World
African Great Game: Russia Playing the Catchup
By Kester Kenn Klomegah
After Soviet collapse, Russia has maintained strong and time-tested relations with African countries, and of course, the Soviet Union had played an important role during the decolonisation of Africa. The African continent comprises a diverse collection of countries, each with its own set of development setbacks and challenges. The political culture and investment climate are, in fact, diverse but are important forces in the economy.
According to several development reports, Africa is one of the fastest growing regions in the world: the average annual GDP growth rate reaches from 3.5% to 5% on the continent. The reports have strongly encouraged African leaders to prioritise sustainable development as a step towards raising the living standards of millions of impoverished population and further guide against the revival of neo-colonialism, the destructive attitude towards the resouces in Africa.
In this wide-ranging exclusive interview, George Nyongesa, Senior Associate at Africa Policy Institute (Nairobi, Kenya) discusses, with Kester Kenn Klomegah, attitudes and perceptions toward Russia, economic cooperation between the two regions as well as Russia’s role in sustainable development in Africa and expectations from the forthcoming summit in Sochi, Russia.
African leaders and business people will be in Sochi for the first Summit. What are the perceptions and attitudes toward this new dawn in the relations? How do the political and business elites interpret the benefits of the new relationship for both Africa and in Russia?
The impending Russia-Africa Summit is a timely and opportune congregation given current global events involving Africa’s traditional partners – the US’ recent years’ protectionist policy, China’s trade wars with the US, Brexit from the European Union – all of which directly impact Africa’s economic reality. For African leaders and business people, the utility and strategic importance of the Russia-Africa Summit is tied to how aptly it addresses this immediate reality and outlines future prospects.
To-date the US, European Union, China, India and Japan have partnered with African leaders to pursue development goals for mutual benefit. Accordingly, these partners have long articulated their engagement plans for Africa through comprehensive frameworks such as the US-Africa Leaders’ Summit and Power Africa Initiative, the European Union-Africa Summit, the Forum for China Africa Cooperation, the India-Africa Summit and Tokyo International Conference for African Development. The first Russia-Africa Summit therefore signals the dawn of deeper and stronger relations between Russia and Africa as Russia takes on a more active presence.
At Sochi, African leaders and business community will be looking to understand the proposed Russian framework for political and economic cooperation going forward, particularly long-term cooperation that takes into account Africa’s risk profile and the current competitive landscape for those seeking to invest. The business community will be keen to identify in-roads and opportunities for African businesses to grow and thrive in Russia vis-a-vis Africa’s development priorities on Agenda 2063, SADC’s industrialisation strategy and AfCFTA platform.
During the parliamentary conference held in July, the Chairman of the State Duma stressed that “it is necessary to prevent the revival of neo-colonialism, the destructive attitude towards the African resources.” How would you explain neo-colonialism by foreign players in Africa? What countries are the neo-colonizers in your view?
Neo-colonialism could be viewed as the renewed interest and methods employed from western and eastern countries in relation to exploitation and management of Africa’s rich resources – both from an economic and political paradigm. Traditionally, Western aid for African development has been laced with conditionalities tagged to defending human rights and promoting good governance via anti-corruption campaigns. This approach has seen compliant countries favored and non-compliant ones sanctioned by such Western nations. The interference with independent states has widely been castigated as neo-colonialism in many quarters. The alternative development model offered under the Belt and Road Initiative has facilitated the rise of China to displace the West as Africa’s largest development partner.
With the entire African continent (save for one country) signed up to BRI, Western countries’ worries about China expansionism has escalated. In this regard, BRI has been hit with accusations of debt trap diplomacy as far as its roll out in Africa. This is because the projects are run by Chinese businesses and where African nations struggle to repay the debt, then China is primed to step in and run the projects. The warning is that these seemingly friendlier loan terms could foster unsustainable debt and economic drain on African economies.
Outside of the economic dynamic, China has been accused of supporting authoritarian governments by its loan terms, and that in default situations, China’s remedies result in significant geopolitical expansion for China. To counter the growing Chinese influence, the United States has itself set up an African focused development agency that facilitates American businesses to flourish in developing Africa. These hegemonic tussles make for the neo-colonial danger that sees these development partners prosper to the exclusion of Africa itself.
In fact, Africa needs investment in infrastructure, agriculture and industry, to create employment for the young graduates. What role can Russia play here, we are referring to Sustainable Development Goals?
Africa’s regional development priorities are largely articulated by the African Union’s Agenda 2063, the SADC’s Industrialisation Strategy and Roadmap, 2015-2063 and the implementation of the recently adopted African Continental Free Trade Area (AfCFTA). Briefly, these priorities include industrialisation for economic and technological transformation; competitiveness; and regional integration. Africa is keen to shift away from industrialisation powered by increased labour and capital investment, to one powered by efficient resource deployment in production processes. AfCFTA particularly presents a significant consolidated voice for African states to negotiate economic and trade opportunities in e-commerce, technology transfers, manufacturing growth, scholarship and training; and infrastructure financing. Additionally, each of Africa’s 54 states have nationally articulated development priorities. These development goals have been designed as steps in pursuit of the attainment of the Millenium Development Goals.
Towards achieving these goals China has offered as much as US$60 billion, Japan US$32 billion, and India US$25 billion, while large investment funds have also come from the United States and the European Union. Similarly, Russia could design a funding vehicle focused on supporting Africa’s development priorities, particularly industrialisation and trade facilitation, for mutual benefit. Russia could further share knowledge on its own steps towards the MDGs and train professionals with the relevant skills for development projects. Such training could either be by the rollout of inter-university student exchange programs or the collaboration amongst academia to teach relevant skills in local curriculum in vocational institutions.
With trade specifically, there are surging competition, rivalry and trade wars in Africa, and recently the adoption of African continental free trade. What is your interpretation of all these and how profitable could it be for corporate Russian exporters?
Russia has progressively engaged Africa on bilateral basis at country level, as well as through regional blocs such as AU and SADC, at continental level. The adoption of the largest trade agreement since the WTO, the AfCFTA, signals the exponential potential of Africa as a trading bloc, going forward. The intention of AfCFTA is to provide a significant consolidated voice for African states to negotiate economic and trade opportunities in e-commerce, technology transfers, manufacturing growth, scholarship and training; and infrastructure financing. It is anticipated that there will be an additional 1.3 billion people in Africa by 2050. This is a massive market for Russian corporates to explore if they can leverage mutually beneficial engagement at the AfCFTA level.
In your expert view, what are the key challenges and problems facing Russian companies and investors that wanted business operations in Africa?
Africa’s active business development partners have been the United States, European Union, China, India and Japan, but less so Russia. As such, there’s limited shared knowledge on the value proposition of development and business collaboration between the two. Additionally, the absence of an articulated collaboration framework has meant that African and Russian policy makers are yet to design appropriate collaboration channels and tools that would facilitate mutually beneficial investment and ease of doing business. Related gaps include the prevailing language and cultural barrier that is, as yet, to be actively addressed. These, coupled with other prevailing hurdles to doing business in Africa such as limited infrastructure, high local unemployment rates, semi-skilled workers and protection of local industries, have hindered the set up of local business operations by Russian companies and investors.
On the other hand, why the presence of African companies on the Russian market is extremely low? Why Russia is not attractive to African exporters? Under the circumstances, what should be done to improve the current situation, a two-way trade?
The African perception of Russia and vice versa has largely been painted by other Western powers that are active on the African continent. That public persona is not one that has been enticing for African exporters. As such, Africa’s knowledge of the opportunities in trading with Russia is significantly limited. Opportunities for driving up trade relations between Russia and Africa include the facilitation of trade expos that create a platform for investors and businesses from both parties to interact and understand the opportunities and challenges to their export and import businesses. In addition, continued interaction between Russia and Africa, such as through exchange programs for students, or business cultural trips, will facilitate the chipping away at the language and cultural barrier that in turn hinders easy trade. If both Russia and Africa are able to showcase the available market for each other’s products, then trade engagement is likely to increase.
Could we finally talk about media cooperation between Russia and Africa, social platforms and the use of soft power as important instruments for strengthening the relations? What are your suggestions to these aspects in the existing relations between the Russia and Africa?
As part of Russia’s desire to adopt a comprehensive strategic roadmap for a more integrated cooperation and to find effective ways of improving public diplomacy in Africa, the Russian government is supporting a pilot programme organised for African media groups for a two-year period from 2018 to 2020. The utility of this approach is to develop a cohort of champions that will facilitate a positive post-Soviet economic and cultural narrative, as well as demystify Russia for Africa’s political, business and general population. Through this, Russians and Africans will be able to leverage soft power to build trust from shared experience, shift towards normalisation of relations through increased familiarity, set the stage for increased reciprocity such as Russia granting accessibility for African correspondents to match Russia’s increased media presence in Africa. In a nutshell, there will be an avenue for demystification and contextualisation (getting to know the truth about each other through moderated content) and so help counter any negative public persona, share cultural experiences and begin to wear down language barriers.
Interview made by Kester Kenn Klomegah in Nairobi, Kenya.
By Modupe Gbadeyanka
A funding support of up to €15 million has been provided by Swedfund for small and medium-sized enterprises (SMEs) across Africa.
The money would be managed and disbursed by a private equity initiative, AfricInvest Small Cap Fund.
AfricInvest integrates environmental, social and governance (ESG) principles with a focus on gender equality and sustainability.
The fund aims to invest at least 30 percent of its portfolio in companies that are women-led or have significant female ownership.
Moreover, climate-related objectives will be embedded in the investment process.
Swedfund’s support will help ensure that African SMEs have the resources and guidance they need to grow responsibly and effectively.
With decades of experience and a strong presence across the continent, the fund aims to invest in a range of sectors including agribusiness, healthcare, education, consumer goods, manufacturing and services, and is therefore well positioned to contribute to economic growth and social development.
The choice of SMEs is because they are a cornerstone of economic development, driving job creation and innovation.
However, many companies face significant barriers to accessing capital. This indirect investment can enable more growth-oriented investments to unlock the full potential of SMEs in Africa.
Commenting on the funding support, the Investment Director for Sustainable Enterprises at Swedfund, Sofia Gedeon, said, “This investment will allow Swedfund to expand its support for underserved businesses across Africa.
“AfricInvest aligns its investments with measurable sustainability outcomes, allowing us to drive economic growth, create jobs and promote greater inclusion. At the same time we set new benchmarks for responsible investing.”
By Kestér Kenn Klomegâh
South Africa, for the first time, heads the G20, a multilateral organization, and it is taking pecuniary measures to balance the heightening complexities around the world. With President Donald Trump in the helm of power in the United States, the most different pragmatic approach in being adopted towards a number of issues ranging from politics through the global economy to social and humanitarian parameters. Geographical regions, including Africa, are also affected to a distinctive extent.
Below is an insightful interview conducted by Kestér Kenn Klomegâh with Mr Tariq Khan, a Senior Research Associate at the Institute for Global Dialogue (IGD) associated with the University of South Africa. Tariq focuses on economic, security and diplomatic issues in areas such as Pakistan-Africa Relations, Africn Relations, and Major Powers’ relations with Africa, Asia-Africa Relations and South-South Cooperation, Maritime Affairs. In this interview, Tariq Khan discussed Global Powers, G20 and Africa relations in the emerging new world. Here are the significant excerpts.
What are the practical implications of the United States, a major contributor among G20 members, skipping South Africa’s February summit?
The absence of the United States at the South Africa G20 summit poses diplomatic and strategic connotations of some importance. As a key global economic player, the U.S. influences major policy decisions within the G20, and its non-attendance could signal a de-prioritization of Africa within its foreign policy agenda.
First, it seems that there is no real commitment to the critical issues which the African continent is facing including debt relief, fair trade and development funding. South Africa, as the only African G20 member, has been a strong advocate for the continent’s economic priorities. If the Washington give unimportance or sideline this engagement, it risks reinforcing the perception that Washington is more focused on geopolitical tensions in Europe and Asia while offering only rhetorical support to Africa.
In adding up, such a move will give BRICS a boost, of which South Africa is a component and plays a prominent role. With BRICS growing and positioning itself as an alternative to Western-led institutions, the U.S. absence might encourage African nations to deepen their economic and political cooperation within BRICS which will lead to reduce reliance on Western-dominated frameworks.
Finally, absence of US could deteriorate or weaken the trustworthiness or credibility of the G20 as an inclusive global forum. South Africa has effectively championed the inclusion of the African Union (AU) as a permanent G20 member. If the U.S. disengages from the summit, it could slow momentum for integrating African priorities into global decision-making, reinforcing existing frustrations about Western dominance in multilateral institutions.
Can South Africa’s presidency change perceptions of the G20’s role in global politics and its contributions to Africa’s development?
South Africa’s G20 presidency presents a significant opportunity to reshape Africa’s role in global governance. Traditionally, the G20 has been dominated by the economic priorities of Western and Asian powers, often sidelining the challenges of the Global South. As the only African G20 member, South Africa can drive a more inclusive agenda through three key areas:
- Reinforcing Africa’s Economic Potential: South Africa can emphasize Africa’s role as a strategic investment destination rather than just an aid recipient, advocating for reforms in global financial institutions to support Africa’s economic growth.
- Advocating for Structural Reform: Building on its success in securing AU membership in the G20, South Africa can push for concrete actions such as debt restructuring, fair trade terms, and increased voting rights for Africa in institutions like the IMF and World Bank.
- Shaping Global South Solidarity: By aligning G20 priorities with those of BRICS and the broader Global South, South Africa can challenge the perception that the G20 merely upholds Western economic dominance and instead position it as a balanced institution where emerging economies wield real influence. On the other hand, South Africa must navigate its complex diplomatic positioning. At the same time as maintaining strong Western ties, its BRICS membership and increasing alignment with China and Russia could generate tensions. Achievement will depend on its capability to bridge these divides and promote an Africa-first agenda.
In the context of a rapidly changing global landscape, do we see G20 competing or collaborating with BRICS?
The relationship between G20 and BRICS is distinguished and characterized by both competition and selective collaboration. BRICS as an organization has turned out to be more and more self-confident to challenge Western domination in global governance, mainly following its expansion to Saudi Arabia, the UAE, Egypt, Iran, and Ethiopia and other states.
This reflects a broader shift toward a multipolar world where such organizations similar to the G20 face substitute governance frameworks. Though, collaboration between G20 and BRICS remains indispensable. Several BRICS members such as South Africa, China, India, and Brazil are also in the G20 which means they have an interest in shaping both platforms rather than abandoning one for the other.
Cooperation on issues such as debt relief, climate change and development financing is promising, but ideological and strategic differences may persist. If the G20 remains inflexible in its Western-centric approach, then BRICS could become a direct competitor, attracting more nations disappointed with Western-led economic policies.
The challenge of South Africa is to balance its engagement with both which ensures that interests of Africa are advanced across multiple platforms and could not be compromised its broader economic and diplomatic objectives.
What is the future of the G20, particularly in relation to Africa, given BRICS’ growing influence?
The G20’s significance to Africa will depend on whether it can transition from symbolic commitments to tangible actions. Traditionally, African engagement with the G20 has been marked by unfulfilled promises. To remain a meaningful partner for Africa, the G20 must focus on:
- Debt Relief and Fair Financing: Many African nations struggle with unsustainable debt burdens. The G20 must push for genuine restructuring mechanisms rather than perpetuating cycles of dependency.
- Infrastructure Investment: Africa’s development hinges on infrastructure, yet financing remains a challenge. The G20 should support merged financing models that combine public and private investment in sustainable projects.
- Technology and Industrialization Support: Africa’s long-term prosperity depends on industrialization and technological advancement. The G20 must facilitate technology transfer and capacity-building initiatives that give power to African economies. If the G20 fails to deliver meaningful reforms, African nations may increasingly turn to BRICS, which is enthusiastically positioning itself as a more responsive and approachable alternative.
Should African leaders first reform the African Union (AU) and regional blocs like ECOWAS before expecting changes in global institutions?
Of course yes, African leaders must first strengthen internal institutions before expecting global institutions to treat the continent as a unified force. Weak regional organizations undermine Africa’s bargaining power in global negotiations.
Key areas for reform include:
- Financial Independence: Reducing reliance on external donors would allow the AU and regional blocs to act with greater autonomy in decision-making.
- Stronger Enforcement Mechanisms: Regional organizations need better mechanisms to uphold democratic norms and economic agreements to prevent instability from weakening Africa’s global influence.
- Policy Coordination: A fragmented Africa cannot effectively engage with global institutions. Greater intra-African coordination is needed to present a unified front in international forums. If Africa wants to negotiate from a position of strength, its institutions must be stable, credible, and self-sufficient. Strengthening the AU and regional organizations will enhance Africa’s ability to engage effectively with both G20 and BRICS.
Final Thoughts: The Vision of ‘Africa We Want’
The realization of the “Africa We Want,” as outlined in the AU’s Agenda 2063, requires strategic engagement with external partners. However, Africa must ensure that these partnerships are mutually beneficial rather than reinforcing external dependencies. South Africa’s role is fundamental in this vision. As a bridge between the West, BRICS, and the African continent, it must advocate and promote policies that advance Africa’s long-term interests and objectives. Africa’s engagement with the G20, BRICS, and other international platforms must be strategic to ensure that these institutions contribute to Africa’s broader development agenda rather than perpetuating historical imbalances. In the end, Africa’s success in the global arena will depend on its ability to take advantage from both external partnerships and internal reforms.
By Adedapo Adesanya
The Pan-African Payments and Settlement System (PAPSS), a pan-African payments infrastructure provider designed to facilitate trade on the continent is piloting an African currency market platform to boost commerce across borders in the region.
According to its chief executive, Mr Mike Ogbalu, the service backed by 15 central banks on the continent, expects to add the platform later this year.
He said this will complement its payments infrastructure that it says is currently integrated with 150 commercial banks.
“The rates will be market driven, and our system is able to do a matching based on the rates offered by the different participants in our ecosystem,” the CEO of PAPSS, told Reuters in an interview from Cairo.
The Africa Currency Marketplace, as the platform will be known, will allow parties to exchange local currencies directly, Mr Ogbalu said.
Africa has faced challenges in its foreign exchange markets with challenges ranging around liquidity.
Already, South Africa and Nigeria dominate geographically and much of the wider trading centre around local and hard currency pairs. Those seeking other African currencies must typically secure Dollars first.
However, the region has also seen some major currency reforms with countries such as Nigeria, Egypt and Ethiopia pushing ahead with efforts to move to more market-based regimes.
There have been frequent case of companies not being able to repatriate their revenue from other countries in the region, whenever violence or economic problems cause Dollar shortages in markets like South Sudan or the Central African Republic.
Mr Ogbalu cited the example of an Ethiopian airline selling Naira-denominated tickets in Nigeria, which could then exchange its naira revenue with a Nigerian company trading in Ethiopia using the Birr.
“Our system will intelligently match them and then party A will get Naira in Nigeria and party B will get birr in Ethiopia. The transaction just completes without any third-party currency being involved at all,” Mr Ogbalu said.
He also noted that companies operating in the region have been forced to take a write down every financial year to account for currency revaluations in markets with volatile currencies.
He added that others have invested in assets like real estate to try to preserve the value of their assets in such markets.
There have been attempts to use cryptocurrencies like Bitcoin to get around that problem but their usage is still low, partly due to lack of legal frameworks to support their use in markets like Kenya.
“Those are some of the things we think that this African currency marketplace will unlock,” he said.
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