Zimbabwe is close to signing a $1.4 billion deal with Russia for the trade of precious stones for fuel supplies, the Business Times reported on November 21st.
The deal is reportedly slated to include the world’s largest diamond producer, Russia’s Alrosa and the Swiss company Tatneft, which will provide fuel in return for diamonds from the Zimbabwe Consolidated Diamond Company (ZCDC).
The deal is expected to be signed by the end of November 2019, as per unnamed sources.
“The deal is expected to come into effect in 2020 and the diesel supplies will run for a period of three years,” an unnamed source familiar with the developments said.
The Russian company would estimate the value of the gems and notify each side.
“Due to fluctuations on the global market, Tafneft will have the liberty to reduce the value of the diamonds by 30%. The diesel will be supplied via the Port of Beira,” the unnamed source said. “Under this arrangement, Tatneft is expected to deliver high quality diesel 50 ppm [parts per million] after Alrosa pays for the commodity 30 days after delivery. The Reserve Bank of Zimbabwe is expected to sign this contract on behalf of Zimbabwe.”
On the part of Zimbabwe, the agreement will be signed by the central bank of the country, which, after hyperinflation reaching tens of billions of percent, is trying to restore the financial system and return to issuing its own national currency, the Zimbabwean dollar, which was resumed after a 10-year break last summer.
From 2009 to 2019, Zimbabwe used the US dollar, Euro, British pounds and the currencies of neighboring African countries for payments. In June, the Zimbabwean Central Bank restarted the national dollar, the rate of which has since collapsed 360 times: from 1 to 360 Zimbabwean dollars for $1.
Zimbabwean Finance Ministry spokesperson Clive Mphambela referred questions to the Energy Ministry. Energy and Power Development minister Fortune Chasi said:
“I am sorry, I wasn’t part of the delegation that went to Russia, I was in Mozambique so I cannot comment on that. But if you try after two days, I might help you.”
Throughout the entire 2019, Zimbabwe has struggled with irregular fuel supplies, power outages and a weakening domestic currency. These factors, in addition to a drought and a cyclone have outlined an expected shrinking of the economy of about 6.5%.
Zimbabwe has relaxed its indigenisation law as it seeks to attract investment.
“Of course, we will only be ready to participate in projects in cases where we can have management control and operational control of the assets,” Alrosa chief executive Sergey Ivanov told Reuters.
That would mean a stake of at least 51%, he said, adding that he would be confident of achieving that if it gets to the stage of detailed discussions on how to advance the project.
Reports on the matter in MSM are yet to surface, but it is simply a matter of time until the “Russians in Africa” hysteria is reignited, since it’s been one of the most successfully propagated narratives throughout the year.
It should be noted that the Russia-Africa Summit took place in Sochi on October 23-24th, and it saw representatives of all 54 African nations, including 43 heads of state travel to Russia in the event co-hosted by Russian President Vladimir Putin and Egyptian President Abdel Fattah el-Sisi.
Russia concluded quite a few deals, and Putin mentioned that, unlike the Western establishment, Moscow relied heavily on guaranteeing the African countries’ independence and sovereignty.
“We see how an array of Western countries are resorting to pressure, intimidation and blackmail of sovereign African governments,” Putin told TASS in an interview ahead of the summit, adding that Russia was ready to provide help without “political or other conditions.”
“Our country played a significant role in the liberation of the continent, contributing to the struggle of the peoples of Africa against colonialism, racism and apartheid,” he said.
The promises of funding, large-scale project and protection of sovereignty were repeated by billionaire Konstantin Malofeev who was a speaker at the summit.
“Regime change is promoted by the West to keep African countries scared and weak, so the West can influence them,” Malofeev said during one of several sessions with the word “sovereignty” in the title. “And we in Russia know what we’re talking about, because we’ve come a long way to win our economic sovereignty.”
Malofeev is the head of the Moscow-based International Agency for Sovereign Development (IASD), which was established in 2019.
He said IASD would work to help African countries find “African solutions to African problems.” By the end of the summit, IASD had signed contracts for advisory roles in the Democratic Republic of Congo, Guinea and Nigeria in efforts to attract $2.5 billion in funding through sovereign debt.
The format of the summit will continue happening every three years and it will undoubtedly provide a lot of fuel for anti-Russian propaganda in Africa.
It is likely that MSM’s favorite Yevgeny Prigozhin will soon have another face that will be part of every piece of propaganda related to Russia – Konstantin Malofeev.
Since, as it has become apparent – regardless of what Russia does, or its officials say, Moscow is always up to something “nefarious.”
Accusations of debt traps and various increases in military presence, maybe by some private miltiary contractors are sure to surface soon. And despite Zimbabwe appearing to be keen on concluding a deal with Russia that appears to be largely fair and to the benefit of both sides, MSM knows best – Moscow allegedly wants to strongarm most of Africa in submission.
MORE ON THE TOPIC:
- Africa in the New Era of Great Power Rivalry
- Russia-Africa ‘Shared Vision 2030’: Alternative to Neo-Colonial Pillage
- Russia Is Set To Expand Its Influence In Africa