Russia and Ghana will use national currencies when trading with each other. As it became known, the central banks of the two countries are already working on this. Cards from the Russian payment system Mir may also be introduced in Ghana. In an interview with the African Initiative, an entrepreneur from Ghana, Dr. Ebenezer Obeng, spoke about the changing attitude of Russian business and the state toward Africa, the impact of sanctions, favourable tax regimes for business in Ghana, a free trade zone with other African countries, and promising areas for investment, as well as how his business in Russia began with the supply of medical supplies to his country during the pandemic to now supplying everything – from petroleum products to fertilisers.
Q: Tell our readers about yourself and your businesses in Russia and Ghana.
A: I am the founder of Obeng Prime. The company was registered in 2021 in St. Petersburg and has a branch in Ghana. We promote Russian business in Africa. I started my business by supplying medical supplies to Africa. During the COVID-19 pandemic, we supplied masks and COVID testing kits from Russia to Africa, mostly Ghana. Then we began to enter into contracts for the supply of petroleum products from Russia and products from Ghana that Russia needs. We have expanded the business to other countries in Africa. The fact is that in Africa, there is a so-called free zone. If you have a company in Ghana, you can operate in other African countries with very friendly tax systems.
Q: Why did you decide to work with Russia?
A: Russian business was concentrated in Europe, the USA, the countries of the former USSR and Asia. And so in 2021, I suggested to one Russian company: “Look, China has gone to Africa, and they are making good money there. Africa is a developing country that needs a lot of products, a lot of goods. We don’t produce everything. Why don’t you expand your interests to Africa?” That was my message. And gradually, some Russian companies became interested. Yes, at that time, it was difficult to do. But we offered our help and gradually began to work with Russian companies, helping them and showing them that doing business with Africa is not so difficult nor scary. We managed to convince even state-owned companies of this.
During this time, COVID came and slowed down business. But we contacted companies that make medical products and began supplying them to Africa. Last year, when a special military operation began in Ukraine and sanctions were imposed against Russia, few Russians realised that they needed to look at opportunities to sell their products rather than concentrate on Europe. And then my idea, which I had been thinking about since 2021 – even before the start of the SVO – became very useful even for the Russian Government because Russia wanted to improve relations with Africa in trade and other aspects. This is what I thought about before and proposed to Russian companies. So, I think now is a very good time for cooperation between Russia and Africa for effective and efficient business. I am pleased that we have become one of the first agencies helping the Russian Government and Russian companies expand their interests in Africa through mutually beneficial agreements.
Q: Is it difficult for you, as a foreigner, someone who came from another continent, to do business in Russia?
A: Of course, there are certain difficulties but they exist everywhere. When I started registering my company in Russia, I went through a notary in January 2021. The first time, I received a refusal without justified reasons. As a result, I was able to register the company only in March 2021. I was even shocked at how smoothly everything went.
There is bureaucracy, but it’s not that scary; you just need to know the information and do everything on time. Here, you need to submit tax returns every month. Through the accounting programme, you can submit everything. But you must do it on time. If you don’t make it in time, you pay a fine. Everything is very well organized and therefore, you just need to be able to do everything on time. I won’t say this is a problem. This is the system here, this is how we should work.
I want to say that the Russians really want to help. When you tell them about yourself and your business ideas, they are very happy to be a part of your story. They are very happy to see Africa. I haven’t met a single person whom I’ve told about my business and found no interest in helping.
Q: How different is doing business in Ghana from Russia?
A: In Russia, when starting your own business and registering a legal entity, you must first get an office, which you pay for even before submitting your application. Therefore, you will pay for this office when the tax authorities have not even given permission yet. In Ghana, if I just registered a company, I don’t have to file any paperwork or provide a registered address. Our system does not check all this information and so you can do without it. Nobody will make claims against you.
In Russia, before you start making money, you will still have to maintain the business and bear the costs of maintaining it. Because when you open an office, for the first three to six months, you still have no income; but there must be an accountant who submits your declarations even if they are zero, and this must be done by a professional. You must pay your employees. So the problem with running a business in Russia is the finances, so you need to have capital to finance the business that will run for a year until you start earning a decent income. In Africa, you can get by without many additional costs. No one will take money from you to pay tax at the end of the month.
And when we started our business, there was also a logistics problem due to COVID. Many institutions were closed. When you sent goods from Russia to Africa by air, it could take three weeks, instead of the usual three to four days maximum. The logistics problem was a very big blow for us. Our company is mainly engaged in international transportation. Last year, when sanctions were introduced against the Russian economy, this was also very difficult because it was necessary to transfer money and this became a problem. But later, we were able to find our own solutions.
Each specific place has its own difficulties. However, thanks to developed communications and the ability to work on the Internet, here in Russia, you can be easily recognised. Many companies, businessmen and officials can easily find out about Obeng Prime. All this is possible thanks to the Internet and good relationships with our past customers.
Q: What areas are the most promising in trade relations between Russia and Ghana?
A: Now we need medicines, fertilisers, and oil & gas. Our company does all this, but the list can be expanded. We have interest in other businesses.
The products we bring here from Africa are cashew nuts, cocoa, cocoa powder, cocoa butter. Cocoa cake is used to make chocolate. The oil is used for cosmetics and other products. Coffee is also interesting. This is what we do now, but we can work with any product. We work mainly on request: a Russian company contacts us for any reason – they need such and such a product from Africa – we provide it when it is ready.
Q: What about economic growth on the African continent
A: Africa has high potential. There has been a lot of investment in Africa over the past decade. Now all countries of the world are actively trading with Africa. Europeans are moving, Americans are moving. The Chinese have already settled because they understand this opportunity. Back in the late nineties, the Chinese realised this opportunity. And they have already done a lot in Africa. Everyone wants economic cooperation. So I think the African economy is going to have a big boom in the next five years.
Q: What sectors of the economy are most interesting for development and investment in Africa?
A: You know that the world is becoming more digital. Telecommunications, Internet, information technologies, Fintech – all these are areas of business that can be developed in Africa. Internet speed in Ghana is very slow compared to what we have here in Russia. You can invest in this.
We export most of our products as raw materials. We process some products into semi-finished products and then export them, but we export most products in raw form. Accordingly, the development of the manufacturing industry is also very promising. Try to create industries that will process raw materials before exporting. This would be interesting and economically very beneficial to Africa.
For example, raw cocoa is sent to Europe and other countries to be processed into chocolate, and then returned and sold back in Ghana at exorbitant prices. We send coffee to be processed into finished coffee and then import it back to buy expensive coffee. Of course, the same thing happens with oil and gasoline. So there are huge opportunities and prospects in the manufacturing sector.
Also, as a doctor, I will talk about aspects of healthcare because the healthcare that we have in Russia is much more developed than in Africa. So I think investors can also invest in healthcare, hospitals and the healthcare system in Africa. That will be great too.
Furthermore, agriculture is a viable sector. We have vast lands but we import most of the food we eat. We import a lot of rice from China and other places. But some of the crops can be grown in Africa. We need investors.
Q: Africa imports a lot of food products, are there any projects for the development of the agricultural complex of Ghana and Africa as a whole?
A: For now, most of what we eat is imported, and this is very bad. Russia has what we call food security. I think if we invest in agriculture, we will definitely achieve this food security. Therefore, in Africa we can harvest two or three crops a year, and we will be able to feed ourselves and even export products. And we will be able to regulate food prices. We import rice from China, Thailand and other places and cannot regulate prices. Prices are highly dependent on logistics and customs taxes.
We have an agricultural project. We want to see investors in Ghana who will build fertiliser factories, engage in livestock farming, raise poultry, and so on. We have projects that we want investors to help us implement. If we can invest well in the agricultural sector, we can stabilise our economy.
Q: Member of the Malian Parliament AliuTunkara said in an interview with our agency that Africa now needs to develop education and invest in human capital. How is education in Ghana?
A: We really need education – it is the future, it is the key to success. In order to become what we want to become, we need education. We need to educate our people so that they have a sense of good planning. Education is the basis of everything.
Yes, we lack education. We have good educational institutions in Africa but everything differs from country to country. In some countries, it is worse; in others it’s better. In Ghana, basic education is free. Secondary education is also free. This was introduced about four years ago. You can study from kindergarten, primary to secondary education for free. There is such access to education.
But this does not mean that we do not need investment in education. We still need investment in technical skills. We need to train and educate young people so that they can look to the future and constantly develop so as not to stand still.
On the other hand, many people have graduated from school but they do not have a job. And that’s the problem. Most African countries have high unemployment rates. We already have graduates from our universities in Africa who cannot find jobs. And some study abroad on scholarships or at their own expense. Therefore, if we invest in education, we also invest in our industries, we invest in agriculture and in other areas to also help create jobs and give jobs to those who are dedicated to their work. People cannot live on education alone. They also need a job to take care of their family.
Q: I talked with students from African countries and noticed that unfortunately, not many of them want to return to their homeland after studying in Russia.
A: Yes, they won’t lie if they say that because job opportunities in Africa are very low. But I myself studied in Russia at the First Medical Institute in St. Petersburg, and I want to say to those who study abroad: “friends, come back”.
Q: Our businessmen do not understand the African banking system. It’s difficult to work with this system. How difficult is it to transfer money from Russia to Africa?
A: Before the special operations, it was easier. SWIFT worked. I could simply write, and within three days, my bank in Africa would transfer US$100,000 to a Russian bank. But after the sanctions, this cannot be used. This creates difficulties but we businessmen have ways in which we do this. We were able to solve this problem. How? I can’t reveal it here. But we trade, we can receive money from Africa and we can send money through our channels.
Q: St. Petersburg University has developed a blockchain-based system that allows replacing SWIFT in the exchange of interbank information.
A: This will be very interesting and will contribute to the development of African and Russian trade. I’ve heard about them. We will be happy to collaborate on such topics because everything we do is related to the transfer of money. We sell goods, we need to receive money; we buy goods, we need to send money. I think such developments will be very useful to us.
Q: In ending our conversation, tell us about your company’s plans.
A: We currently have a private partnership for agricultural development in Ghana. We have already published articles in the Russian Journal of Agricultural and Social-Economic Sciences.
We need investors in rice farming and in manufacturing. We are also looking for investors in the field of fertiliser production. We already have such a proposal so to answer your question, we have already outlined a specific investment project in agriculture in which we are waiting for investors.