How is Russia Straddling to Make Economic Impact in Africa

February 28, 2023
in Africa

By Kestér Kenn Klomegâh

While Russia’s interest in sub-Saharan Africa is nothing new, Russian authorities have realized that it’s time to move back primarily to reclaim its economic footprints and to find old Soviet-era allies, but that step comes with new challenges, especially from other foreign players and the changing internal political and economic conditions in Africa.

Long before it held its first symbolic summit in October 2019, many experts indicated in several policy reports that “Russia has often failed to capitalize on the historical connection between Moscow and those African elites who had been educated in the Soviet Union and Russia.”

For the past few years, Russian authorities are only demonstrating steady and strategic steps at the possibility of pushing huge investments in lucrative sectors, often rattling in hyperbolic statements on ways to strengthen bilateral relations and expand economic cooperation in a number of African countries.

That theatrical show of corporate investment and business interests has been sealed into various agreements, resulting from high-powered state delegations who frequently visited both regions. Records concretely indicated that 92 bilateral agreements were signed during the first summit; little has been achieved, and yet Russians are looking forward to new agreements in the forthcoming July gathering in St. Petersburg.

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

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

In order to raise Russia’s economic influence and profile in Africa, the Coordinating Committee on Economic Cooperation with Sub-Saharan Africa, popularly referred to as AfroCom, was created in June 2009 on the initiative of the Russian Federation Chamber of Commerce and Industry and Vnesheconombank to help promote and facilitate Russian business in Africa. Since its creation, it has had full-fledged support from the Russian Government, the Federation Council and State Duma, the Ministry of Foreign Affairs and the African diplomatic community.

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

Reports also showed 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. A simple calculation shows that already been more than a decade since the establishment of the Coordinating Committee on Economic Cooperation with Sub-Saharan Africa. There are also several Joint Commissions on Trade and Economic Cooperation, and of course, there are Trade and Economic councillors at nearly all of Russia’s diplomatic missions in Africa.

But these Russian trade centres must necessarily embark on a “Doing Business in Africa” campaign to encourage Russian businesses to take advantage of growing trade and investment opportunities to promote trade fairs and business-to-business matchmaking in key spheres in Africa.

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

“It is possible that the ongoing crisis in the relations between Russia and the West will stimulate Russia’s leadership to look for new markets for new sources of agricultural produce. Many African nations possess abundant natural resources and have little interest in Russia’s gas and oil. As it was during the Soviet times, Russia could only offer a few manufactured goods that would successfully compete with Western-made products. African nations will probably continue to acquire Russian-made arms, but otherwise, I see only a few prospects for diversification of cooperation in the near future,” added Maxim Matusevich.

Foreign Minister Sergey Lavrov and the Special Presidential Representative for the Middle East and Africa, Mikhail Bogdanov, have several times paid working visits to Africa. On the other side, they have held several meetings these several years, with several high delegations from Africa. The parties have, these several years, discussed bilateral and regional issues and the improvement of diverse cooperation between Russia and Africa, including cooperation with sub-regional organizations of the continent, according to the several transcripts posted to the official website of the Foreign Ministry.

Without a doubt, Russia’s strategic return to Africa has sparked academic discussions at various levels where academic researchers openly admitted that political consultations are on track, arms export has significantly increased, but other export products are extremely low. In addition, Russia’s involvement in infrastructure development and industry has been invisible for the past decades on the continent.

In another interview, Themba Mhlongo, Head of Programmes at the Southern Africa Trust, thinks that Africa should not expect higher trade flows with Russia simply because Africa has not engaged Russia.

Mhlongo told me that “Russia has not been as aggressive as China in pursuing opportunities in Africa because Russia has natural resources and markets in Eastern Europe, South West Asia. Russian exports to Africa might be dominated by machinery and military equipment which serves their interest well.”

Notwithstanding the above weaknesses, he suggested that Africa must engage all BRICS members equally, including Brazil and Russia, in order to build alliances and open trade opportunities, including finance and investment opportunities. Also, African countries must not seem to show preferences in their foreign policy in favour of Western Europe if they want to benefit from trade relations with Russia. They must learn to be neutral; neutrality is a pragmatic strategy!

Mhlongo suspects that Africa still holds an old view about Russia being a communist state and less technologically developed or unsophisticated than Western Europe. But Russia never colonized Africa, so there are no colonial ties between the two – Africa and Russia.

“If you look at African trade flows to Europe, they reflect colonial ties most of the time. However, modern Russia is now an important emerging market country and a member of BRICS. But Russian society is closed, and its orientation is towards Western Europe, particularly the United States (probably due to the period of bipolar global power system that existed before). Russia exports to Africa but rarely sets up businesses. The language (or culture in general) could be one of the barriers to developing trade relations with Russia,” he underlined in his discussion.

He proposed that both Africa and Russia could initiate a dialogue to explore economic opportunities between them. However, there are other avenues to engage each other through the BRICS bloc or through bilateral diplomatic channels. Russia has embassies in Africa, and African countries have diplomatic representations in Russia. Africa may have to pay special attention to cultural issues, try to understand Russia in this ever-changing environment and find an entry point to engage Russia.

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

The signs for Russian-African relations are impressive – declarations of intentions have been made, important bilateral agreements signed – now it remains to be seen how these intentions and agreements will be implemented in practice, she pointed out in her discussions.

The revival of Russia-Africa relations should be enhanced in all fields: political, economic, trade, scientific, technological, and cultural. Obstacles to the broadening of Russian-Africa relations should be addressed. These include, in particular, the lack of knowledge in Russia about the situation in Africa and vice versa, suggested Arkhangelskaya.

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

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 introduces tariff preferences for trade with African partners. As a reputable institute during the Soviet era, it has played a considerable part in developing African studies in the Russian Federation.

“The situation in Russian-African foreign trade will change for the better if Russian industry undergoes 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 Aleksei Vasiliev, of the RAS Institute for African Studies and a full member of the Russian Academy of Sciences, and Evgeny Korendyasov, an expert at the RAS Institute for African Studies.

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

Leave a Reply

Stanbic IBTC Bank seamless transactions
Previous Story

Cashless Policy: Stanbic IBTC Promises Seamless Transactions

Obasanjo Buhari credible elections
Next Story

Obasanjo Not Qualified to Advise on Credible Elections—FG

Latest from World

Sangomar deep-water project

Senegal Begins Oil Production

By Adedapo Adesanya Senegal has officially joined the list of oil-producing countries in West Africa after commencing oil production for the first time last

Don't Miss