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Formal trade in Africa can improve region, prospects for women

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] S [/yt_dropcap]implifying the requirements for a business license, offering incentives to tax payers, and tackling official corruption are among the recommendations by the United Nations agricultural organization to cut informal trade among African countries and boost economic prosperity, particularly for women.

“Informal cross-border trading, in which transactions are not compliant with local tax and other rules, accounts for a large share – between 20 and a hefty 70 per cent– of employment in sub-Saharan Africa,” according to the UN Food and Agricultural Organization (FAO).

“Putting it on a regular footing can lift sustainable prosperity and markedly improve prospects for women,” FAO said in a new publication, Formalization of informal trade in Africa.

Informal cross-border trade, often agricultural, is the result of poor access to government offices, a lack of administrative skills and improper understanding of import and custom-tax laws.

One of the main groups that would be affected by formalization is women, who constitute the largest share of informal traders – about 70 per cent in Southern Africa and more than half in other parts, according to the report.

“Facilitating formalization is the only viable policy option for Africa’s transformation agenda to realize its objectives,” said Suffyan Koroma, FAO senior economist and lead author of the report.

The publication was presented today at a conference in Kigali, Rwanda. The event is part of ongoing FAO-supported work in the country, along with UN Women and other development partners, aimed at enabling women to benefit more from agri-food chains, a project geared to allowing women small traders access useful information as well as start-up capital.

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Zimbabwe awaits Russian investors

Kester Kenn Klomegah

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Like many African countries, Zimbabwe’s economy needs sustainable resuscitation. On his mid-January official working visit to Moscow, President Emmerson Mnangagwa told Sputnik News Agency (SNA) in an interview: “We have always had cooperation in the field of defence and security with Russia. This we are not abandoning. At the moment, we don’t have much economic muscle to buy such things which we would want to buy from the Russian Federation.”

“But down the line, as Zimbabwe becomes stronger in terms of its economic muscle, we should be able to buy the type of military hardware, which we know the Russian Federation has and is the state-of-the-art type of equipment that they have, we are not in a hurry,” Mnangagwa added.

By his words, President Emmerson Mnangagwa set the tone and precedence by adhering to the principle “African problems, African solutions” formulated by African themselves which Russia supports.

With many African elite, at least, during the past decade, Foreign Minister Sergey Lavrov has held in-depth discussions on the current situation in Africa and always point to the possibility of continuing to promote effective bilateral cooperation in many spheres and to work together towards fully using existing potentials. He always reminds that Moscow firmly supports the principle formulated by the African countries, “African solutions to African problems.”

According to many experts, most often talked about economic diplomacy. What is abundantly clear is how to stimulate African governments into exploring investment opportunities in Russia and Russian investors into Africa within some framework of mutual-cooperation.

Professor Vladimir Shubin, the Deputy Director of the Institute for African Studies, told me several years ago that “African leaders have to pay high attention to and take significant steps in promoting their achievements and highlighting their most development needs.”

In an acknowledgement, he said Africa has a great potential for bilateral relationships with Russia. But the relations in many spheres, especially in economic cooperation, are lagging behind.

Shubin, however, pointed to the truth that “Africans have to acknowledge the fact that the world has progressively changed and they must be seen changing with the similar positive pace. It’s about time Africans have to take development issues seriously and work progressively towards establishing good governance and drastically seek improvement in the welfare for its large impoverished population.”

President Vladimir Putin pledges to help Zimbabwean counterpart President Emmerson Mnangagwa “to stabilize the political situation” by investing in the country. Zimbabwe has been looking for foreign investment in installing its energy, building infrastructure, modernizing agriculture and industry – foreign investors who could offer the necessary boost to employment creating sectors.

Quite recently, Vyacheslav Volodin, the Chairman of the State Duma, told an instant meeting held with the Ambassadors of African countries in the Russian Federation, that Russia would take adequate steps to deliver on pledges and promises with Africa countries. “We propose to move from intentions to concrete steps,” he said.

Zimbabwe’s Ambassador to Russia, Major General (rtd) Nicholas Mike Sango, told me in an interview discussins that, “For a long time, Russia’s foreign policy on Africa has failed to pronounce itself in practical terms as evidenced by the countable forays into Africa by Russian officials. The Russian Federation has the capacity and ability to assist Africa overcome these challenges leveraging on Africa’s vast resources.”

Mike Sango further expressed his views as follows: “Africa’s expectation is that Russia, while largely in the extractive industry, will steadily transfer technologies for local processing of raw materials as a catalyst for Africa’s development.”

He said that the country was open to investment in energy and transport, including the construction of railways and highways, and was looking to attract and secure foreign investment and cooperation to transform the country’s economy.

Zimbabwe’s key priorities summarized as follows (in order of priority):

Energy: For industry and commerce to thrive there has to be sufficient power. Presently, Zimbabwe has a power deficit of 750 MW. The most reliable source is the 750 MW Hydro power plant which has been affected by low water levels due to two years of drought. The country is relying on power imports.

Agriculture Support: Agriculture is the economic mainstay and provides 15% of GDP. Water harnessing through dam construction, irrigation mechanization, and agricultural machinery are key areas.

Infrastructure Development: Although the country has a fairly well developed infrastructure, the road and rail infrastructure needs refurbishment and expansion to take trade volumes for the country as well as its neighbours to the north.

Mining: Zimbabwe is endowed with abundant unexploited resources.

Manufacturing: Zimbabwe’s manufacturing sector has been hit hard by illegal economic sanctions. Most industries have outdated and expensive to run machinery. They are in dire need of retooling, refurbishment and funding.

Tourism: Zimbabwe hosts one of the wonders of the world, the Victoria Falls. Investment in infrastructure development in the hotels would complement the opening by larger airports to accommodate larger body aircrafts.

Zimbabwe, a landlocked country in southern Africa, shares a 200-kilometre border on the south with South Africa, bounded on the southwest and west by Botswana, on the north by Zambia and on the northeast and east by Mozambique. Zimbabwe is a member of Southern African Development Community (SADC).

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The Endless Debate about Russia’s Policy in Africa

Kester Kenn Klomegah

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Early March 2018, Foreign Affairs Minister Sergey Lavrov said in an interview with Hommes d’Afrique magazine that “our African friends note the need for Russia’s active presence in the region, and more frequently express interest in holding a Russia-African summit. Such a meeting would undoubtedly help deepen our cooperation on the full range of issues.”

He frankly acknowledged that Russia’s economic cooperation was not as far advanced as political ties, but would do well to raise trade and economic ties to a high level of political cooperation by promoting joint activities and to make broader use of the huge potential that exists in Russian-African trade and investment cooperation.

“Definitely, time is needed to solve all those issues,” said Minister Sergey Lavrov, and suggested that the Russia-Africa business dialogue could start with experts’ meetings within the framework of the St Petersburg Economic Forum or the Valdai forum in Russia.

Many African political leaders (presidents, prime ministers and ministers) point to the fact that Africa is not looking for aid, but rather genuine investment and business, high-level talks with top Russian officials have been humble, not very critical, “based on the principles of equality and mutual respect” as a required approach in diplomacy.

During the past decade, at least, from the time of African Union Commission Chairperson Jean Ping to Nkosazana Clarice Dlamini-Zuma and now Moussa Faki Mahamat, all have passionately raised the issue of Russia’s active involvement in economic sectors especially energy, infrastructure, agriculture and industry in Africa.

The fact still remains that negative perceptions deeply persistent among Africans, (political and business elite, middle class and the public), towards Russia. For the two past decades, due to Russia’s low enthusiasm, lack of coordinated comprehensive mechanism and slowness in delivering on skyline investment pledges have been identified as the key factors affecting effective cooperation between Russia and Africa.

London based Business Research and Consultancy firm published a new report about global players set to continue broadening economic and business engagement across Africa. This publication becomes largely important as Russia with its recognizable global status and among BRICS (Brazil, Russia, India, China and South Africa) dominated headlines that it has played less visible role in sub-Saharan Africa after Soviet’s collapse.

The latest description of Africa, which consists of 54 states, to many experts and investors, is the last frontier. It is the last frontier because it has 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.

Russia craving to be a powerhouse is comparatively missing out! The following vividly illustrates that point under discussion:

In an exclusive interview, the Executive Secretary of the Southern African Development Community, Stergomena Lawrence Tax, said Russia has a long history of bilateral engagements with the Southern African countries.

“The most recent visit of the Russian Foreign Minister H.E. Sergey Lavrov to the Republics of Angola, Ethiopia, Namibia and Zimbabwe, (as we understand it) was largely focused on signing of economic cooperation agreements to attract Russian investments in key areas such as mining, aviation and energy sectors, as well as fostering military technical cooperation,” she added.

In his statement, Minister Lavrov noted that Russia together with Africa wanted to elevate trade, economic and investment relations to a level that would meet political and trust-based relations. Like most of the developing countries, Southern African countries have, over the years, largely relied on multilateral and regional development financial institutions to fund their development projects.

“In this regard, SADC welcomes investors from all over the world. In reality, Russia has not been that visible in the region as compared to China, India or Brazil. But, it is encouraging that, of recent, Russia has positioned herself to be a major partner with Southern Africa and being part of the BRICS promotes her engagement with the region, particularly in investment in minerals, aviation, defense and energy sectors,” underlined Stergomena Lawrence Tax.

In March 2018, Russian Foreign Minister, Sergey Lavrov, visited the Southern Africa region where he held talks with the Presidents of Angola, Namibia, Mozambique and Zimbabwe.

In another interview with (H.E.) Ambassador Major General (rtd) Nicholas Mike Sango who willingly shared his objective views and opinions on a few current issues connecting Russia and Africa. He says there is growing realization that Africa is an important partner in the “emerging and sustainable polycentric architecture of the world order” as Foreign Minister Sergey Lavrov has aptly asserted.

“For a long time, Russia’s foreign policy on Africa has failed to pronounce itself in practical terms as evidenced by the countable forays into Africa by Russian officials. Africa desires economic upliftment, human security in the form of education, health, shelter as well as security from transnational terrorism among many challenges afflicting Africa. The Russian Federation has the capacity and ability to assist Africa overcome these challenges leveraging on Africa’s vast resources,” Ambassador Mike Sango told me during the discussion.

“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.”

Kelvin Dewey Stubborn, South African based Senior Analyst on BRICS and African policy, argues that “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 the question is if these countries can have multilateral agreements and 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, according to him.

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, Professor Andy Kwawukume, wrote in an interview comments from London. He explicitly noted that Russians have been trying to re-stage a comeback over the past few years that was a commendable step forward.

Nearly a decade ago, Kwawukume, a Norwegian trained African graduate, underlined the fact that “there is enough room and gaps in Africa for Russian investors 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.”

Kwawukume explained that 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.

In a similar argument, Dr Ojijo Al Pascal, Ugandan lawyer and business consultant based in Dar es Salaam, Tanzania in East Africa, suggested that “Russia needs to have its own mega or corporate projects. And it should have them in strategic economic areas.”

Russia, in essence, could use its history of electrifying the Soviet rural areas to help Africa. It could promote the establishment of manufacturing hubs and mega projects, promote its technologies in mutually beneficial spheres while cooperating with individual countries in Africa.

Nearly all the experts mentioned in this article have 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.

There are chances to turn the business tide only if Russians can come with a different mix of economic incentives, without doubt, they will be taking off from the track where the former USSR left after the collapse of the Soviet era. The time has come to make meaningful efforts to implement tons of agreements already signed on bilateral basis with Africa countries.

Professor Gerrit Olivier at the Department of Political Sciences, University of Pretoria, and former South African Ambassador to the Russian Federation, wrote me in email discussion, already five years ago, that important though is the fact that the Soviet Union never tried to colonize Africa. Soviet influence in Africa disappeared almost like a mirage with the collapse of the Soviet system in 1991. And today, Russian influence in Africa, despite efforts towards resuscitation, remains marginal.

While, given its global status, it ought to be active in Africa as Western Europe, the European Union, America and China are, it is all but absent, playing a negligible role, according to the views of the retired diplomat.

“Russia, of course, is not satisfied with this state of affairs. At present ‘paper diplomacy’ dominates its approach: plethora of agreements are been entered into with South Africa and various other states in Africa, official visits from Moscow proliferate apace, but the outcomes remain hardly discernible. Be that as it may, the Kremlin has revived its interest in the African continent and it will be realistic to expect that the spade work it is putting in now will at some stage show more tangible results,” Professor Olivier wrote from Pretoria in South Africa.

Largely due to Africa’s growing reputation as a region for commerce, over the past few years China, India, Japan, and the European Union all have hosted regional meetings similar to the U.S.-Africa Leaders’ Summit.

According to the Business Research and Consultancy firm’s survey conducted between January 2016 and June 2018, it has become significant that the existing Memorandum of Understanding (MoUs) Russia has signed with African countries and together with various economic agreements reached by the joint Business Councils could provide solid framework for raising vigorously its economic influence to an appreciable levels in Africa.

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Russia’s Response Falls Behind Africa’s Expectations

Kester Kenn Klomegah

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Zimbabwe’s Ambassador to Russia, Major General (rtd) Nicholas Mike Sango, was one of the African envoys to attend a recent meeting with Russian legislators to exchange views on common problems, common issues for the African continent and the Russian Federation. After the State Duma meeting, Kester Kenn Klomegah fixed this interview with (H.E.) Ambassador Sango who willingly shared his views on a few current issues connecting Russia and Africa.

Aside from the inter-parliamentary conference, what important issues came up at the meeting with Russian legislators held recently in the State Duma?

The meeting of the Chairman of the State Duma (lower chamber of Russian legislators) and African Ambassadors in October was a welcome first initiative towards the convening of the Russia-Africa Parliamentary Forum. This initiative was informed by the recognition that despite the geographical locations of the two institutions, the disparity in the level of development, the diversity of cultures and aspirations of the peoples of the two regions, there is growing realization that Africa is an important partner in the “emerging and sustainable polycentric architecture of the world order” as Foreign Minister Sergey Lavrov has aptly asserted. In fact, Africa’s critical mass can only be ignored at great risk therefore.

State Duma proposes to move away from intentions to concrete steps. Does it imply that Russia has unfulfilled promises and pledges in Africa? What are your objective views about this?

For a long time, Russia’s foreign policy on Africa has failed to pronounce itself in practical terms as evidenced by the countable forays into Africa by Russian officials. The Russia-Africa Parliamentary Forum can only achieve the desired objectives if anchored on a solid policy framework.

What would African leaders prefer: the development of political relations or expansion of genuine economic partnership?

While Russia and Africa have common positions on the global platform, the need to recognize and appreciate the aspirations of the common man cannot be overstated. Africa desires economic upliftment, human security in the form of education, health, shelter as well as security from transnational terrorism among many challenges afflicting Africa. The Russian Federation has the capacity and ability to assist Africa overcome these challenges leveraging on Africa’s vast resources.

Despite the historical social and political relations, the Russian Federation has shied away from economic cooperation with Africa, making forays into the few countries that she has engaged in the last few years. African leaders hold Russia in high esteem as evidenced by the large number of African embassies in Moscow. Russia has no colonial legacy in Africa.

Unfortunately, the former colonial masters continue to exploit African resources because, despite the “Look East Policy” adopted by Africa, Russia has not responded in the manner expected by Africa, as has China, India and South Korea, to name a few. Africa’s expectation is that Russia, while largely in the extractive industry, will steadily transfer technologies for local processing of raw materials as a catalyst for Africa’s development.

At least, over the past decade Russia has signed various bilateral agreements and MoUs nearly with all African countries. Do you think there have been challenges in implementing these agreements?

The Russian Federation has signed bilateral agreements with a number of African countries. These agreements, of necessity require strong government support anchored on a social policy that promotes a two-way beneficiation. African products other than from a few north African countries and South Africa find their way into the Russian market. As a result, trade figures between Russia and Africa are anchored on selective countries even though a number of bilateral agreements with other African countries are in place.

State Duma talk about Russian media presence in Africa. What steps can we take to raise African media representation in the Russian Federation?

The Sochi International Olympics and the FIFA international football extravaganza surprised many Africans on the level of development of the Federation. There is a dearth of information about the country. Russia-Africa issues are reported by third parties and often not in good light. Is this not a moment that Russia has coverage on Africa by being permanently present in the continent? Even the strongest foreign policies, if not sold out by the media, will definitely not succeed.

Indeed, Africa’s media should equally find space to operate in Russia. Because of limited resources, Russia should equally make it easier for African journalists to operate on her territory. The Russia-Africa Parliamentary Forum as a precursor to the Russia-Africa Forum should lay the necessary foundation for deeper and holistic Russia-Africa political, cultural and economic cooperation for mutual benefit of the peoples of the two friendly institutions.

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