Russia’s Industrial Giant Rostec To Invest $7 billion in Uganda and Zimbabwe

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Russia’s Industrial Giant Rostec To Invest $7 billion in Uganda and Zimbabwe

There is an adage that says an enemy of my enemy is my friend. Perhaps those are too strong words to use in describing Uganda’s and Zimbabwe’s new partner in development, but too mild words in the case of Russia.

Be that as it may, RT Global Resources, a 100%-owned subsidiary of Rostec – a government-owned industrial giant, won a contract to build and operate an oil refinery in Uganda back in February. The move by the government of Uganda to award the contract to a company linked to Russian arms exports raised a lot of questions from the opposition lawmakers. Rostec, the parent company, is said to be on track for constructing a $4 billion oil refinery in the country and another $3 billion platinum project in Zimbabwe. Russian development bank, Vnesheconombank (VEB) is expected to finance the project.

Note, Uganda and Zimbabwe are not legally obliged to comply with the United States and European Union’s sanctions against Russia. It would also be  important to point out that Uganda and even more so, Zimbabwe are not exactly in good terms with the said Western countries. The West imposed sanctions on Russia after its annexation of the Crimea region and supplying separatists group with troops and ammunition; accusations which Moscow has vehemently denied

Rostec is a giant conglomerate controlling hundreds of different firms ranging from the arms exporter Rosoboronexport to the leading world’s producer of titanium VSMPO-Avisma. The company has seen Africa as a potential market for its products, especially for its arms products.

Moscow has traditionally focused on the Asian market, ever since the United States and the European Union sanctions were imposed last year. But the deals Rostec is making in Africa ushers a new frontier for the export market for Russia’s weapons and technology. Africa was once a big market for the Russians under the Soviet Union regime, but it later pulled out due to low commodity prices in the African market.

Rostec said that it is looking forward to doing business with African countries interested in boosting their defense sector. Before the collapse of the Soviet Union, Moscow was a big exporter of weapons to the African continent. It has since fallen back to the second position after the United States; even though Russia’s sales in the African market account very little to its total sales volume.

In a statement, Rostec said, “Many countries on the African continent are traditional partners of Russia in military and technical cooperation, quite familiar with the quality of Russian weapons.”

The company added that the Soviet weapons still in use across Africa require repairs and supports further demand for Russian weapons. In 2013-2014, Rosoboronexport signed over 20 contracts across the sub-Saharan African continent worth over $1.7 billion. Rostec said that it planned to increase shipments to Africa even further in the coming years.

Currently, Rosoboronexport is working with Nigeria, Angola, Tanzania, Namibia, Equatorial Guinea, and Mozambique. It is also working on developing working relationships with Kenya, Ethiopia, Rwanda and Djibouti.

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