A remarkable and instructive story has been published by the well-known analyst Eldar Shamsutdinov on his Telegram channel.
He anonymously shared a long-ago attempt by Kazakhstani businessmen to establish a business in Africa. While he didn’t disclose names, the facts are impressive:
«I remembered a story about coffee: when I was involved in structuring large deals, respected individuals approached. Their company wanted to take a loan to expand gold mining and production, taking place somewhere near Kampala, Uganda, in Africa.
Gold was extracted through a special scheme: mine X was guarded by Gang X, which was protected by Gang Y. Gang X operated at the mine and forced local residents to work there. When Gang Y’s thugs arrived, they exchanged gold for goods, food, and money. Our guys negotiated directly with gang X, sidelined gang Y, and things started rolling.
But our guys needed the money for other purposes! They struck a deal with a local village that had a small coffee plantation to buy coffee beans. However, there were difficulties:
The beans had to be purchased in a volume sufficient to fill an entire ship.
The beans were unlicensed, making it impossible to sell them in Europe.
Moreover, if the deal surfaced, the Ugandan village would face significant problems.
But money is money. At that time, a ship full of unlicensed coffee beans cost X dollars. Upon arrival at a small Lithuanian port, it was 3X, and if you could negotiate and obtain documents licensing the beans, you could charge 10X.
The bank pondered for a long time on how to provide the funds. The guys didn’t have many available assets for collateral, and proving the targeted use for expanding mining was challenging. In the end, they decided to freeze. The deal was shady and most likely irretrievable.
In the end, the guys found the money themselves and went to the village to finalize the deal, but… the village was no more, and neither was the plantation. All that remained was ashes. European grain suppliers were vigilant in guarding their market.»
