Our contributing editor Kester Kenn Klomegah reports from Moscow on a recent conference on how Russia seeks to increase its economic engagement with African countries as the country reels under US and EU sanctions
On 23 November, Russian Senators and experts gathered to discuss the export of non-oil Russian commodities to Africa at an interactive webinar organised by the Federation Council of Russia, the Chamber of Commerce and Industry of Russia and the Business Russia Association.
According to the organisers, the meeting was to identify funding for exports, to concretize proposals for increasing exports to Africa and to facilitate amendments to Russian legislations if necessary to promote exports to African markets.
Senator Igor Morozov, a member of the Federation Council’s Committee on Economic Policy who is also the Chairman of the Coordinating Committee on Economic Cooperation with Africa, delivered a keynote on “Improving State Support for Export to African Countries.”
Many questions, including the issues of developing a system of state support for Russian enterprises exporting products to the African market as well as the participation of Russian regions in the development of exports to African countries, were thoroughly discussed.
The virtual meeting was attended by influential personalities, including the Deputy Chairman of the Federation Council’s Committee on Economic Policy, Konstantin Dolgov; and a member of the Federation Council’s Committee on Constitutional Legislation and State Construction, Alexey Pushkov; as well as representatives of the Russian Union of Industrialists and Entrepreneurs. Other high-ranking participants were representatives of Russian Federation’s Ministries of Industry and Trade, Economic Development, and Finance.
Senator Igor Morozov noted that under sanctions’ pressure, new markets, new partners and allies are important for Russia. “This predetermines the return of Russia to Africa, makes this direction a priority both from the point of view of geopolitical influence and in the trade and economic context,” he said.
“It is important for us to expand and improve competitive government support instruments for business. It is obvious that over the thirty years that Russia left Africa. There are foreign players such as China, India, the United States and the European Union that have significantly increased their investment opportunities,” Morozov stressed.
He, however, suggested creating a new structure within the Russian Export Center and an investment fund, which “could evaluate and acquire concessions as a tangible asset for the Russian raw materials and innovation business.”
Konstantin Dolgov touched upon the topic of using political ties with African countries to build economic and investment cooperation. He also pointed out the need to connect Russian regions to African markets, to maximize their export potential.
Alexey Pushkov noted that with the right strategy, a big country like Russia has a chance to take strong positions in economic cooperation, in particular, with other continents, including Africa. “The competition will certainly grow,” the Senator said, noting that the situation is constantly changing.
Representative of the Russian Export Center (REC), Veronika Nikishina, informed the gathering about Russian projects that are being implemented or planned in the African countries, including the supply of passenger cars to Egypt, wheat supplies, as well as REC business missions and participation in exporters’ exhibitions.
REC offers a wide range of financial and non-financial support tools to enable Russian exporters explore foreign markets and build capacity in the global trade, Ms Nikishina said.
Generally, the African market is of particular interest to potential Russian exporters, and negotiations were going on with government, trade agencies and business community to allow establishing effective ways of entry to the huge continental market, she explained. With an estimated population of 1.3 billion, Africa constitutes a huge consumer market for all kinds of products and a wide range of services.
According to Nikishina, since July 2020, the REC had begun began to implement online business missions, which in the absence of physical contacts, allows continuing communications, maintaining current exports and looking for new niches.
According to Professor Irina Abramova, Director of the Institute for African Studies at the Russian Academy of Sciences, financial instruments are the main issue of Russian interaction with the continent. She touched upon such topics as Russian investments in African countries and the prospects for establishing direct contacts on the supply of agricultural products with African countries.
Quite recently, the Ministry of Foreign Affairs created the Secretariat for Russia-Africa Partnership Forum. The Secretariat further established an Association for Economic Cooperation with African States. The Russian Chamber of Commerce and Industry has also restructured its Coordinating Committee for Economic Cooperation with African States that was established as far back as in 2009.
According to historical documents, the Coordinating Committee for Economic Cooperation with African States was created at the initiative of the Chamber of Commerce and Industry of the Russian Federation and Vnesheconombank with the support of 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.
After the first Russia-Africa Summit in the Black Sea city of Sochi on October 23-24 in 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. Indeed, Russia now has all the structures fixed, and summit declaration that set the focused directions, for the necessary take-off to Africa.
“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 Sergey Lavrov explicitly 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.
Amid these years of European and Western sanctions, Moscow is looking for both allies and an opportunity to boost growth in trade and investment in Africa. Currently, Russia’s trade with Africa is less than half of that of France with the continent, and 10 times less than that of China. Asian countries are doing brisk business with Africa.
In terms of arms sales, Russia leads the pack in Africa, and Moscow still has a long way to catch-up with many other foreign players there. In 2018, Russia’s trade with African countries grew more than 17 percent and exceeded US$20 billion. At the Sochi summit, Russian President Vladimir Putin said he would like to bring the figure over the next few years at least to US$40 billion.
G-PAD 2020: Increased formalisation of African economies needed to confront post-Covid challenges – AfDB chief
The global coronavirus pandemic is having a devastating impact on the economies of countries around …