World
Russian Non-Commodity Exports to Africa Reach $14.4bn
By Kester Kenn Klomegah
In this interview with Alisa Andreevna Prokhorova, the Managing Director for International Activities and Interaction with Business Councils and Group of companies of the Russian Export Center, not only discussed at length but also offers in-depth information with statistics about Russia’s trade with Africa.
The first Russia–Africa Summit has ultimately set the grounds for raising trade collaboration across various areas and work towards a new dynamism in the existing economic cooperation with African countries.
In an emailed discussion with Kester Kenn Klomegah in May 2021, Prokhorova unreservedly stressed that as the African continent undergoes positive transformation, platforms for dialogue trade between Russia and Africa are profoundly emerging too.
She particularly referred to the newly created continental free trade zone in Africa for potential Russian investors and business people, facilitate their quest for interaction with industry organizations and enterprises of the sub-Saharan African countries.
Here are the interview excerpts:
Is the African market promising from an economic point of view? Does Russia play a special role on the African continent?
What is the peculiarity of the African continent? The fact that the demand is very high (a large territory of the continent, 54 countries), but many countries are not creditworthy. In all countries of the world, large corporations plan a strategy to enter the market with a deferred effect. So, they invest.
For example, China enters many African countries and takes major projects, but implements them at its own expense, because at the moment, it’s very difficult to achieve high demand from the African population.
Russian companies do not have enough resources to engage in such investment expansion. The market is potentially the largest, Africa – is the continent of the future, but at the moment, the demand is generally limited.
Secondly, the USSR was very active in Africa. It had built and invested a lot, so since those times Russia has a positive image. Besides the past achievements, it is still necessary to build more business partnerships and form an economic strategy for the future.
What is the dynamics of economic relations between Russia and Africa over the past five years? Which changes are being tracked?
Russian exports to African countries over the past decade have generally shown a steady upward trend (adjusted for a number of specific factors). If in 2010, exports were only $5 billion (less than 1.5 per cent of the total), then in 2019, it was already $14 billion (3.3 per cent).
Due to the low share of fuel in the supplies, the role of Africa in non-commodity exports is much more significant. Over the past 5 years, Russian non-commodity exports to Africa have consistently exceeded $10 billion (2018 was a record year as exports amounted to $14.4 billion).
Speaking about Africa, we need to clearly distinguish the countries of this continent into two groups: the northern and southern parts. Russia traditionally has good economic relations with the countries of North Africa (trade turnover of $11.7 billion in 2019), where there is a dynamic growth of Russian non-resource non-energy exports.
With the South African countries (trade turnover of $5 billion in 2019) the statistics are more inconsistent, where the export of Russian non-commodity goods over the five past years ranges from $1.8 billion in 2015 to $2.2 billion in 2019. In spite of that, 2018 was the most successful year with an export volume of $2.7 billion.
How much does Russia export to African countries on average per year? Which of them have the largest share in the Russian trade balance?
As I have already noted, Russia works most actively with the countries of Northern Africa where Egypt stands out. Algeria and Morocco can also be distinguished.
Non-commodity exports 2019 (USD million): Egypt – 5407, Algeria – 2985, Nigeria – 367, Morocco – 332, Sudan – 271, South Africa – 260, Tunisia – 170, Kenya – 156.
Non-commodity exports for 8 months in 2020 (USD million): Egypt – 1624, Algeria – 1148, Nigeria – 279, Sudan – 203, Morocco – 199, South Africa – 155, Kenya – 115, Tunisia – 102.
As for major export contracts, the following can be noted:
The contract for the supply of 1.3 thousand passenger railcars for Egypt, in the amount of about 1 billion euros, was won by Transmashholding in cooperation with its Hungarian partner (the head contractor is the Tver Carriage Building Plant). Deliveries under this contract have already begun and by October, 117 railcars ($59 million) have been shipped. EXIAR and EXIMBANK of Russia also take part as I know.
What is the role of non-commodity exports in trade with African countries? Moreover, are there any major infrastructure projects with the participation of Russia?
Russian Export Center pays priority attention to the development of the relations with sub-Saharan Africa. The outcome of 2020 the volume of non-commodity export amounted to $432.1 million. There was support for the supply of Russian products in 34 countries of the region.
The main destinations of Russian non-commodity exports were: Rwanda ($165 million), South Africa ($32 million), Zambia ($27.5 million), Tanzania ($17.8 million), Ghana ($17.1 million), Kenya ($16.6 million) and Uganda ($14.6 million).
The main export industries are agriculture, mechanical engineering, chemical industry, timber industry, and metallurgical industry.
At the moment Russian Export Center takes part in the development of prospects for the participation of Russian companies in a number of infrastructure projects, in particular, for the equipment and construction of hydroelectric power plants in a number of countries in East Africa, the construction of a railway in one of the countries in West Africa.
Today, our portfolio also includes projects for the supply of products from the Russian automobile industry to Ghana, Nigeria and Ethiopia. A project for the supply of agricultural and railway equipment to a number of countries in South Africa is being worked out. In total, the work is carried out on projects in 18 countries of the region.
With the participation of the Russian Export Center the implementation of a number of landmark projects of Russian companies in Africa in key industries, whose products are most in-demand on the continent, is being discussed. It’s about the mining industry, metallurgy, chemical industry, agricultural products, infrastructure projects.
Special attention is paid to the development of exports of Russian high-tech products, the possibilities of supplying medical equipment, high-tech solutions in the field of hydro and solar energy, communication and security systems are being worked out. It is important to note that most of these projects are long-term, and their full implementation and delivery of results require long-term collaboration with African counterparts.
Economic partners from which African countries are interested in obtaining accreditation and which of the services are in demand?
We are also stepping up our efforts to expand our foreign network. Since December 2021, the Russian Export Center has accredited partners in countries such as the Democratic Republic of the Congo (DRC), Angola, the Republic of the Congo, Ivory Coast, and Rwanda. Partners in countries such as Ethiopia, Kenya, Tanzania, Ghana, and Senegal are in the process of accreditation.
We record an increase in the interest of Russian exporters in obtaining both financial services (lending and insurance) and non-financial services (search for a foreign buyer, top-level search for a partner) in West Africa (Nigeria, Benin, Ghana, Ivory Coast) and a number of East African countries (Tanzania, Kenya, Ethiopia).
We note an increase in the number of requests to find a Russian supplier from sub-Saharan Africa. Companies from such countries as South Africa, Nigeria, Ivory Coast, Ghana, Ethiopia, Tanzania, and Benin are most interested in increasing imports of Russian companies’ products. Most frequently, we receive requests to search for suppliers in such industries as mineral fertilizers, food products and petrochemicals.
Are you planning to establish cooperation with regional organizations and, if so, with which ones?
We plan to expand the channels of interaction with industry organizations and business councils of the sub-Saharan African countries. Special emphasis will be placed on cooperation with regional integration groupings (for example, the Southern African Development Community-SADC, the Economic Community of West African Countries-ECOWAS and the East African Community-EAC).
Besides, several projects can be noted: the activities and plans of the Afrocom at the Russian Chamber of Commerce and Industry (CCI) in the direction of Africa, the Russia-Africa Summit 2022, and the possible opening of a tasting pavilion in one of the African countries.
Why African business is extremely low or completely absent, compared to Asian countries, in the Russian Federation? Under the circumstances, what should be done to improve the current situation, to make a two-way trade?
The development of bilateral relations in the business environment depends on the intergovernmental commissions. These commissions work out the terms of cooperation as well as resolve issues of economic, technical and legal nature. In order to improve the situation in two-way trade between Russia and Africa, it is necessary to develop state cooperation.
Moreover, the remoteness and insufficiency of developed transport networks with Africa are also key issues of bilateral cooperation. The elimination of trade barriers and dialogue at the level of intergovernmental commissions will allow countries to improve two-way trade links.
With the adoption of African continental free trade, what is your interpretation of this free trade, and how useful it could be for corporate Russian exporters?
The African free trade zone opens up opportunities for the free movement of services, goods, capital and labour in the region. This reduces costs and facilitates trade between countries, making Africa even more attractive to other states.
Russia supports the concept of the African free trade zone because it is very convenient for exporters who get the necessary certificates and trade permits in one country and then sell their products to other African states. This free trade area allows producers to reduce the costs and time of transportation of goods. It increases the attractiveness of the African market and makes it more significant for Russian exporters.
By Adedapo Adesanya
Nigeria’s West African neighbour, Cote d’Ivoire, may be the latest country in the African continent to get a Startup Act as the Ivorian government unveiled the framework designed to support the country’s most talented start-ups.
The journey began in 2018, and after much deliberations, in August 2021, startup ecosystem players gathered in the capital Yamoussoukro to develop a local law fostering startups in the West African country.
Two years later, the bill was approved by the Ivorian Council of Ministers, the country’s top executive decision-making body.
The bill, among other things, establishes the terms of financing and support for digital startups under Ivorian law. Its special goal is to support the development and sustainability of these vulnerable enterprises’ creative activity until they reach maturity in order to maximise their contribution to the transformation of the national economy and the quality of life of the people.
To give more weight and visibility to young innovative companies, Côte d’Ivoire announced a new legal framework. The Ivorian Startup Act, which is awaiting parliamentary approval, should soon bring a wind of change in the entrepreneurial ecosystem.
Speaking on this recently following a meeting with stakeholders from Tunisia, the first African country to pass a Startup Act, Florence Tahiri Fadika, who is a technical advisor in charge of innovation and change at the country’s Ministry of Communication and the Digital Economy, said, “A meeting with our Tunisian counterparts during a benchmarking study at the end of 2022 accelerated the process. Tunisia is one of the first countries in Africa to have implemented a Startup Act. Their model is inspiring because it is very operational. The benchmarking mission, organized by the NTF V project, enabled us to benefit from Tunisia’s experience and to identify good practices.”
Following Tunisia’s model, the Ivorian Startup Act is driven by a strong political will and intends to bring concrete results.
“While waiting for the law to be officially voted by our assemblies, we are already working to make the Startup Act a tangible reality. The idea is not to copy the Tunisian legislation but to adapt it to the reality of our economy. A mapping study is underway and should enable us to precisely target the needs of our ecosystem,” Fadika said.
“At the same time, we are developing construction projects for new technology parks and start-up campuses,” she said. “Under the Startup Act, eligible start-ups will be able to benefit from state-of-the-art infrastructure and numerous amenities in order to succeed both regionally and internationally.”
The beneficiary start-ups will be able to access new opportunities in terms of training, financing, promotion, and access to public contracts and international markets.
When it becomes a law, the country will join Tunisia (April 2018), Senegal (December 2019), and Nigeria (October 2022) as African countries with startups backing the legislation.
By Kestér Kenn Klomegâh
Parliamentarians from Russia and Africa discussed issues of development of economic cooperation during the first day of their conference March 19 to 20, in Moscow.
The objectives of the conference are to strengthen parliamentary cooperation with African countries in the conditions of formation of a multipolar world, to develop relations and develop common approaches to legal regulation in the economy, science and education and security.
Round table discussions on the topic “Legislative Response to Economic Challenges” was held as part of the International Parliamentary Conference Russia-Africa events.
First Deputy Chairman of the State Duma, Alexander Zhukov, stressed that Africa “is a rapidly developing region with great prospects and that Russia is currently actively working to enhance cooperation with the countries of the African continent.”
“Unlike many Western countries, Russia does not have colonial experience, and the contribution of the Soviet Union to the liberation of African countries from colonial dependence is also well known to everyone,” he explained.
“An important part of the cooperation should be the exchange of legislative experience with African countries in key areas,” he said.
“Our mutual economic interests include investments, cooperation within production chains, cooperation in strategic infrastructure projects, energy, medicine, financial technologies, and that, of course, along with the traditional supply of grain and fertilizers,” said the First Deputy Chairman of the State Duma.
Africa stands for an equal partnership
Jacob Mudenda, the Speaker of the National Assembly of the Republic of Zimbabwe, stressed that there should be a “specific approach” to provide a legislative response to economic challenges.
“Africa has resources, including those that cannot be found in other countries, even in developed ones. That is why Africa is the best investment option,” he said.
“Africa is against economic colonization; Africa stands for equal partnership,” said Jacob Mudenda.
Speaking about legislative issues, he said that the continent needed infrastructure and its development, such as road improvements, rail and air transport.
“If there is no infrastructure, it will be impossible to trade even with developed countries such as Russia and with Africa,” said the Speaker of the National Assembly of the Republic of Zimbabwe.
He also noted the necessity to develop the energy sector for industry and sufficient water for agriculture.
Energy cooperation
The Chairman of the State Duma Committee on Energy, Pavel Zavalny, said that signing intergovernmental agreements was an important tool of political support for enhancing energy cooperation between Russia and African countries.
He emphasized that energy was one of the most promising areas of economic cooperation between Russia and African states. Economic growth and energy demand are shifting to Asia and Africa in global economic and geopolitical transformation conditions.
“One of the tools for intensifying economic cooperation is political support. Currently, there have been established economic cooperation with 14 countries of the continent at the state level, there were created high-level bilateral commissions, and signed intergovernmental agreements,” stressed Zavalny.
“The development and harmonization of energy legislation can play an important role in enhancing mutually beneficial energy cooperation between Russia and African countries. And that is the work that we should do in the interests of our nations,” concluded the Chairman of the State Duma Committee on Energy.
Multipolar world instead of hegemony
Jean-François Buzonni, a deputy spokesman assistant for the Union of the Congolese Nation (Congo) political party, said he was very pleased that Russia had turned its attention to the African continent, “which for many years has been under the yoke of Western countries.”
“The world no longer lives under the hegemony of one country. We see the transformation processes of a multipolar world,” he stressed.
“I am glad that Russia is seeking to develop equal partnership relations with the countries of the region for the common benefit,” added Jean-François Buzonni.
Transition to national systems of settlement
According to Maxim Topilin, the Chairman of the Committee on Economic Policy, the sanctions and pressure that Russia is experiencing just prove that “any situation in which a country maintains its independent position can lead to the destruction of all economic ties.”
“That should be a lesson to us,” he added.
Topilin said that in relations between Russia and Africa, it is necessary to focus on national systems of settlement. “It is very important not to be based on those standard principles, use those currencies that we used in the framework of joint projects,” he said.
Topilin is convinced that for further cooperation between Russia and Africa, it is necessary to create new international organizations. “We should think about new supranational institutions for recognition, certification, and admission to the markets of certain goods. There is a lot of work that should be done,” said the Chairman of the Committee on Economic Policy.
Topilin also recalled that a draft law on Islamic banking was being prepared for the second reading, and members of the State Duma plan to adopt it during the spring session. “From the point of view of cooperation with Islamic countries, that definitely will be a very serious breakthrough in the financial strategy,” he added.
More than 40 parliamentary delegations from African countries arrived at the conference, which was also attended by members of the State Duma, senators of the Federation Council, and representatives of the educational and business community. The conference was held just a few months before the second Russia-Africa summit, which is planned to be held in July 2023 in Saint Petersburg.
By Kestér Kenn Klomegâh
Russia and African parliamentarians continue forging solidarity against growing neo-colonial tendencies in Africa. The parliamentarians, far ahead of their symbolic gathering, have intensified political dialogue and support for Russia’s war on neighbouring Ukraine and further expressed readiness to support Africa’s economic development.
Russia has come under stringent economic sanctions from the United States and Europe due to the ‘special military operation’ that it began in February 2022, more than a year that has adversely affected Africa. It has also divided Africa’s voting at the United Nations, with some experts arguing that such sharp divisions, in terms of voting either for or against, abstaining or keeping neutral, could influence Africa’s unity in the continent.
Some policy experts still expect high symbolism at the 2023 Russia-Africa summit as official working visits have become more frequent and Africa receives greater coverage in Russian media. The experts say instead of measuring the success of the summit by African leaders’ attendance, as happened in 2019, the parties give greater attention to the substance of the agenda, which is under development. Russia should try to increase its presence in Africa while avoiding direct confrontation with other non-regional and foreign players.
According to the experts, Russia’s efforts, for now, are not practically showing tangible results. Russia has to open its doors more to African visitors and tourists; these could bring together anyone interested in expanding all-inclusive dialogue and anyone who is ready to help promote initiatives possibly for increasing socio-economic development between Russia and the African states and raising the well-being of their citizens.
That however, undeterred by the pressure from the United States ‘to cancel Russia’ in their relationship, African parliamentarians have arrived in Moscow for a two-day working gathering to methodically develop Russian-African relations in various fields. In addition, to the political dialogue, they are also focusing on economic, cultural, humanitarian and scientific cooperation.
According to the plan, Russian parliamentarians and African colleagues fixed topical issues of the international parliamentary agenda for discussions: parliamentary support of scientific and educational cooperation, a legislative response to economic challenges, indivisible security: capabilities and contributions of parliaments, and neocolonialism of the West: how to prevent the repetition of history.
On March 20, the main conference entitled “Russia-Africa in the multipolar world” at the State Duma (the Pillar Hall of the House of the Unions). More than 40 official parliamentary delegations from almost all African countries have already arrived for the conference. Representatives of the scientific, educational and expert communities from Russia and African countries, members of the State Duma, federal executive authorities, senators of the Federation Council, and chairmen of the legislative bodies of the constituent entities of the Russian Federation.
There was a bilateral meeting of the Chairman of the State Duma, Vyacheslav Volodin and the Speaker of the National Assembly of the Parliament of South Africa, Nosiviwe Mapisa-Nqakula, at the State Duma. The Speaker stressed that the Republic highly appreciated the dialogue with Russia.
Speaker Volodin noted that attempts by Washington and Brussels to isolate Africa and Russia have failed. He is convinced that the parliaments could do a lot for further development of relations on the principles of respect, non-interference in the internal affairs of other states and mutually beneficial cooperation.
He stressed that relations between Russia and the Republic of South Africa were developing with the help of cooperation between the presidents of the two states. “We have great capabilities, and we should use the parliamentary dimension to do everything to enhance our cooperation in various areas,” added Volodin. He suggested preparing and signing a relevant agreement between the State Duma and the National Assembly of the Parliament of South Africa, as well as creating a high-level commission. Nosiviwe Mapisa-Nqakula supported his suggestion.
Mapisa-Nqakula thanked Vyacheslav Volodin for sending the invitation to take part in the Parliamentary Conference before adding “It is very important for us that Russia gives priority to the African continent. Many countries consider Africa as a great possibility to get African resources. But taking into account the history of our cooperation, we, like many other African countries, believe that Russia has other, more genuine interests in Africa.”
“Our cooperation started decades ago. And we felt your support in the worst times for us, during apartheid. We understand that now it is a difficult time for Russia as a country. But I would like to assure you that South Africa will continue cooperation and discuss areas of cooperation that are important for us. We look forward to its start,” said Nosiviwe Mapisa-Nqakula.
The speakers also discussed issues of cooperation within the framework of the BRICS, as it is South Africa’s chairmanship. “For us, the cooperation between the parliaments within the BRICS framework is very important, as we can discuss issues of common interest,” emphasized the Speaker of the National Assembly of the Parliament of South Africa.
“Our Conference will be an important stage in the process of preparing for the second Russia-Africa summit, which is planned to be held in Saint Petersburg this summer with the participation of the heads of state,” concluded the Chairman of the State Duma.
According to reports monitored by this author, there are 17 specialized working groups that focus on various areas of cooperation between Russia and Africa. The expectation is that these working would come up with useful initiatives to be incorporated into an action plan for 2023-2026 and further cement the entire complex of relations between Russia and the African countries.
Russian President Vladimir Putin will speak at the Russia-Africa parliamentary conference on Monday, Kremlin aide Yury Ushakov told reporters. “On March 20, when the president receives the Chinese leader, he will address the 2nd parliamentary conference Russia-Africa,” Ushakov, who heads the organizing committee of the summit, said, adding that the event would pave the way for the 2nd Russia-Africa summit, scheduled to take place from July 27-28 in St. Petersburg, second largest city of Russia.
