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Africa: Russia’s strategy and global competitors

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Undoubtedly, Africa’s fast economic growth and development, at least during the past decade, has attracted external countries including the United Kingdom, Netherlands, India, Canada, South Africa, China, the United States, Germany, and France.

Russia is steadily making efforts to penetrate African countries. But experts have argued that while focusing on building positive and genuine economic relationships, Russia has to cooperate on or compete for investment projects with foreign players in Africa.

And as Africa’s emerging and frontier markets gather pace, what other implications and opportunities this present for foreign countries looking for possible investment in the sub-Saharan African region?

Cooperation or Competition

David Shinn, an adjunct professor in the Elliott School of International Affairs and a former U.S. Ambassador to Ethiopia, explains that most business interaction usually involves competition, the private sector is proportionally much more important in India, Brazil, and South Africa than is the case in China and Russia.

At the same time, companies from two different BRICS’ member countries can team up in their effort to win a contract or start a business in Africa. The area where there is more likely to be cooperation is foreign aid. China and Brazil have been cooperating on agricultural research in Africa. Theoretically, all BRICS’ members, including Russia, could cooperate on a development project financed by two or more BRICS’ members.

Shinn believes that the BRICS have strategic differences that will complicate a unified approach in Africa. Each BRICS’ member country has its own interests in Africa. Each one has a different development model and political system.

Keir Giles, an associate fellow on the Russia and Eurasia Program at Chatham House (Royal Institute for International Affairs) in London, says that in many ways, Russia seems like the odd man out in the BRICS group. But with this emphasis from Moscow on finding alliances and alternative political fora, it’s very much in Russia’s interests to foster those relationships and present BRICS as a cohesive bloc.

In terms of interests in Africa, Russia is handicapped by having been absent from the game during the two decades when China has forged ahead with investments and presence. China has been a lot more proactive than Russia, driven in part by China’s requirement for resources. However, natural resources are just the tip of the iceberg, and Chinese companies have strategically embraced Africa as a real market in retail business, construction, consumer goods and many other sectors. The increasing number of foreign players has spurred keen competition.

“The problem remains that there are whole sectors of the economy where Russia is simply irrelevant – to take the most obvious example, consumer goods – and so their engagement will always be dwarfed by China,” Giles observes in his comment to a recent media query. “There are some more fundamental problems which Russia would need to overcome to boost its trade turnover with the region. The majority of this vast amount of trade with China simply cannot be competed with by Russia.”

Ian Taylor, a professor from University of St. Andrews in Scotland, says that Russia has minimal interest in Africa. Russia’s outward investment is dominated by large resource-based corporations that seek to gain greater access to the African market of fuel, energy and metallurgy, and expand Russian investment flows to Africa but despite a slight upsurge in interest in trade with Africa, it might be said that still, Russia has no concrete foreign policy toward the continent and is outpaced by the other BRICS states.

“Moreover, I don’t see BRICS as a cohesive group beyond the summits and so it is difficult to think of them working together for specific policies in Africa. The various companies and corporations from the BRICS countries compete individually against each other,” according to Taylor.

Prioritizing Strategies or Taking Risks

Africa, which consists of 54 states, to many experts and investors, is the last frontier. It is the last frontier because it has a huge natural resources still untapped, all kinds of emerging business opportunities and constantly growing consumer market due to the increasing population. It has currently become a new business field for global players.

But, Russia craving to be a powerhouse is comparatively missing out! “The most conspicuous aspect of Russia’s involvement in Africa is its absence,” says John Endres, chief executive officer of Good Governance Africa from South Africa, adding that “whereas the Soviet Union was quite extensively engaged in Africa, Russia has almost entirely abandoned the field to other foreign players during the past two decades.”

Besides other factors hindering Russia’s move to Africa, Maxim Matusevich, director of the Russian and East European Studies program at Seton Hall University in New Jersey, says it seems that there are few areas of mutual economic interest between the Russian Federation and sub-Saharan African states. Ironically, many African nations suffer from the same affliction that has negatively impacted western investments in Russia: unfriendly investment climate/s/, unpredictable and capricious regimes, rapacious elites and a lack of rule of law.

Notwithstanding some of the pessimistic and critical positions of experts, a number of foreign players have admirable success stories. Brazil, India and China are very visible on the continent, but can they also have a meaningful unified BRICS foreign policy in Africa? Foreign players have their individual interests and varying investment directions.

Some experts still argue that it is never too late for Russia to enter the business game but what it requires is to move away from old Soviet stereotypes, prioritize corporate projects and adopt a new policy strategy for the continent – a market of some 350 million middle-class Africans.

Of course, Russia has to risk by investing and recognizing the importance of cooperation on key potential investment issues and to work closely with African leaders on the challenges and opportunities on the continent, Andy Kwawukume, an independent policy expert told me from London, noting that Russians have been trying to re-stage a come-back over the past few years, which was a commendable step forward.

Kwawukume, a Norwagian trained graduate, pointed out that “there is enough room and gaps in Africa for Russians to fill too, in a meaningful way, which could benefit all parties involved. The poor and low level of infrastructural development in Africa constitutes a huge business for Russian construction companies to step in. Energy is another sector Russians could help in developing.”

Over the past few years, business summits have become increasingly common and interactive platform for dialoguing, that Russian officials should consider using its Russian trained African graduates as bridges to stimulate business cooperation. Really, what Russia needs is a multi-layered agenda for Africa.

Institutional Approach

Russia and others in the BRICS would like to see larger power centers emerge to offer an alternative to that Western dominated construct, and that is reasonable enough. “As a unified BRICS approach to Africa, especially terms of investment and business? I doubt it. I suspect the only unified stance would be one supporting non-interference in its domestic affairs. This means that individual BRICS member states would prefer to identify and negotiate for business taking into cognisance of its own interests,” according to Charles Robertson, chief economist at Renaissance Capital, an investment company.

Dr. Igho Natufe, a research professor at the Center for Studies of Russian-African Relations and Foreign Policy of African Countries, whose book “Russian Foreign Policy in Search of Lost Influence” published recently, explained that for foreign players or investors, for example China or India, there must be a clear understanding regarding the scope of such a cooperation. Until then, there would be more competition than cooperation among these potential foreign investors for development infrastructure projects and business spheres in Africa.

“Even between China and South Africa, both members of BRICS, we have observed fierce competition on consumer goods market in South Africa. It is doubtful if Russia is able to compete with China or India in Africa, given Russia’s ill-defined strategy on business relations with Africa and its current economic changes,” Natufe told me in an interview comment by email.

Arguably, he pointed out that, China has established the benchmark on how to construct business relations in Africa. The annual China-Africa summit at the heads of state level is unrivalled among member-states of BRICS. This is demonstrated by the frequent business and political meetings between Chinese leaders and their African counterparts. No other member of BRICS, including Russia, has been able to replicate China’s institutional structures in dealing with Africa. In fact, it can be argued that China gives BRICS a level of respectability in Africa.

Ojijo Al Pascal, an Ugandan lawyer and business consultant based in Dar es Salaam, Tanzania in East Africa suggested that “Russia needs to have its own projects, in fact, mega or corporate projects. And it should have them in strategic areas, and strategically.” Russia, in essence, could use it’s history of electrifying the Soviet rural areas to help Africa. And it could promote the establishment of manufacturing hubs, mega projects, for its technologies and mutually beneficial spheres cooperating with other countries in Africa.

Al Pascal says that India is already in Africa, so is China. And South Africa is in car manufacturing industry, energy, agriculture and telecommunications. He also says that Russia needs to go alone as a new frontier for its ideological show of might against the West and European Union. Vladimir Putin needs to visit Africa, and engage the African youth and business community, like U.S. President Barack Obama and a few other leaders have done during the past few years.

Role of Financial Institutions

Russian financial institutions have shown high interest in helping to raise the economic and business profiles both ways, Russian business in Africa and African business in Russia. For example, Eximbank of Russia has expressed its readiness to take advantage of huge opportunities and existing growth potential in both regions and is always open for a dialogue and discussion of projects of various degree of complexity.

Dmitry Golovanov, chairman of the Management Board of Eximbank of Russia, advocates for an increased partnership between Russia and African countries, reaffirms the desire to continue developing business dialogue with interested companies in efforts to pursue active involvement in international programmes and projects for Africa.

Besides, the bank is ready for joint implementation of projects in the area of infrastructural development and that will positively influence development of contracts between Russian and African companies.

In a nutshell, nearly all the experts interviewed for this article have unreservedly acknowledged that most African governments, in recent years, have continously been introducing adequate measures, including legislation, healthy for investment and business. Information on all these are available, in any form, from government network sources.

In addition, they explained that many foreign countries, notably, the United States, European Union members, China, India and Japan, have effectively used their institutional structures, have regularly made financial commitments and have adopted strategies in pursuit of their key economic policy goals and interests in Africa. Thus, to cooperate or compete depends on the choice of individual external country looking to the next frontier to pursue business opportunities and invest in infrastructure development across Africa.

MD Africa Editor Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

Africa

Scaling Up Development Could Help Southern African leaders to Defeat Frequent Miltant Attacks

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Terrorism

Leaders of the Southern African Development Community (SADC) are now considering, without foreign interference, tackling frequent insurgency devastating regional development, causing havoc to human habitation and threatening security in southern Africa. This collective decision came out after the Extraordinary Double Troika meeting on 8th April in Maputo, Mozambique.

The violence unleashed more than three years ago in Cabo Delgado province took a new escalation on March 24 when armed groups attacked the town of Palma. The attacks caused dozens of deaths and forced thousands of Palma residents to flee, worsening a humanitarian crisis that has affected some 700,000 people in the province, according several reports.

Many international organizations and foreign countries have responded with humanitarian support and with financial aid aimed at alleviating situation, specifically in Mozambique and generally in southern Africa.

For example, the European Union (EU) pledged to send almost €7.9 million in response to the humanitarian crisis caused by terrorism in northern Mozambique, part of a package totaling €24.5 million for the entire southern Africa and Indian Ocean region. EU humanitarian aid to Mozambique “seeks to provide a response to the humanitarian consequences of the conflict in northern Mozambique, where €7.86 million of EU funding will be directed,” a statement from the European Commission details.

Beside horrific attacks, drought is also currently affecting Angola, Eswatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Zambia and Zimbabwe. For instance, the EU will provide assistance to address a severe food and nutrition crisis in Madagascar. A further €6.00 million for helping children across the whole region gain access to education, and €8.00 million to improve the region’s disaster preparedness.

Now Southern African leaders are looking at pulling their resources together to improve the deteriorating security situation, supporting vulnerable displaced and affected people with shelter, food, protection and access to healthcare, especially in northern Mozambique’s Cabo Delgado province, and further widely in southern Africa.

As a first step, SADC has called for cooperation in cross-border surveillance as essential to stem the flow of foreign fighters fomenting terrorism in Cabo Delgado, and further warning the spread of violence throughout southern Africa. Among other measures, SADC suggested that southern African police and judicial systems must consistently work to combat trafficking and money laundering that funds terrorism.

Despite these collective measures, there are still a few more questions as to whether SADC could, in practical terms, control frequent violent extremist attacks using available resources in the southern Africa.

SADC, among others, mandates for enforcing collective security in the region. While the presidents of Botswana, Malawi, Mozambique, South Africa, Tanzania and Zimbabwe have called for “an immediate technical deployment” to Mozambique ahead of another high-level meeting at the end of April, Mozambique has so far been unreceptive, according reports.

There have been various suggestions from experts. “What we have here is a human rights and humanitarian crisis that has left hundreds of thousands displaced, insecure and unable to return to their homes because of the attacks that have been ongoing,” said Dewa Mavhinga, the Southern Africa director for Human Rights Watch. “So, the lack of security then spills over to affect everything else, including in terms of stability and economic programs that might be taking place in Cabo Delgado.

Historian Yussuf Adam, a retired professor at Maputo’s Eduardo Mondlane University, told VOA the problems dated back way beyond the start of the insurgency in 2017. He attributed to sharp disparity in development in the region.

He believes that Mozambique’s government, most importantly, has to tackle systemic poverty and inequality, in addition to resorting to a military solution. “There is no military solution. People have to be heard, and things have to be negotiated, and also people’s right to land,” he said. “People have to benefit from whatever it is will come out, is coming out, from this mining, oil, petrol and gas operations. That’s something which has to be seen and done.”

Mavhinga says, the government needs to take responsibility for its own policy failures. While militants have committed grievous acts – including rapes and beheadings – rights groups have also documented abuses by Mozambican security forces, including torture and extrajudicial killings.

South African lawyer and scholar Andre Thomashausen has also indicated that the Southern African Development Community (SADC) has its own internal differences. He anticipated that this SADC summit would not be able to take concrete measures, due to the division of opinions that exists within SADC, the lack of means and manpower resources could obstruct any positive results.

Thomashausen, however, said that the previous meeting did not express any solidarity, intervention and appeal to the African Union, regional and international community, explained further that SADC clearly indicated it prefers to deal with the crisis at the regional and without foreign interference. Therefore, the countries of the southern region “continue to bet on their own initiative, on their own commitment from region.”

The final communiqué from the summit condemned the terrorist attacks “in the strongest terms” and declared that “such heinous attacks cannot be allowed to continue without a proportionate regional response” but it did not suggest what such a regional response might consist of.

It further expressed “SADC’s full solidarity with the government and people of Mozambique” and reaffirmed “SADC’s continued commitment to contribute towards the efforts to bring about lasting peace and security, as well as reconciliation and development in the Republic of Mozambique.”

The summit ordered “an immediate technical deployment” to Mozambique, and the convening of an Extraordinary Meeting of the Ministerial Committee of the Organ by 28 April 2021 that will report to the Extraordinary Organ Troika summit on 29 April 2021.

SADC, an organization of 16 member states established in 1980, has as its mission to promote sustainable and equitable economic growth and socio-economic development through efficient, productive systems, deeper cooperation and integration, good governance and durable peace and security; so that the region emerges as a competitive and effective player in international relations and the world economy.

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Africa

SADC Summit Ends With Promises of More Meetings

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The Southern African Development Community (SADC) held an Extraordinary Double Troika meeting on 8th April in Maputo to deliberate on measures on addressing terrorism and its related impact on the current development specifically in the Mozambique and generally in southern Africa. The Cabo Delgado crisis started in 2017 with insurgents taking control of parts of northern Mozambique.

One of the two troikas consists of the current, incoming and outgoing chairs of SADC (namely Mozambique, Malawi and Tanzania), while the second is formed by the current, incoming and outgoing chairs of the SADC organ for politics, defence and security cooperation (Botswana, South Africa and Zimbabwe).

South African president Cyril Ramaphosa and the ministers of international relations, defence and state security attended the meeting. It was also attended by Mozambique, Botswana, Malawi Zimbabwe and Tanzania.

The summit was called in the wake of the terrorist attack of 24 March against the town of Palma in the northern Mozambican province of Cabo Delgado, but the leaders did not pledge any immediate practical support for Mozambique.

SADC Troika heads however said the acts of terrorism perpetrated against innocent civilians in Cabo Delgado, Mozambique, could not be allowed to continue without a proportionate regional response and reported that 12 decapitated bodies have been found behind a hotel in the region.

Mozambican President Filipe Nyusi has called for cooperation in cross-border surveillance as essential to stem the flow of foreign fighters fomenting terrorism in Cabo Delgado, warning of the spread of violence throughout Southern Africa.

Among the measures that the SADC countries should implement to combat terrorism is strengthening border control between Southern African countries, he said, and further added that Southern African police and judicial systems must consistently work to combat trafficking and money laundering that funds terrorism.

Nyusi stressed that the organization should implement practical acts to combat this scourge of terrorism to prevent its expansion and destabilization of the region, and warned of the risk that the actions of armed groups with a jihadist connotation could hinder regional integration.

According official reports, SADC fends off United States / European Union anti-terror intervention in Cabo Delgado. It further said no to another Mali / Somalia / Libya / Syria disaster on the African continent, adding that the global Anti-Terror lobbies are frustrated.

Deeply concerned about the continued terrorist attacks in Cabo Delgado, especially for the lives and welfare of the residents who continue to suffer from the atrocious, brutal and indiscriminate assaults, the leaders decided at their meeting to deploy a technical mission to Mozambique. It’s not clear what action the region will take but the deployed technical mission will report back to heads of state by 29 April.

The final communiqué from the summit condemned the terrorist attacks “in the strongest terms” and declared that “such heinous attacks cannot be allowed to continue without a proportionate regional response” but it did not suggest what such a regional response might consist of.

The Summit expressed “SADC’s full solidarity with the government and people of Mozambique” and reaffirmed “SADC’s continued commitment to contribute towards the efforts to bring about lasting peace and security, as well as reconciliation and development in the Republic of Mozambique.”

The summit ordered “an immediate technical deployment” to Mozambique, and the convening of an Extraordinary Meeting of the Ministerial Committee of the Organ by 28 April 2021 that will report to the Extraordinary Organ Troika summit on 29 April 2021.

The extremely brief communiqué mentioned no other specific measures.

The violence unleashed more than three years ago in Cabo Delgado province took a new escalation about a fortnight ago when armed groups attacked the town of Palma, which is about six kilometres from the multi-million dollar natural gas, according to United Nations data.

The attacks caused dozens of deaths and forced thousands of Palma residents to flee, worsening a humanitarian crisis that has affected some 700,000 people in the province since the conflicts data. Several countries have offered Maputo military support on the ground to combat these insurgents, but so far there has been no openness, although reports and testimonies are pointing to security companies and mercenaries in the area.

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Africa

African agriculture is ready for a digital revolution

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Authors: Akinwumi Adesina and Patrick Verkooijen*

After a dark 2020, a new year has brought new hope. In Africa, where up to 40 million more people were driven into extreme poverty and the continent experienced its first recession in 25 years, a brighter future beckons as the economy is forecast to return to growth this year.

Africa now has an opportunity to reset its economic compass. To build back not just better, but greener. Particularly as the next crisis—climate change—is already upon us.

Africa’s food systems must be made more resilient to future shocks such as floods, droughts, and disease. Urgent and sustainable increases in food production are needed to reduce reliance on food imports and reduce poverty, and this is where digital services come into play.

With mobile phone ownership in Sub-Saharan Africa alone expected to reach half a billion this year, digital services offered via text messaging can reach even the most remote village. And at least one-fifth of these phones also have smart features, meaning they can connect to the internet.

We can already see how digital services drive prosperity locally and nationally. In Uganda, SMS services that promote market price awareness have lifted the price farmers receive for bananas by 36 percent, beans by 16.5 percent, maize by 17 percent, and coffee by 19 percent. In Ghana, services that cut out the middleman have lifted the price for maize by 10 percent and groundnuts by 7 percent.

But digital services don’t just raise farmgate prices, they are the gateway to farm loans, crop insurance, and greater economic security, which in turn enables farmers to increase their resilience to climate change—by experimenting with new, drought-resistant crops, for example, or innovative farming methods.

Text messages with weather reports help farmers make better decisions about when and what to plant, and when to harvest.

In Niger, a phone-based education program has improved crop diversity, with more farmers likely to grow the cash crop okra, while an advisory service in Ethiopia helped increase wheat production from one ton to three tons per hectare.

The data footprints phone users create can also be analyzed to help assess risk when it comes to offering loans, making credit cheaper and more accessible.

Phones and digital services also speed up the spread of information through social networks, helping farmers learn about new drought-resistant crops or services that can increase productivity. Free-to-use mobile phone-based app WeFarm, for example, has already helped more than 2.4 million farmers find certified suppliers of quality seeds at fair prices. They can also connect farmers to internet-based services.

Examples of digital innovation abound, sometimes across borders. In Ghana, Kenya, and Nigeria, equipment-sharing platform Hello Tractor is helping farmers rent machinery by the day or even hour, while in Ethiopia, AfriScout, run by the non-government organization Project Concern International with the World Food Programme and the Ministry for Agriculture, provides satellite images of water supplies and crops every 10 days so problems can be spotted quickly to aid remedial action.

Transforming food systems digitally has demonstrably excellent results: the African Development Bank, which has allocated over half of its climate financing to adaptation since 2019, has already helped 19 million farmers in 27 countries to lift yields by an average 60 percent through applying digital technology, for example.

This is why the Global Center on Adaptation and the African Development Bank have launched the Africa Adaptation Acceleration Program (AAAP) to mobilize $25 billion to scale up and accelerate innovative climate-change adaptation across Africa.

Once developed, the digital nature of these services often makes such projects easy to replicate elsewhere and scale, even across large rural areas with little existing infrastructure.

Further, adaptation projects are proven to be highly cost-effective, often delivering value many times the original investment and so helping African economies grow faster and create many more much-needed jobs.

This makes it imperative that the global resolve to rebuild economies in the wake of Covid-19 is harnessed in the most effective way. We must not simply replicate the mistakes of the past. We must build back stronger, with a more resilient and climate-smart focus.

Funding and promoting disruptive business models in which digital technologies are embedded to increase productivity without using more land or more water will create a triple win: increased production, a more resilient climate and more empowered farmers.

We have the means and the technical capability to put Africa well on the way to achieving food self-sufficiency and greater climate resilience. In doing so, we can help millions move out of food poverty. We must not squander this opportunity to create truly historic and lasting change.

AfDB

*Patrick Verkooijen is CEO of the Global Center on Adaptation.

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