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Experts Discuss Russia’s Weak Economic Presence in Africa

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Russia's Weak Economic

By Kester Kenn Klomegah

Russia’s weak economic presence in Africa has become a thing of concern for some experts in the country and they wonder why the nation is not aggressive with this like its ally, China.

In July 2021, participants at the Association of Economic Cooperation with African States (AECAS), established under the aegis of the Secretariat of the Russia-Africa Partnership Forum (RAPF), agreed that lack of financial support was the major reason for this.

The forum, which had in attendance some leading Russian companies and banks, discussed an effective system of financing projects and supporting investment in Africa.

Financing projects in Africa is one of the important keys and, at the same time, the most difficult issue for major Russian companies attempting to expand to Africa, and the financial instruments at their disposal are insufficient, according to Anna Belyaeva, Executive Director of AECAS.

“We explicitly understand that the current funding mechanisms are not enough. We have analysed the experience of European and Western colleagues from developed countries, our direct competitors in Africa: all of them already have mechanisms and funds focused on Africa,” she said.

Nikita Gusakov, Head of the Russian Export Credit and Investment Insurance Agency (EXIAR), reiterated that Africa was a priority for the agency, outlining a number of deals that EXIAR has been involved in on the continent.

He was also critical and frank on a few points relating to finance mechanisms and slowness in delivering on investment pledges and the extent these have affected effective economic cooperation between Russia and Africa.

“We have the desire and the capacity to finance projects in Africa. In our experience, there are two problems that need to be addressed: the low level of project planning by Russian companies wishing to enter the African market, and the lack of awareness among Russian companies of the opportunities available on the African market,” Gusakov unreservedly underlined.

The meeting collectively acknowledged Africa as a huge continent that still requires economic development. Its active demographic growth and abundance of natural resources offer conditions to become the world’s biggest market in the next few decades.

Russians are searching for long-term businesses and entrepreneurship in a wide range of sectors, citing the presence of the strong presence of the United States, European Union members, China, India, and many others in the continent.

The current geopolitical developments and the scramble for emerging opportunities by external countries in Africa is the stacked reality.

Perspectives and outlook for future development are immense, some African leaders and particularly corporate business leaders with foreign players are consistently collaborating and fixing their strategic partnership networks within the continent, striving to understand the emerging challenges and mapping out how to seize the opportunity to build businesses in Africa.

In addition to that, foreign players are investing research and development (R&D) with their African partners. As Nikita Gusakov, Head of the Russian Export Credit and Investment Insurance Agency (EXIAR), reiterated at the meeting, one of the roadblocks is the lack of adequate knowledge among Russian companies about the opportunities available in Africa. It is partly due to limited interaction with the private sector actors and civil society.

There should be an emphasis on employing policy strategists who actually understand business cultural ideas, the current political and economic trends in Africa. Russians must also invest in more R&D collaborations with their African partners.

In order to raise the economic influence, Russians have been making efforts to identify a structured finance mechanism for mega infrastructure projects such as nuclear power and energy, natural resources exploration and to significantly increase trade with Africa.

For instance, the United States, European Union members, Asia countries such as China, India and Japan, have provided funds to support companies ready to carry out projects, and that include some basic researches, in various sectors in African countries. Some have publicly committed funds, including concessionary loans, for Africa.

During the last Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC), Chinese President Xi Jinping said “China will expand cooperation in investment and financing to support sustainable development in Africa. China provided US$60 billion of credit line to African countries to assist them in developing infrastructure, agriculture, manufacturing and small and medium-sized enterprises.”

 It fully understands Africa’s needs and its willingness to open the door to cooperation in the field of scientific and technological innovation on an encouraging basis.

The method for financing the building of infrastructure is relatively simple. In general, governments obtain preferential loans from the Export-Import Bank of China or the China Development Bank, with the hiring of Chinese building contractors.

The Chinese policy banking system allows leading Chinese state-owned enterprises to operate effectively in Africa, with the majority of these activities in infrastructure and construction in Africa.

China has always been committed to achieving win-win cooperation and joint development with Africa. Russia could consider the Chinese model of financing various infrastructure and construction projects in Africa.

 Official proposals for all kinds of support for trade and investment has been in the spotlight down the years.

In May 2014, Russian Foreign Minister Sergey Lavrov wrote in one of his policy articles published on the ministry’s website: “we attach special significance to deepening our trade and investment cooperation with the African States. Russia will provide African countries with extensive preferences in trade.”

Lavrov wrote: “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. The creation of a mechanism for the provision of public support to business interaction between Russian companies and the African continent is highly on the agenda.”

After the first Russia-Africa Summit in the Black Sea city, Russia Sochi in October 2019, Russia and Africa have resolved to move from mere intentions to concrete actions in raising the current bilateral trade and investment to appreciably higher levels in the coming years.

“There is a lot of interesting and demanding work ahead, and perhaps, there is a need to pay attention to the experience of China, which provides its enterprises with state guarantees and subsidies, thus ensuring the ability of companies to work on a systematic and long-term basis,” Foreign Minister Lavrov said.

According to Lavrov, the Russian Foreign Ministry would continue to provide all round support for initiatives aimed at strengthening relations between Russia and Africa.

“Our African friends have spoken up for closer interaction with Russia and would welcome our companies on their markets. But much depends on the reciprocity of Russian businesses and their readiness to show initiative and ingenuity, as well as to offer quality goods and services,” he stressed.

Senator Igor Morozov, a member of the Federation Council Committee on Economic Policy, and Chairman of the Coordinating Committee on Economic Cooperation with Africa noted during one of the meetings that in conditions of pressure from sanctions, it has become necessary to find new markets, new partners and allies for Russia.

“This predetermines the return of Russia back to Africa, makes this direction a high priority both from the point of geopolitical influence and in the sphere of trade and economic context,” he underscored his objective comments.

“It is important for us to expand and improve competitive government support instruments for business. It is obvious that over the thirty years when Russia left Africa, a number of countries such as China, India, the United States and the European Union have significantly increased their investment opportunities there in the region,” Morozov stressed.

With a renewed growing interest in Africa, Russians are feverishly looking for establishing effective ways of entry into the huge continent.

As result, Senator Igor Morozov unreservedly suggested creating a new structure within the Russian Export Centre – an investment fund, explaining further that “such a fund could evaluate and accumulate concessions as a tangible asset for the Russian raw materials and innovation business.”

His Coordinating Committee has the responsibility for adopting a more pragmatic approach to business, for deepening and broadening economic collaborations and for the establishment of direct beneficial contacts between entrepreneurs and companies from Russia and African countries.

The Coordinating Committee for Economic Cooperation with African States was created in 2009 on the initiative of the Chamber of Commerce and Industry of the Russian Federation and Vnesheconombank with support from the Federation Council and the State Duma of the Federal Assembly of the Russian Federation. It has had support from the Ministry of Foreign Affairs, the Ministry of Economy and Trade, the Ministry of Natural Resources, as well as the Ministry of Higher Education and Science.

President of the Russian Chamber of Chamber and Industry, Sergei Katyrin, added his voice for the establishing a finance mechanism, saying “the primary task now is to accelerate Russia’s economic return to African continent, from which we practically left in the 90s and now it is very difficult to increase our economic presence there in Africa.”

According to Katyrin, Russia’s economic presence in Africa today is significantly inferior in comparison to the positions of leading Western countries and BRICS partners. “It’s time to overcome this yawning gap. Today, we face a difficult task to ensure the activities of Russian entrepreneurship on the African continent in the new conditions, taking into account all the consequences of the coronavirus pandemic.”

Katyrin, in addition, said “we need a state financial mechanism to support the work of Russian business in Africa otherwise it will be very difficult to break through the fierce competition of Western companies with such support. We need to focus on those areas where we can definitely count on success.”

According to UNCTAD’s World Investment Report 2020, the top five investors in the African continent are European Union (Netherlands, France, Germany, the United Kingdom), the United States and China. There are also the Gulf States, United Arab Emirates and Turkey consistently playing active roles on the continent.

In practical reality, the introduction of the African Continental Free Trade Area (AfCFTA), gives an additional signal for foreign players to take advantage of this new opportunity in Africa. It aims at creating a continental market for goods and services, with free movement of business people and investments in Africa. As trumpeted, the AfCFTA has a lot more on offer besides the fact that it creates a single market of 1.3 billion people.

Notwithstanding the setbacks down these years, Russians are still full of optimism. That said, however, Russia has its own approach towards Africa. It pressurizes no foreign countries neither it has to compete with them, as it has its own pace for working with Africa. After the first Russia-Africa Summit, there is a well-functioning structure to achieve more practical and comprehensive results from the new phase of relations between Russia and Africa.

With the same optimism towards taking emerging challenges and opportunities in Africa, Russia has to show financial commitment especially now when the joint declaration adopted from the first historic Summit held in October 2019 ultimately sets the path for a new dynamism and provides an impetus for the existing Russia-Africa relations.

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UK Flags Borno, Yobe, Others as Danger Zones

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United Kingdom UK Danger Zones

By Ashemriogwa Emmanuel

The United Kingdom (UK) has advised its citizens against travelling to some northern and middle belt states in Nigeria it described as danger zones as a result of the heightened kidnap cases and increased insecurity in those regions.

These states include Borno, Yobe, Adamawa, Gombe, Kaduna, Katsina, Zamfara, Delta, Bayelsa, Rivers, Akwa Ibom and Cross River.

In a travel advisory for its nationals released on Saturday, October 16, the UK Foreign, Commonwealth and Development Office (FCDO) announced to foreign nationals that there was a high threat of kidnap throughout Nigeria for ideological, financial or political reasons.

According to the advisory, “The groups have previously shown intent and capability to conduct kidnaps in Nigeria. Foreign nationals, including humanitarian workers, are likely targets for kidnap.

“Humanitarian hubs and workers have been targeted during attacks in the North East, including Monguno, Borno State on June 13, 2020.

“There’s a high threat of kidnap throughout Nigeria. Kidnaps can be motivated by criminality or terrorism and could be carried out for ideological, financial or political gain. Anecdotal evidence suggests that the risk of kidnap increases after dark.

“The security environment in the North East has deteriorated since 2018 and there is a heightened risk of kidnap. Kidnaps in the North East have included humanitarian and private-sector workers.

“There are also reports that Boko Haram and Islamic State West Africa, ISWA, are continuing to actively plan to kidnap foreigners.

“In North-East Nigeria, extremist groups operate in some northern and middle belt states, including Bauchi, Gombe, Kano, Kogi, Kaduna, Niger and Adamawa states. If you’re working or travelling in these states then you should be aware of the risk of terrorist kidnapping.”

The information also disclosed the increased protests and demonstrations in the South East region of Nigeria Since August 9, 2021, warning that stay-at-home protests are likely during October in the South East region.

“There have been reports of violence during Stay at Home protests previously. You should monitor local media, avoid any demonstrations or large gatherings and follow any instructions from local police and security forces.

“There have been a number of attacks and targeted killings in the South-east and Southsouth regions of Nigeria, including in the states of Akwa Ibom, Rivers, Imo, Abia, Anambra, Delta, Edo and Ebonyi.

“Some of these attacks have been on isolated roads and in remote locations, but there is a chance that they could occur in metropolitan areas. There is also a heightened risk of indiscriminate attacks on police and security infrastructure, which may inadvertently affect bystanders,” it read.

The UK government then advised travellers to these regions to exercise caution if travelling in remote areas at night and follow local news outlets for further information.

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New US Travel Rules Excludes Foreigners Vaccinated with Russia’s Sputnik V

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Sputnik V

By Kester Kenn Klomegah

Local and foreign media have stepped up reports about rising COVID-19 infections in Russia. While the reports indicated high deaths in the country, the other highlighted new trends that are noticeably appearing there.

Interestingly, directors at the Russian tourism and travel agencies say that many Russians are lining up for vaccine tourism in Serbia, Bulgaria and Germany and a few other foreign countries.

These Russians aim at getting foreign vaccines including Pfizer, Moderna and Johnson & Johnson and AstraZeneca.

Here are a few facts about Russian vaccines.

Russia’s Sputnik V was the first officially registered coronavirus vaccine on August 11, 2020. Russia is using four vaccines for mass vaccination for COVID-19. These are Sputnik V and Sputnik Light developed by the Russian Health Ministry’s Gamaleya Center.

EpiVacCorona developed by the Vector Center of the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor), and CoviVac developed by the Chumakov Institute of the Russian Academy of Sciences.

Clinical trials of the EpiVacCorona vaccine on teens aged from 15 to 17 might begin in the near future.

China has a 1.3 billion population and has given the two billionth vaccine by the end of August, the United States has 380 million and has vaccinated 60% of its population. In Europe, the vaccination rate is high at an appreciable level.

Overall, Russia with an estimated 146 million people has Europe’s highest death toll from the pandemic, nearly 210,000 people as of September 30, according to various authentic sources including the National Coronavirus Task Force.

More than 42 million Russians have received both components of a coronavirus vaccine, according to Russian Deputy Prime Minister Tatyana Golikova.

“The number of citizens who have received the first component of a vaccine has topped 44 million, and more than 37 million people have completed a full vaccination course,” Golikova said.

She gave an assurance back in July that once the population have been immunized with at least the first component of a two-shot vaccine, herd immunity to COVID-19, or at least an 80% vaccination rate, should be reached by November 1.

Even though Russia boasted of creating the world’s first coronavirus vaccines, vaccination is very low. Critics have principally blamed a botched vaccine rollout and mixed messages the authorities have been sending about the outbreak.

In addition, coronavirus antibody tests are popular in Russia and some observers suggest this contributes to the low vaccination numbers.

Western health experts say the antibody tests are unreliable either for diagnosing COVID-19 or assessing immunity to it. The antibodies that these tests look for can only serve as evidence of a past infection. Scientists say it’s still unclear what level of antibodies indicates that a person has protection from the virus and for how long.

Russia has registered Sputnik V in more than 150 foreign countries. The World Health Organization is yet to register this vaccine. For its registration, it must necessarily pass through approved procedures, so far Russia has ignored them, according to reports.

There have also been several debates after the World Health Organization paused its review process of the Sputnik V vaccine over concerns about its manufacturing process, and few other technical reasons. While some talked about politicizing the vaccine registration, others have faced facts of observing recognized international rules for certifying medical products as such vaccines.

During the first week of October, Russian Health Minister Mikhail Murashko has reiterated or repeated assertively that a certain package of documents was needed to continue the process for the approval of the Russian coronavirus vaccine Sputnik V by the World Health Organization. The final approval is expected towards the end of 2021.

Still, one of the problems with registration is unfair competition in the global market. For instance, Russian Minister of Industry and Trade Denis Manturov said in an interview with the Rossiya-24 television channel on October 5: “I think it is an element of competition. Until Pfizer covers a certain part of the market, it is pure economics.”

On the other side, Pyotr Ilyichev, Director for International Organization at the Russian Foreign Affairs Ministry, told Interfax News Agency, for instance, that World Health Organization has been playing politics around Russian vaccine especially when it is needed in most parts of the world.

“The world is facing an acute shortage of vaccines for the novel coronavirus infection. In certain regions, for instance in African countries, less than 2% of the population has been vaccinated. The Russian vaccine is in demand, and the UN stands ready to buy it,” he told Interfax.

“However, certification in the WHO is a complex, multi-step process, which was developed in the past in line with Western countries’ standards. It requires time and serious efforts from our producers. We hope that this process will be successfully finalized in the near future,” Ilyichev said.

Chairman of the State Duma’s Foreign Affairs Committee Leonid Slutsky has described as discriminatory a decision reported by foreign media that the United States, under its new consular rules, would deny entry for foreigners immunized with the Russian COVID-19 vaccine Sputnik V.

“Thus, the U.S. will blatantly embark on a path of ‘vaccine discrimination.’ There are absolutely no grounds for such decisions. The efficacy and safety of the Sputnik V vaccine have been confirmed not only by specialists but also by its use in practice,” Slutsky said on Telegram.

He cited an article in The Washington Post saying that from November the United States may begin denying entry to foreigners vaccinated with Sputnik V.

It means that if such additional border measures are adopted, foreigners seeking entry to the United States will have to be immunized with vaccines approved for use either by American authorities or the World Health Organization.

According to an article published in The Washington Post, for the first time since the pandemic began, the United States intends to loosen entry restrictions for foreigners vaccinated against COVID-19.

The new rules, which enter into force in November, will not apply to Russians vaccinated with Sputnik V and citizens of other countries using this Russian vaccine.

Under the new rules, foreigners will enter the United States only if they are immunized with vaccines approved for use by the United States Food and Drug Administration or the World Health Organization. Russia’s Sputnik V is yet to be approved by the World Health Organization and is not recognized by the United States.

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Airtel Money, Flutterwave to Explore East African Markets

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Airtel Money Flutterwave East African Markets

By Adedapo Adesanya

Airtel Money has announced a partnership with an African payments company, Flutterwave, to expand the former’s services to East African markets.

Through the partnership, businesses integrating Flutterwave in Uganda, Tanzania, Zambia, Malawi, Kenya and Rwanda will be able to receive payments from Airtel Money customers and make bulk payments into Airtel Money wallets, thanks to Airtel Money’s proprietary fintech platforms.

The new services will go live subject to regulatory approvals in the respective countries and reach Airtel Money’s 19.2 million customers in East Africa.

This is coming after a month after the fintech company announced a mobile money partnership with MTN Group to integrate Flutterwave in Cameroon, Côte d’Ivoire, Rwanda, Uganda and Zambia to receive payments via MTN Mobile Money (MoMo).

According to the company in a statement, the partnership will positively increase mobile money usage and penetration in Africa and improve local economies and livelihoods, as well as create opportunities for individuals and businesses across the continent.

Speaking on the development, Airtel Mobile Commerce BV CEO, Mr Vimal Kumar Ambat commented: “Airtel Money is committed to bridging the digital divide and enhancing financial and digital inclusion for millions of businesses across sub-Saharan Africa. Our partnership with Flutterwave will help to empower even more customers through simple and accessible payments services, using the latest technologies, that support business innovation and boost local economies.”

On his part, Flutterwave founder and CEO, Mr Olugbenga Agboola, stated that, “Our business goal is to continue to support African businesses digitise their payments methods and introduce them to a world of opportunities that come with digitisation.

“We are excited to have partnered with Airtel Money to further advance local businesses payment methods which will allow them to increasingly provide more services to their customers, grow their customer base and revenue.”

The development of Mobile Money in Africa has been nothing but remarkable and commendable with approximately 144 mobile money providers operating in Africa, with M-Pesa having over 50 million users and MTN MoMo having over 48.9 million users.

Furthermore, the International Monetary Fund (IMF) estimates show that Africa has more digital financial services users than any other region in the world, accounting for nearly half of the 700 million individual users globally.

COVID-19 has also triggered a widespread shift in the adoption of mobile money services, with the GSMA reporting a 12.7 per cent increase in the number of registered global mobile money accounts in 2020.

As the trend continues its upward spike, this partnership further responds to the growing dominance of cashless societies across the sub-Saharan region and the need to penetrate digital innovation deeper into communities across Africa.

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