World
Russia, Africa to Boost Trade
By Kester Kenn Klomegah
Foreign Affairs Minister Sergey Lavrov has said that trade between Russia and Africa would grow further as more and more African partners continued to show interest in having Russians in the economic sectors in Africa.
“Our African partners are interested in Russian business working more actively there. This provides greater competition between the companies from Western countries, China, and Russia. With competition for developing mineral resources in Africa, it is easier and cheaper for our African colleagues to choose partners,” he told the staff and students at Moscow State Institute of International Affairs early September.
Soviet Union and Africa had very close and, in many respects, allied relations with most of the African countries during the decolonization of Africa. For obvious reasons, the Soviet Union ceased to exist in 1991. As a result, Russia has to struggle through many internal and external difficulties. The past few years, it is still struggling to survive both the United States and European sanctions.
“Of course, relations with many foreign countries have faded into the background compared with the challenges the country had to deal with in order to preserve its statehood. As we regained our statehood and control over the country, and the economy and the social sphere began to develop, Russian businesses began to look at promising projects abroad, and we began to return to Africa. This process has been ongoing for the past 15 years,” Lavrov further said about post-Soviet Russia’s relations with Africa.
“Overall, we are, of course, far from the absolute figures characterizing trade and investment cooperation between the African countries and, say, China. However, our trade grew by 17 percent over the past year (which is a sizable number) to over $20 billion and it continues to grow,” he informed the fully-packed auditorium.
Five years ago, precisely in May 2014, Lavrov said in a speech posted to the official website: “we attach special significance to deepening our trade and investment cooperation with the African States. Russia provides African countries with extensive preferences in trade. At the same time, 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.”
Reports, however, show that Russia has started strengthening its economic cooperation by opening trade missions with the responsibility of providing sustainable business services and plans to facilitate import-export trade in a number of African countries. Besides all that, Russia has embarked on “Doing Business in Africa” campaign to encourage Russian businesses to take advantage of growing trade and investment opportunities in Africa.
Statistics on Africa’s trade with foreign countries vary largely. For example, the total United States two-way trade in Africa has actually fallen off in recent years, to about $60 billion, far eclipsed by the European Union with over $200 billion, and also China more than US$200 billion, according to Africa in Focus post by the Brookings Institution.
According to the African Development Bank, Africa’s economy is growing faster than those of any other regions. Nearly half of Africa’s countries are now classified as middle income countries, the numbers of Africans living below the poverty line fell to 39 percent as compared to 51 percent in 2016, and around 350 million of Africa’s one billion people are now earning good incomes – rising consumerism – that makes trade profitable.
As far back in October 2007, Russian Foreign Affairs Ministry posted an official report on its website that traditional products from least developed countries (including Africa) would be exempted from import tariffs. The legislation stipulates that the traditional goods are eligible for preferential customs and tariffs treatment.
While Russia announced this preferential tariff regime for developing countries, which also granted duty-free access for African products, potential African exporters either failed to take advantage of it or were unaware of the advantageous terms for boosting trade.
Analyzing the present market landscape of Africa, Russia can export its technology and compete on equal terms with China, India and other prominent players. On the other hand, Russia lacks the competitive advantage in terms of finished industrial (manufactured) products that African consumers obtain from Asian countries such as China, India, Japan and South Korea.
Charles Robertson, Global Chief Economist at Renaissance Capital, thinks that the major problem is incentives. China has two major incentives to invest in Africa. First, China needs to buy resources, while Russia does not. Second, Chinese exports are suitable for Africa – whether it is textiles or iPads, goods made in China can be sold in Africa. Russia exports little except oil and has (roughly 2/3 of exports), steel and metals (which is either not cost effective to sell in Africa, or again is the same as Africa is selling) and military weapons.
Keir Giles, an Associate Fellow of the Royal Institute of International Affairs (Chatham House) in London, told me that “there are some more fundamental problems which Russia would need to overcome to boost its trade turnover with the region. The majority of this vast amount of trade with China simply cannot be competed with by Russia. A large part of African exports to China by value is made up of oil, which Russia does not need to import. And a large part of China’s exports to Africa are consumer goods, which Russia doesn’t really produce.”
He explains further that trade in foodstuffs in both directions suffers similar challenges, which are unlikely to be affected by the current politically-motivated Russian ban on foods from the European Union, the United States and Australia. In effect, in sharp contrast to China, the make-up of Russian exports has not really developed since the end of the Soviet Union and still consists mostly of oil, gas, arms and raw materials. For as long as that continues, the scope for ongoing trading with most African nations is going to be severely limited.
Academic experts, who have researched Russia’s foreign policy in Africa, at the Russian Academy of Sciences’ Institute for African Studies, have reiterated that Russia’s exports to Africa can be possible only after the country’s industrial based experiences a more qualitative change and introducing tariff preferences for trade with African partners.
“The situation in Russian-African foreign trade will change for the better, if Russian industry undergoes rapid technological modernization, the state provides Russian businessmen systematic and meaningful support, and small and medium businesses receive wider access to foreign economic cooperation with Africa,” according to Professor Aleksey Vasiliyev, President of the Institute for African Studies and the first appointed Special Presidential Representative to Africa.
Quite recently, Dr. Gideon Shoo, Media Business Consultant based in Kilimanjaro Region in Tanzania, explained in an interview discussion with me that Russian companies need to prove their superiority in the business spheres and African governments have to make it easier for Russian companies to set up and operate in their countries.
“Russian financial institutions can offer credit support that will allow them to localize their production in Africa’s industrial zones, especially southern and eastern African regions that show some stability and have good investment and business incentives. In order to operate more effectively, Russians have to risk by investing, recognize the importance of cooperation on key investment issues and to work closely on the challenges and opportunities on the continent,” he added.
On the other hand, Dr. Shoo noted that Russia is, so far, a closed market to many African countries. It is difficult to access the Russian market. However, African countries have to look to new emerging markets for export products, make efforts to negotiate for access to these markets. This can be another aspect of the economic cooperation and great business opportunity for both regions.
Nearly all the experts have acknowledged here that import and export trade have been slow due to multiple reasons including inadequate knowledge of trade procedures, complicated certification procedures, expensive logistics, security and guarantee issues, rules and regulations as well as the existing market conditions.
By looking at and revising the rules and regulations, the situation about Russia’s presence in Africa and Africa’s presence in Russia could change. All that is necessary here is for Russia and Africa to make consistent efforts to look for new ways, practical efforts at removing existing obstacles that have impeded trade over the years.
For decades, Russia has been looking for effective ways to promote multifaceted ties and new strategies for cooperation in economic areas in Africa. Now, Kremlin will hold the first Russia-Africa Summit with high hopes of enhancing multifaceted ties, trying to reshape the existing relationships and significantly roll out ways to increase effectiveness of cooperation between Russia and Africa.
During the past decades, a number of foreign countries notably China, the United States, European Union, India, France, Turkey, Japan, and South Korea have held gatherings of this kind in that format. The idea to hold a Russia-Africa Summit was initiated by President Vladimir Putin at the BRICS (Brazil, Russia, India, China and South Africa) summit in Johannesburg in July 2018.
By Kestér Kenn Klomegâh
Never underestimate the power of the Economic Community of West Africa States (ECOWAS), also known as CEDEAO in French and Portuguese, created on 28th May 1975 as a regional political and economic union bringing together fifteen (15) countries of West Africa. Per the date of its establishment, this so-called regional bloc marks its 50th year in 2025, a significant historical celebration.
Considered one of the pillar regional blocs of the continent-wide African Economic Community (AEC), ECOWAS generally has its primary common goal of working consistently towards achieving, what is first referred to, as “collective self-sufficiency” for its member states by creating a single large trade bloc by building a full economic and trading union. Additionally, ECOWAS aims to raise the living standards of an estimated population of over 425 million people and to promote economic development based on the principles of interdependence, solidarity, and cooperation.
Until writing this article, ECOWAS has frequently been discussing and reviewing the Abidjan-Lagos Corridor Highway Development Project, one single regional infrastructure project these several years. It has shown its total commitment to looking for funding while billions have been siphoned by leaders into foreign banks. African leaders are quick negotiating and paying for foreign military weapons but are grossly unsuccessful in soliciting similar assistance from these external partners to invest in infrastructure development such as the Abidjan-Lagos Corridor Highway Development Project.
West African Highway Launched in 2017
The construction of this proposed grandiose West African highway has its chequered history. The proposed project was successfully launched in 2017, and since then it has had a series of high-powered meetings and conferences, technical studies have been conducted, and the construction to its feasibility and practical operationalization. The Abidjan-Lagos highway, the six-lane dual carriage highway, is estimated at $15.1 billion.
On resource mobilization, it was explicitly noted that ECOWAS had adopted a new regulatory framework on the Public Private Partnership (PPP) – an incentive for the entry of the private sector in large investments like the nature of this project. The African Development Bank (AfDB) on behalf of the development partners offered its assurance for unwavering commitment to the realization of the highway.
Akinwunmi Adesina, President of the African Development Bank (AfDB) has several times highlighted the importance of the Abidjan-Lagos highway as an infrastructure project in West Africa that would ease the free movement of people, goods and services, generate social and economic activities, and ultimately promote cross-border trade within the region, its economic viability and enormous potentials especially now that African Union looks to implement the African Continental Free Trade Area (AfCFTA). Noticeably, Africa has long been considered a frontier for manufacturing, technology, for food production. Africa is getting ready for business, it is busily building the world’s largest single market of 1.4 billion people.
Special Meetings and Technical Consultations
Several meetings upon meetings and meetings have been held since the project was proposed in 2017. Since 2017, paid meetings have been held, and experts have been paid. The latest of such a paid meeting was held on November 10-11, 2024. This roundtable was initiated following the instructions given to the ECOWAS Commission. Late September 2024, such a roundtable meeting was held in Abidjan, the capital city of Côte d’Ivoire, under the auspices of the Commission of the Economic Community of West African States (ECOWAS), the African Development Bank (AfDB) and the ECOWAS Bank for Investment and Development (EBID).
The highway corridor is calculated to be approximately 1,080 km long. It will connect some of the largest and most economically dynamic cities Abidjan, Accra, Cotonou, Lomé and Lagos while covering a large proportion of West Africa’s population. It will also link very vibrant seaports in West Africa. In addition, it will serve all the landlocked ECOWAS member-states, for example, Burkina Faso, Mali and Niger in the region. Nearly 40 million people are estimated to be living along the Abidjan-Lagos corridor while 47 million people travel along the axis every year. These are expected to be direct beneficiaries of the development of the project touted to be a real backbone of trade in the region.
According to official documents, this highway project falls in line with the key objectives of the ECOWAS Vision 2050, including (i) facilitating the movement of people and goods, and (ii) accelerating trade and transport, regional and international, improving road infrastructure. It is eventually expected that the transport corridor will be transformed into a development corridor to stimulate investment, sustainable development and poverty reduction within the entire region.
West African Highway and AfCFTA
The focal point of controversy and debate, these several years, are centred on the mechanism of financing, and the state-of-the-art management of this new mega-highway – from planning through practical construction to its final commissioning, ready for cutting-edge usage by the transport industry. The idea of prioritizing highway innovation, signalling a bold leap in West Africa’s transportation infrastructure, is its recognizable potential transformative impact. Simply intended to improve and facilitate the movement of services, goods and people across the region. The Abidjan-Lagos Highway highlights its potential to enhance regional connectivity and drive economic growth, especially with the establishment of the African Continental Free Trade (AfCFTA), the ambitious flagship of the African Union (AU).
According to ECOWAS’ latest document issued after their two-day special meeting held on November 11 in Abidjan, Côte d’Ivoire, “experts have lauded findings of the study which has among others, unveiled a potential $6.8 billion investment prepared and ready to be implemented to unlock economic growth and enhance the viability of the proposed highway.” The overall objective is to identify and unlock the inherent and latent economic potential (short, medium and long-term) and commercial viability of economic and industrial value chain projects. These economic projects, once implemented, will also generate trade volumes and traffic to augment the viability of the highway.
The final draft reports were issued after groups revisited (that was not the first time) several tolled bridges and roads in Abidjan for knowledge and experience sharing strategy envisaged for the Abidjan-Lagos Highway. At the end of the exercise, the study report (re)validated commitment to unlock the inherent and latent economic potential of the highway construction and estimated $6.8 billion in potential investment in the region.
Final Construction Still Out of Sight
For the past few years, significant attention has been drawn by the widely publicized announcement of securing enough funds from African banks and external sources for the construction of this regional highway which could become a cornerstone, and the public narrative of achievement by ECOWAS, which marks its 50th year in 2025. However, transport industry analysts, researchers and experts have already cast serious doubts and skyline scepticism if ECOWAS could live up to this onerous task. Grandiose ceremony-infested ECOWAS future task of achieving its primary target of constructing a ‘speed-highway’ remains an eternal dream. Noticeably, ECOWAS has little to celebrate, except its existence by name, (the golden jubilee) at its 50th year in May 2025. At least, Africans will rather jubilate over the authenticity of reforming and transforming the Economic Community of West African States (ECOWAS).
By Adedapo Adesanya
After many delays and negotiations, richer countries agreed to take the lead on raising at least $300 billion per year by 2035 to support climate adaptation and emissions reduction projects in developing nations.
This came after two exhausting weeks of chaotic bargaining and sleepless nights at the Conference of Parties (COP29) held in Baku, Azerbaijan.
Other donors — including less wealthy countries, development banks, and private investors — were also invited to chip in. The agreement also called on all these parties to work, on a voluntary basis, toward the goal of $1.3 trillion.
The figures are far lower than what many in Baku had hoped for with delegates from countries like India, Kenya, and Vanuatu among others lamenting the agreed amount. Expectations were around $2.3 trillion.
“The amount that is proposed to be mobilised is abysmally poor. It’s a paltry sum,” said Indian delegate Chandni Raina.
“This document is little more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face.”
“The commitments made in Baku — the Dollar amounts pledged and the emissions reductions promised — are not enough. They were never going to be enough,” said Ralph Regenvanu, climate envoy from the island nation Vanuatu. “And even then, based on our experience with such pledges in the past, we know they will not be fulfilled.”
“This COP has been a disaster for the developing world,” said Mohamed Adow, the Kenyan director of Power Shift Africa, a think tank.
“It’s a betrayal of both people and planet, by wealthy countries who claim to take climate change seriously.”
Nations struggled to reconcile long-standing divisions over how much rich nations most accountable for historic climate change should provide to poorer countries least responsible but most impacted by Earth’s rapid warming.
The climate envoy of the European Union, Wopke Hoekstra said COP29 would be remembered as “the start of a new era for climate finance”.
Despite repeating that no deal is better than a bad deal, this did not stand in the way of an agreement, despite it falling well short of what most of these delegates wanted.
The final deal commits developed nations to pay at least $300 billion a year by 2035 to help developed countries green their economies and prepare for worse disasters.
A group of 134 developing countries had pushed for at least $500 billion from rich governments to build resilience against climate change and cut emissions of planet-warming greenhouse gases.
UN climate chief, Mr Simon Stiell acknowledged the deal was imperfect.
“No country got everything they wanted, and we leave Baku with a mountain of work still to do. So this is no time for victory laps,” he said in a statement.
The United States and EU have wanted newly wealthy emerging economies like China — the world’s largest emitter — to chip in.
The final deal encourages developing countries to make contributions on a voluntary basis, reflecting no change for China which already provides climate finance on its own terms.
The deal posits a larger overall target of $1.3 trillion per year to cope with rising temperatures and disasters, but most would come from private sources.
Wealthy countries and small island nations were also concerned by efforts led by Saudi Arabia to water down calls from last year’s summit in Dubai to phase out fossil fuels.
A number of countries also accused Azerbaijan, an authoritarian oil and gas exporter, of lacking the experience and will to meet the moment, as the planet again sets temperature records and faces rising deadly disasters.
The next COP will hold in Brazil in 2025.
By Adedapo Adesanya
Stablecoin-based infrastructure provider, Yellow Card, has been issued a Crypto Asset Service Provider (CASP) licence by the Financial Sector Conduct Authority (FSCA) in South Africa.
This is coming after the company announced the closing of its Series C financing valued at $33 million led by Blockchain Capital, with participation from Polychain Capital, Third Prime Ventures, Castle Island Ventures, Block, Inc., Galaxy Ventures, Blockchain Coinvestors, Hutt Capital, and Winklevoss Capital in October.
Yellow Card, which launched in South Africa in 2020, has facilitated over $3 billion in transactions in the last several years and now operates in 20 countries across the continent.
Commenting on the FSCA’s decision to issue the licence to Yellow Card Financial South Africa, Mr Chris Maurice, Yellow Card’s co-founder and CEO, said, “The CASP licence underscores Yellow Card’s commitment to its customers in South Africa and regulatory compliance across the continent. This achievement reflects our dedication to providing secure, compliant and transformative solutions for our customers both in South Africa and across Africa.”
With the licensing and funding, the company plans to expand its B2B offerings by enhancing its stablecoin rails, upgrading infrastructure, and advancing its B2B API and Widget.
This will further help to drive stablecoin adoption, which is surging throughout Africa, with sub-Saharan Africa having the highest adoption rate in the world at 9.2 per cent.
In South Africa alone, where the number of total users of crypto assets is estimated to amount to 5.8 million people, stablecoins have experienced growth of 50 per cent month over month since October 2023, displacing bitcoin as the country’s most popular cryptocurrency. Stablecoins are cryptocurrencies pegged against the Dollar.
“As the stablecoin landscape continues to evolve, Yellow Card is committed to leading the charge in making digital assets accessible and secure for businesses across Africa,” Yellow Card said in a statement.
“These efforts will empower businesses with seamless solutions for liquidity management and their general operations,” the firm added.
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