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How is Russia Straddling to Make Economic Impact in Africa

by Harry Choms
Economic Impact in Africa

While Russia’s interest in Sub-Saharan Africa is not new, Russian authorities have realized that it is time to return, primarily to reclaim its economic footprints and find old Soviet-era allies. However, this step comes with new challenges, particularly from other foreign players and changing internal political and economic conditions in Africa.

Many experts stated in several policy reports long before Russia held its first symbolic summit in October 2019 that “Russia has frequently failed to capitalize on the historical connection between Moscow and those African elites who had been educated in the Soviet Union and Russia.”

For the past few years, Russian authorities have only demonstrated steady and strategic steps toward the possibility of driving massive investments in lucrative sectors, frequently rattling in hyperbolic statements on ways to strengthen bilateral relations and expand economic cooperation in a number of African countries.

That theatrical display of corporate investment and business interests has been sealed into various agreements as a result of high-powered state delegations visiting both regions on a regular basis. According to records, 92 bilateral agreements were signed during the first summit; little has been accomplished, but Russians are looking forward to new agreements at the upcoming July meeting in St. Petersburg.

Keir Giles, an associate fellow of the Royal Institute of International Affairs (Chatham House) in London, explained to me in an email interview, precisely in April 2015, that “Russia’s approach to Africa is all about making up for a lost time. The Soviet Union’s intense involvement in African nations came to an abrupt halt in the early 1990s, and Moscow simply did not have the diplomatic and economic resources to pay attention to Africa while Russia was consumed with internal problems for a long time.”

“That changed in the last decade, thanks to two things: the arrival of President Vladimir Putin with a new foreign policy focus, and the massive influx of cash from higher oil prices, which transformed Russian state finances,” writes Giles. Russia is interested in both economic opportunities and rebuilding political relationships that have been on hold in some ways for over a decade.”

The Coordinating Committee on Economic Cooperation with Sub-Saharan Africa, popularly known as AfroCom, was established in June 2009 on the initiative of the Russian Federation Chamber of Commerce and Industry and Vnesheconombank to help promote and facilitate Russian business in Africa. It has received full support from the Russian government, the Federation Council and State Duma, the Ministry of Foreign Affairs, and the African diplomatic community since its inception.

At the Chamber of Commerce and Industry of the Russian Federation, Georgi Petrov, noted at AfroCom’s annual executive meeting held in April 2015 that “in view of the current geopolitical situation in the world and the economic situation in Russia, Russian businesses have to look for new markets. In this regard, the African continent is of particular interest, as it is currently one of the world’s fastest-growing regions, with annual GDP growth of 5%. Furthermore, South Africa’s accession to the BRICS bloc opens up new opportunities for African projects.” Petrov was referring to BRICS members Brazil, Russia, India, China, and South Africa.

According to reports, Russia has begun to strengthen its economic cooperation by opening trade missions tasked with providing sustainable business services and plans to facilitate import-export trade in a number of African countries. A simple calculation shows that the Coordinating Committee on Economic Cooperation with Sub-Saharan Africa has been in place for more than a decade. There are several Joint Commissions on Trade and Economic Cooperation, and Trade and Economic councillors are present at nearly all of Russia’s diplomatic missions in Africa.

However, these Russian trade centers must launch a “Doing Business in Africa” campaign to encourage Russian businesses to take advantage of growing trade and investment opportunities in Africa, as well as to promote trade fairs and business-to-business matchmaking in key spheres.

Maxim Matusevich, an associate professor and director of the Russian and East European Studies Program at Seton Hall University, told me in an interview that “in the past decades, there was some revival of economic ties between Africa and Russia – mostly limited to the arms trade and oil/gas exploration and extraction. Russia’s presence in Africa and within African markets remains marginal, and I believe Russia has frequently failed to capitalize on the historical link between Moscow and African elites educated in the Soviet Union.”

“It is possible that the ongoing crisis in the relations between Russia and the West will stimulate Russia’s leadership to look for new markets for new sources of agricultural produce. Many African countries have abundant natural resources and are uninterested in Russia’s gas and oil. During the Soviet era, Russia could only offer a few manufactured goods that could compete with Western-made goods. African nations will almost certainly continue to acquire Russian-made arms, but I see few opportunities for diversification of cooperation in the near future,” added Maxim Matusevich.

Foreign Minister Sergey Lavrov and Special Presidential Representative for the Middle East and Africa Mikhail Bogdanov have both visited Africa on business. On the other hand, they have met with several high-level African delegations over the years. According to several transcripts posted on the Foreign Ministry’s official website, the parties have discussed bilateral and regional issues, as well as the improvement of diverse cooperation between Russia and Africa, including cooperation with sub-regional organizations on the continent, over the past several years.

Without a doubt, Russia’s strategic return to Africa has sparked academic discussions at various levels, with academic researchers openly admitting that political consultations are underway, that arms exports have increased significantly, but that other export products are extremely low. Furthermore, Russia’s involvement in infrastructure development and industry on the continent has been virtually invisible for decades.

According to Themba Mhlongo, Head of Programmes at the Southern Africa Trust, Africa should not expect higher trade flows with Russia simply because Africa has not engaged Russia.

“Russia has not been as aggressive as China in pursuing opportunities in Africa because Russia has natural resources and markets in Eastern Europe and South West Asia,” Mhlongo explained. Russian exports to Africa may be dominated by machinery and military equipment, which is in their best interests.”

Despite the above shortcomings, he suggested that Africa should engage all BRICS members equally, including Brazil and Russia, in order to build alliances and open trade, finance, and investment opportunities. Furthermore, if African countries want to benefit from trade relations with Russia, they must not appear to favor Western Europe in their foreign policy. They must learn to be objective; objectivity is a practical strategy!

Mhlongo suspects that Africa still believes Russia is a communist state that is less technologically advanced or sophisticated than Western Europe. However, because Russia never colonized Africa, there are no colonial ties between the two.

“The majority of the time, African trade flows to Europe reflect colonial ties. Modern Russia, on the other hand, is a significant emerging market country and a member of the BRICS. However, Russian society is closed and oriented toward Western Europe, particularly the United States (probably due to the period of bipolar global power system that existed before). Russia exports to Africa but rarely establishes businesses there. “Language (or culture in general) could be one of the barriers to developing trade relations with Russia,” he stated during his discussion.

He proposed that both Africa and Russia initiate a dialogue to explore potential economic opportunities. However, there are other avenues for engagement, such as the BRICS bloc or bilateral diplomatic channels. Russia maintains embassies in Africa, and African nations maintain diplomatic representation in Russia. Africa may need to pay particular attention to cultural issues, try to understand Russia in this ever-changing environment, and find a way to engage Russia.

Alexandra Arkhangelskaya, a senior researcher at the Russian Academy of Sciences’ Institute of African Studies and a staff lecturer at the Moscow High School of Economics, told me in an interview that Russia and Africa needed each other: “Russia is a vast market not only for African minerals but for various other goods and products produced by African countries.”

The signs for Russian-African relations are encouraging – declarations of intentions have been made, and important bilateral agreements have been signed – but it remains to be seen how these intentions and agreements will be put into action, she noted in her discussions.

Russia-Africa relations should be strengthened in all areas, including politics, economics, trade, science, technology, and culture. Obstacles to expanding Russian-African relations must be addressed. These include, according to Arkhangelskaya, a lack of knowledge in Russia about the situation in Africa and vice versa.

“As we witness the rapid deterioration of relations between Russia and the West, Russia’s decision to ban the import of some agricultural products from countries that have imposed sanctions against Moscow provides significant opportunities for the expansion of trade in such products from Africa,” the professor noted in her discussion.

Experts at the Russian Academy of Sciences’ Institute for African Studies who have studied Russia’s foreign policy in Africa have reiterated that Russia’s exports to Africa will be possible only after the country’s industrial base undergoes a more qualitative change and introduces tariff preferences for trade with African partners. During the Soviet era, it was a reputable institute that contributed significantly to the development of African studies in the Russian Federation.

“The situation in Russian-African foreign trade will improve if Russian industry undergoes technological modernization, the state provides systematic and meaningful support to Russian businessmen, and small and medium businesses have greater access to foreign economic cooperation with Africa,” say Professor Aleksei Vasiliev of the RAS Institute for African Studies and a full member of the Russian Academy of Sciences, and Evgeny Korendyasov, an exper

In one of his speeches posted to the official website, Russian Foreign Minister Sergey Lavrov noted frankly in remarks: “it is evident that the significant potential of our economic cooperation is far from being exhausted, and much remains to be done so that Russian and African partners know more about each other’s capacities and needs. Developing a mechanism to provide public support for business interactions between Russian companies and the African continent remains a priority.”

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