins, and to redeem us back to the God that created us. And upon your repentance for the sins that God hate, that God will receive you again. But if you refuse, you will indeed, see his wraft to come...
...God hates sin, and he explains it through-out the Bible. God hates murder, racial hatred, greed, people who causes the poor to suffer, people who are cold and heartless, people who have no remorse for their sins, rape, people who kill their children and etc., and all the things that I can add that have caused this earth to be in the shape that it is in.
I WOULD do God a miss service (Being a called Minister) by him, not to preach the gospel. Preaching the gospel is to correct men/women/ about sins that GOd hates..."Apparently, people like you, who don't want to except the truth or face the facts that you have a problem with "TRUTH."
JESUS CHRIST, calls these kinds of people his enemies. "Are you an enemy of Jesus Christ?"
OUR WORLD is in great trouble worldwide. This globe is being filled with volience and murder. Hate is on the uprise. The earth has taken its toil of pains and grief. Children are being killed, parents are being murdered. Our Government is out of control. Our Media is out of control. Police have taken the laws that were to be in service for the just, and twisted the laws to do wrong themselves. Killing people, and telling lies to cover themsselves in crimes that they committed.
AND YOU tell me, I am full of "HATE!" Because, I speak on the truth.
I WILL NOT BITE my tongue. I will continue to preach and teach the truth of the gospel of Jesus Christ. You should be "GLAD" its me. Because if it were Jesus here preaching this day in person, "You wouldn't be able to stand."
I BACK UP my words as key points of the matters of how men are treating other men of the same blood. We all are of (ONE) blood. When blood is given to saved the life of another man, the doctor, does not ask, "Is that blood from a black man?" "If the blood is from a black man, I don't want it." "Go and get me the blood of a white man."
IT IS WRONG to see other Nations suffer, and not go their rescue. Let them die, children and all, and turn around, go their land or country, and put them in slavery or reap the goods, while they live in all the riches of that land.
IT IS WRONG to use that country resources, and build good houses and keep the wealth to themselves, while the people of that country continue to suffer, and be in lack.
IT IS WRONG for America to hold back on the very people who have slaved and worked just as hard, and not permit or allow them the freedom that God gave to all.
Sincerely,
Linda