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The Sochi Summit and the Pride of Africa

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Business Opportunities Russia Africa

By Kester Kenn Klomegah

After nearly three decades of extremely low political, economic and cultural engagement, Russia is indeed returning to Africa. For obvious reasons, Russia’s relations with Africa turned extremely worse as some diplomatic representations were unexpectedly cut, all cultural centers closed, and many projects were suspended. 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.

Understandably, Russia has had to struggle with its post-Soviet internal and external problems especially during the first decade, from 1991 till 2000, which has been described by policy experts as the “Lost Decade on Africa”.

Still the second decade, 2000 to 2010, saw the reawakening with decades among the Kremlin, Government officials and academic researchers debated consistently whether “Russia needs Africa or Africa needs Russia” while African leaders were already turned towards Asian and the Gulf regions especially China and often asked why wake up the “Sleeping Giant Bear”. China became the best development suitor in Africa.

During this period, Russia seems to have attained relative political and economic stability. “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,” noted Foreign Minister Sergey Lavrov early September when he addressed students and staff of Moscow State Institute for International Relations.

This process has been ongoing for the past 15 years. The return is now taking the form of resuming a very close political dialogue, which has always been at a strategic and friendly level, and now moving to a vigorous economic cooperation.

To reflect and consolidate these trends and in order to draw up plans for expanding consolidated partnerships with the African countries, President Putin initiated the Russia-Africa Summit last year during the BRICS summit in Johannesburg. The initiative was strongly supported. This October, it will be implemented under the co-chairmanship of the heads of Russia and Egypt, since this year Egypt is heading the African Union.

Further, from my research and monitoring, it is interesting to recall here that during the BRICS summit in Durban, on March 26-27, 2013, BRICS countries (Brazil, Russia, India, China and South Africa) discussed, among other topics, “BRICS and Africa: Partnership for Development, Integration and Industrialization.”

The BRICS membership gives an additional competitive advantage. Firstly, none of the members of this association is tainted with a colonial past on the African continent, and second, the BRICS member countries as a matter of principle do not interfere in the internal affairs of African countries. None of the BRICS member countries spread democracy in Africa by force or impose their values with the help of expeditionary corps and air strikes.

The U.S. and the European Union (EU) monopoly in African countries is steadily coming to an end, as new players have come to the African continent, namely the BRICS countries. Russia is now the new force. Russia’s renewed interest in Africa is due to a desire to restore its previous influence and to build allies as it experiences growing criticism by Western countries.

During my long years of research has shown me that Africa is a huge continent that still requires economic development. Its active demographic growth and abundance of natural resources are creating conditions for the emergence of probably the world’s biggest market in the next few decades.

Today, Africa moves towards raising its social, economic, scientific and technological development, and is playing a significant role in international affairs. African states are strengthening mutually beneficial integration processes within the African Union (AU) and other regional and sub regional organizations across the continent.

Furthermore, African leaders keep in mind other key questions such as rising unemployment, healthcare problems and poor infrastructure development. That is, they now focus on measures toward realizing the Sustainable Development Goals (SDGs).

So, in the contemporary period, Russia and Africa have to, both at a bilateral level and in various multilateral formats, take significant new steps forward in new joint projects in extractive industries, agriculture, healthcare, and education. Besides, there are aspects of the diplomacy that really need focus, for example cultural and social spheres as well as the use of soft power. Indeed, the forthcoming Russia-Africa summit in Sochi on October 23-24 should lay the necessary foundation for improving all these for a stronger partnership.

Quite recently, Foreign Affairs Minister Lavrov assertively acknowledged “Africa is one of our priorities. Our political ties in particular are developing dynamically. But economic cooperation is not as far advanced as our political ties. We believe that we should promote joint activity in order to make broader use of the huge potential of Russian-African trade and investment cooperation.”

Political dialogue: Russia has intensified promoting political dialogue, including the exchange of visits at the top levels. Interaction between foreign ministries is expanding. Last year, 12 African foreign ministers visited Russia. According to my calculation, Sergey Lavrov and his deputy Minister, Mikhail Bogdanov, have held talks with nearly 100 African politicians including ministers, deputies between January and September 2019. Bogdanov has interacted with all African ambassadors in Moscow.

Lavrov conducted bilateral dialogue with African countries at the UN in New York, between September 24 and 30, 2019. Lavrov held talks with Foreign Minister of Algeria Sabri Boukadoum, Foreign Minister of Morocco Nasser Bourita and Prime Minister of Sudan Abdallah Hamdouk among others.

During their conversation on the sidelines of the 74th Session of the UN General Assembly, all the sides discussed matters concerning the further expansion of multifaceted partnership, foreign policy collaboration in regional and international affairs.

With other questions such as the practice of democracy, Russia does support whatever regime is in power. While this makes its policy predictable, it does not encourage good governance and democratic practices in those countries that are severely challenged in these areas. Many other countries follow this practice and even countries like the United States, which often do speak out forcefully on behalf of good governance, are not always consistent.

Economic and investment cooperation: Africa truly is a continent of new opportunities and there is huge potential here for developing economic ties. Many see Africa’s growth primarily not because of aid, it is because of businesses and entrepreneurship, consistent efforts at creating wealth and employment. Africa in the 21st century does not need charity but wants to be an economic partner. African countries are not lacking the resources to boost the relationship, but the will power has always been put on hold or totally ignored.

Russia has shown strength in Africa in niche sectors such as nuclear power development, launching African satellites, and constructing energy and mining projects. It has been seeking to exploit conventional gas and oil fields in Africa; part of its long-term energy strategy is to use Russian companies to create new streams of energy supply. With regard to other economic areas, it may have to identify more sectors like this rather than compete head-to-head in a wide range of sectors with European Union countries, China, the United States, India, and others.

But U.S. President Donald Trump’s administration said recently that “Russia has bolstered its influence with increased military cooperation including donations of arms, with which it has gained access to markets and mineral extraction rights. With minimal investment, Russia leverages private military contracts, such as the Wagner Group, and in return receives political and economic influence beneficial to them.”

While Russians are aware of the equal competitive conditions in the continent, Africans on the other hand view Russia as another fairly large trading partner and, probably a stabilizing and balancing factor to other foreign players. In terms of stringency of strategic outlook and activeness on economic engagement, the country is seriously lagging behind China, U.S., EU, the Gulf States, India and Brazil.

Trade: Russian aid, trade, and investment in Africa, especially Sub-Saharan Africa, are modest. Russian exports to Africa have been growing modestly and reached $18.5 billion in 2017. Russian imports from Africa have been flat and totaled only $2.1 billion in 2017. This was well below Turkey’s trade with Africa in 2017.

Russian trade is heavily concentrated in North Africa, especially with Egypt. Noticeably, Russia’s relationship with North Africa is more significant. Nevertheless, Russia apparently wants to maximize the business relationship rather than the aid relationship. The problem is that Africa has little that Russia wants to buy.

It is, however, necessary to raise trade and economic ties to a high level of political cooperation. Russia and Africa have to show not only an exceptional commitment to long-term cooperation but also readiness for large-scale investments in the African markets taking into account possible risks and high competition.

Equally important are African businesspeople who are looking to work on the Russian market. Definitely, time is needed to solve all these issues including identifying and removing obstacles to mutual bilateral trade and investment.

Weapons and arms diplomacy: After the collapse of the Soviet era, Africa owed US$20 billion, later written off. This debt was due to weapon and arms delivery to Soviet allies including Ethiopia, Angola, Zimbabwe, Mozambique and a few other African countries. Now, Russia is the largest seller of arms to Africa and is willing to sell to any country. This gives it a certain advantage as many Western countries prohibit arms sales to a few countries.

More recently, Russia has made significant arms deals with Angola and Algeria. Egypt, Tanzania, Somalia, Mali, Sudan and Libya have also bought arms from Russia. The Russians also provide military training and support.

In Africa, Russia seeks to guarantee security. In the classical sense, security guarantees imply something different. Russia has very warm, historically developed relations since their decolonization. This forms the theme for the Sochi summit: “For Peace, Security, and Development” which organizers explained would serve as the foundation of the final joint declaration.

Soft power interplay: Experts and members of the Valdai Discussion Club noted that soft power has never been a strong side of Russian policy in the post-Soviet era. Federation Council and State Duma, both houses of legislators, enacted a law that banned foreign NGOs from operating in the Russian Federation. As a result, African NGOs that could promote people-to-people diplomacy and support cultural initiatives as well to push for good image, is non-existent.

On education and culture. Simply cultural cooperation could be described as catastrophic. With education, Russia now offers a few state scholarships. Official figures from the Ministry of Foreign Affairs pegged it at 15,000 students, only one-third of this receives Russian grants. The remaining two-thirds are fee-paying clients. The Ministry of Higher Education told me last month during interview discussions that there are nearly 21,000 African students while some in the far regions are still undocumented. This also means that African elite and the middle class pay approximately US$75 million annually to Russian educational institutions. Average tuition is US$5,000 per year.

Over the years, one of the key challenges and problems facing Russian companies and investors has been insufficient knowledge of the economic potential, on the part of Russian entrepreneurs, the needs and business opportunities of the African region. Africa needs broader coverage in Russian media. Leading Russian media agencies should release more topical news items and quality analytical articles about the continent in order to adequately collaborate with African partners and attract Russian business to Africa. The media can, and indeed must be a decisive factor in building effective ties.

After several years of consistently constructive criticisms, Russian authorities have ignored media cooperation. Russia could use its media resources available to support its foreign policy, promote its positive image, disseminate useful information about its current achievements and emerging economic opportunities especially for the African public.

Russian media resources here, which are largely not prominent in Africa, include Rossiya Sevogdnya (RIA Novosti, Voice of Russia, Sputnik News and Russia Today), Itar-Tass News Agency and Interfax Information Service. Besides, the Ministry of Foreign Affairs could use its accreditation opportunities to allow African media to work in Russia. While the Foreign Ministry has accredited foreign media from Latin America, the United States, Europe and Asian countries, none came from sub-Saharan Africa. Instead of prioritizing media cooperation with Africa, high-ranking Russian officials most often talk about the spread of anti-Russian propaganda by western and European media in Africa.

Professor Vladimir Shubin, Deputy Director of the Institute for African Studies under the Russian Academy of Sciences, reiterated: “Russia is not doing enough to communicate to the broad public, particularly in Africa, true information about its domestic and foreign policies as well as the accomplishments about Russian culture, the economy, science and technology in order to form a positive perception of Russia abroad and a friendly attitude towards it as stated by the new Concept of the Foreign Policy.”

Russia-Africa Summit: Russia holds its first summit in October. Through this, Russia and Africa aim jointly at advancing relations to a fundamentally new level and a wider dimension. Of course, Africa is not fully satisfied with Russia due to its “diplomatic niceties” and largely unfulfilled pledges and promises. Russia already has a plethora of post-Soviet bilateral agreements that it is now implementing, with some degree of limitations, in various African countries. It’s clear that Russia might not make any public financial commitment as many foreign countries have done over the years. But Russia needs to demonstrate that it has a plan to engage Africa in a significantly greater way than it has in recent years.

According to my investigations, Russia would sign 23 new bilateral agreements with a number of African countries and issue a joint declaration that would lay down a comprehensive strategic roadmap for future Russia-African relations.

Prime Minister Dmitry Medvedev, while addressing the Russia-Africa Economic forum in July also added his voice for strengthening cooperation in all fronts. “We must take advantage of all things without fail. It is also important that we implement as many projects as possible, that encompass new venues and, of course, new countries,” he said.

Medvedev stressed: “It is important to have a sincere desire. Russia and African countries now have this sincere desire. We simply need to know each other better and be more open to one another. I am sure all of us will succeed if we work this way. Even if some things seem impossible, this situation persists only until it has been accomplished. It was Nelson Mandela who made this absolutely true statement.”

In July, President Vladimir Putin took part on third day of the International Parliamentarian Forum that also brought African legislators, emphasized that “the modern world needs an open and free exchange of views, confidence building and search for mutual understanding”.

Indeed, judging from the above discussions about the changing geopolitical relations, after the first Russia-Africa Summit, there has to be a well-functioning system and mutual willingness in the spirit of reciprocity to achieve a more practical and comprehensive results from the new relations between Russia and Africa.

Kester Kenn Klomegah is an independent researcher and policy consultant on African affairs and Brics. He is the author of the Geopolitical Handbook titled “Putin’s African Dream and The New Dawn: Challenges and Emerging Opportunities” devoted to the first Russia-Africa Summit 2019.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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The Future of Payments: Key Trends to Watch in 2025

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Luke Kyohere

By Luke Kyohere

The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:

1. The rise of real-time payments

Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this. 

2. Cashless payments will increase

In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions. 

3. Digital currency will hit mainstream

In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain. 

The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability. 

4. Increased government oversight

As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.

5. Business leaders buy into AI technology

In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk. 

6. Continued AI Adoption in Payments

In payments, the proliferation of AI will continue to improve user experience and increase security.  To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent. 

When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.

7. Rise of Super Apps

To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills. 

8. Business strategy shift

Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble. 

As the payments space evolves,  businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.

Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq

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Ghana’s Democratic Triumph: A Call to Action for Nigeria’s 2027 Elections

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ghana election 2024

In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.

In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.

“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”

The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.

Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.

The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”

The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.

As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.

In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.

“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.

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The Need to Promote Equality, Equity and Fairness in Nigeria’s Proposed Tax Reforms

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By Kenechukwu Aguolu

The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.

One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.

A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.

In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.

The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.

The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.

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