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Russia reappears in Africa

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Relations between Russia and Africa are long-standing and have always been characterised by their versatility. They ranged from the humanitarian aid of Tsar Nicholas II to the Ethiopian Empire in its struggle against Italy (late 19th century) to support for the liberation of Angola, Mozambique, Guinea-Bissau, Cape Verde and São Tomé and Príncipe from Portugal (late 1960s-1970s).

In the second half of the 20th century, Soviet engineers and specialists took an active part in the implementation of a number of large industrial projects in many African countries. Power plants (Aswan Dam), metallurgical, mining plants and processing plants, oil refineries, companies manufacturing machinery and other important items of the national economy were built.

How does Russia intend to develop economic cooperation with African countries and what course can this partnership follow in the near future?

Today, Africa is the world leader in terms of consumption growth. Agriculture, the chemical industry and agro-technologies, oil refining and extractive industries, energy and nuclear technologies for peaceful purposes are developing rapidly in Africa. Most countries are interested in infrastructure development, and the demand for cars and special equipment is growing. Russian business has something to offer in each of these sectors.

A continent with a population of 1.4 billion people is comparable to China. In 15-20 years’ time, Africa will determine the world’s demographic framework and influence the scale of global consumer demand significantly.

Russia, which is significantly limited and constrained in the Western direction of foreign economic activity as a result of sanctions, is looking for new markets for its products, mainly for exports. It is obvious that it will be practically impossible for Russia to solve these problems without Africa.

The Russian Foreign Ministry has noted that Africa remains one of the priorities of Russian foreign policy. In the near future, it is certainly possible to ensure the gradual growth of trade and economic ties between Russia and the African countries. This means increasing the number of mutually beneficial joint projects in the fields of energy, agriculture, subsoil use, infrastructure development, high technology and staff training.

At the same time, it should be recalled that the 54 African countries account for 27.98% of the seats in the United Nations, and the political support of such a large number of countries is also extremely important for Russia.

Russia has traditionally developed and continues to develop relations with the Maghreb and Southern African countries. Four North African countries, namely Egypt, Algeria, Morocco and Tunisia, as well as the Republic of South Africa account for over 70% of all trade with Africa. If we add Sudan and Nigeria, Russian trade with Africa reaches 85%.

Moreover, many countries in the sub-Saharan region are developing rapidly and record very high economic growth rates. They also have natural and economic resources that could be of interest to Russia.

One of the main tasks of Russian institutions in this regard is to catalyse trade with black African countries: there are plans to open agencies or representative offices there, to which local entrepreneurs and citizens can turn if they are interested in economic contacts or dialogue with their Russian counterparts.

In 2019, Russia’s foreign trade turnover with African countries amounted to 16.8 billion U.S. dollars, and exports to African countries regarded machinery, equipment and vehicles, foodstuffs, agricultural commodities, and mineral products. The rest of trade consisted of metals, chemicals, rubber, timber, paper products and precious minerals.

Africa is still characterised by an extensive diamond resource base and prospects for new discoveries of rare metals, which explains Russia’s interest in potential development in this region.

Conversely, in 2019 food and agricultural commodities accounted for the majority of Russian imports (56.8%). At the same time, the majority of Russia’s trade with African countries in 2019 materialized due to mutual trade transactions with Egypt (37.2%), Algeria (20.2%), Morocco (7.6%), the Republic of South Africa (6.6%), Senegal (4.3%), Tunisia (3.9%), Nigeria (2.5%), Togo (2.4%), Sudan (1.6%) and the Ivory Coast (1.6%).

In January-September 2020, due to the spread of the coronavirus infection, Russian-African trade turnover decreased by 20.5% compared to the same period in 2019 and amounted to 8.9 billion dollars.

Today, Russia is ready to act as a partner for all African countries in a number of sectors. These include projects to supply the latest Russian equipment for metallurgical and mining companies, as well as the development of a transport and logistics system – including not only the supply of rolling stock for railways, aircraft and helicopters of various classes and purposes, but also control and safety systems for the respective transport lines. Russia is also interested in participating in the creation of energy infrastructure in African countries – oil, gas and generation capacities, including hydroelectric and nuclear power – as well as in ensuring food security, developing a healthcare system and supplying medicines.

Russia does not offer individual export contracts, but projects that include both the supply of products and their maintenance, as well as training for specialists, and possible technology transfer and partial localisation. This enables African countries to develop their expertise in a variety of industries.

Africa is currently one of the sales markets that attracts long-term investment for national companies. In recent years, African countries have made a huge leap forward in creating the conditions for developing trade and a favourable investment climate.

Promising areas and niches for Russian exporters to Africa are the supply of finished automotive equipment, as well as accessories and spare parts for machinery; the construction and modernisation of railway infrastructure, and the supply of oil refining equipment. At the same time, Russian agricultural machinery suppliers and major car manufacturers are already working in African markets.

Projects for the maintenance and modernisation of power plants, for oil production and transport, as well as for the arrangement of facilities for the chemical and mining industries in Africa have been developed successfully. An important role in exports is played by the supply of agricultural and food products. Projects in new directions, such as modern technology, ‘smart’ cities, education and health, are beginning to be proactively developed.

At present, key countries in the promotion of non-resource exports are Egypt, which accounts for over one third of Russian-African trade turnover, the Republic of South Africa, Zambia, Angola, Algeria, Nigeria and Kenya.

From a strategic perspective, African countries’ sustainable development will be associated, inter alia, with the full use of investment potential, attracting companies interested in implementing projects on their territory.

The quality of Russian companies’ products meets international standards. Therefore, many African leaders are interested in projects involving the construction of airports, hydroelectric power stations, schools and universities, as well as in the cultural field.

At the same time, not only Western European countries, the United States and China, but also India, Turkey, as well as the Persian Gulf States, Japan, the Republic of Korea, Israel and Brazil are showing increasing interest in developing relations with African countries. Hence these activities of the world’s major powers inevitably lead to a significant increase in competition in virtually each of these areas.

One of the biggest projects of the Russian State company Rosatom in Africa is the construction of the al-Dabaa nuclear power plant in Egypt. Rosatom State Atomiс Energy Corporation is a Russian state-owned nuclear energy company with over 360 firms.

Nevertheless, this is not the only area of interest for the company in the region. Rosatom, in particular, develops non-energy cooperation not only in the nuclear sector, but also offers various options for turnkey basic research, medical and radiological facilities.

One of these facilities is the Centre for Nuclear Science and Technology (CNST). Rosatom is already proactively involved in the project to build the CNST in Zambia. The Centre includes a research reactor, a multipurpose irradiation centre, a nuclear medicine centre and several laboratories – a modern platform for a wide range of scientific research and practical applications of nuclear technologies.

The company also sees potential in staff training and provides a number of scholarships and educational programmes. For the past five years there has been a State scholarship programme for students wishing to master nuclear and engineering specializations at Russia’s leading universities. Each year, at Rosatom’s request, quotas are allocated to representatives from African countries.

Moreover, digital technologies, artificial intelligence and cyber security – of which the Russians are masters – are rapidly developing in Africa. Africans are interested in Russian information technologies – first and foremost in the Russian government services, such as tax collection programmes, cloud technologies, and everything related to online payment systems.

Africa is showing particular interest in agricultural projects. In particular, African countries are increasing their cereal production and the demand for fertilisers is growing. Therefore, over the last five years the volume of fertiliser consumption in African countries has grown by 4-5% per year, while the world average is 1.5-2%. There are huge prospects for the African market – consumption of nitrogen and phosphorous fertilisers in the region is currently five to seven times lower than the world average, while potash consumption is nine to eleven times lower than the world average.

In the first nine months of 2020, despite the pandemic, the company’s fertiliser supplies exceeded last year’s indicators and reached 445,000 tonnes. Over the next five years, the possibility of increasing the supply of ecologically standard products to Africa is being considered – an important contribution to ensuring food security in Africa, which the continent had until the 1960s and then lost due to neo-colonialism,

With a gradual and systematic development of market potential, it is entirely possible for Russian companies to take leadership positions, redirecting volumes and priorities from more distant markets and also from other ones.

The first Russia-Africa Conference was held in Soči on October 23-24, 2019 and saw the participation of 54 African representatives with 43 Heads of State. At the Summit Putin emphasised that cooperation between the parties waslong standing and long-term -and military, we would add. The new support point for the Russian Navy is in Sudan – the Treaty of December 8, 2020, and the docking of the frigate Admiral Grigorovic on February 28, 2021 in Port Sudan.

Russia’s reappearance in Africa is taking place in full swing.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Africa

Hydro-projects in Africa: Interview with Vladislav Vasilyev

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As widely known, Russia plans to hold the second Russia-Africa summit in 2022, as a further step to make inroads into Africa – that comprises a diverse collection of countries, each with its own set of development setbacks and challenges. The political culture and investment climate are, in fact, diverse but are also important forces in determining the levels of the economy.

As it aims at raising its economic profile, Russia is strongly encouraging Russian business leaders to prioritize sustainable development-oriented projects as a practical step towards raising the living standard of millions of impoverished population in Africa.

For instance, JSC Institute Hydroproject promises to transfer its experience in advanced and innovative technologies, and efficient use of water resources, especially ways of managing and ensuring reliable hydro-energy supply. JSC Institute Hydroproject can further help in the accelerated social and economic development in Africa. 

In this interview, Vladislav Vasilyev, Head of International Projects Department at JSC Institute Hydroproject, discusses his company’s efforts directed at establishing hydro-projects in Africa, further touched on the state support for Russian business in Africa. Here are the interview excerpts:

– How important is African market for your company, JSC Institute JSC Institute Hydroproject?

JSC Institute Hydroproject has vast working experience in African countries wherein we have done designs of HPPs in Algeria, Angola, Ethiopia, Guinea, San Tome and Principe, Tunisia, Morocco, Ethiopia. We would like to separately emphasize about the masterpiece high class engineering of the Aswan dam on the Nile river in Egypt. JSC Institute Hydroproject management has deep knowledge of the African market.

– What are your expectations from African governments, industrialists and agribusiness directors in cooperating on products and services of your company?

African countries are among the fastest growing in the world. About one and half billion people live there, and that constitute approximately 20% of the world’s population. At the same time, there is a big demand in infrastructure development. Even the United Nations, forming the “Sustainable Development Goals” emphasizes the high development needs of the African region.

The African market is a big challenge in all areas of water use, from land reclamation to large and complex knowledge-intensive industries, not to mention the usual but much-needed electricity generation. In this regard, we see many opportunities for cooperation with governments, industrialists and in the huge agroindustry.

– Do you envisage any key problems and impediments to developing business, especially in the sphere of agriculture in African countries?

Difficulties and obstacles are possible – this is life. However, we can look at things differently, and see the obstacles as opportunities and incentives. For example, the lack of land reclamation networks makes it possible to build and develop a water delivery system that can become a link to strengthen the local neighboring countries and peoples.

The construction of a hydroelectric power station requires a channel with a large water pressure, which means the presence of a water basin, a reservoir. This will not only provide the local region with electricity, but also provide water. Here are a number of issues that are being resolved with the participation of the design and survey and research school of such a company as JSC Institute Hydroproject.

– How competitive do you see African market for Russian companies, generally, and for your company, specifically? From the previous experience, what challenges Russian companies and investors face in Africa?

There are several challenges, which are still in place for Russian engineering companies on African market. Russia is still not a member country of African Development Bank. AfDB announces many tenders, which are closed to companies from non-member countries. Still it is only a few African countries, who signed an agreement on the avoidance of double taxation with Russia.

– Business needs vital information, knowledge about the investment climate and so forth. Do you think there has been an information vacuum or gap between the two countries?

In my opinion we can talk about the rapprochement of the positions of Africa and Russia, the formation of new and strengthening of long-standing ties. This is explicitly noted, for instance, by Russian Foreign Minister Sergei Lavrov, and Head of the National Chamber of Commerce and Industry of Uganda, Olive Kigongo.

Joshua Setipa, Managing Director of the United Nations Technology Bank for the Least Developed Countries, says of the importance of high-tech companies: “It is important for us to continuously develop our partner network and establish cooperation with organizations that can help and support less developed countries with their technological and innovative potential. I am sure that working in Russia and, in particular, at the events of the Roscongress Foundation will help us to use the country’s opportunities for the benefit of others.” He said so at the recent Russia-Africa summit in Sochi.

– In your opinion, does the forthcoming second Russia-Africa summit planned for 2022 hold an opportunity for raising the level of investment and business engagement with Africa?

Russia-Africa summit is unique platform that is expected to bring together corporate business directors and potential investors from both regions – Russia and Africa. We can simply agree that investments are always possible, and Russia is highly interested in them. This is also a state and business interest. Such people and companies are also among our partners. 

According to the achievements of recent years – this is not only the First Joint Russia-Africa Summit, but also during many previous bilateral forums, it is important to say that cooperation in the business sphere is just gaining momentum.

Now there is a lot of work to be done, including a well-structured and well-coordinated policy for Russian business, restructuring foreign policy and supporting economic circles – with African politicians, business people and residents of African countries. It is necessary to cooperate between scientific, technical, humanitarian, information, and digital platforms, and ultimately to develop common approaches for the implementation of our upcoming joint projects.

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Nigeria- Ghana Trade War: Where to from here

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Several months after a series of bilateral talks between the Nigerian government and authorities in Ghana aimed toward addressing the nearly a decade-long controversy that led to the closure of Nigerian traders’ shops in Ghana, the problems have not been resolved. Hundreds of shops belonging to Nigerian traders are still under lock and key; while most of the owners are stranded. A number of them said they beg to feed, as many of them remain reluctant to return to Nigeria despite a window created by the Nigerian government to facilitate their safe return.

What has happened so far?

President Muhammadu Buhari stunned Nigeria’s neighbors when he unexpectedly closed the country’s land borders to goods trade, saying the time had come to crush contraband trade. The land borders with neighboring Benin, Cameroon, Chad, and Niger were closed to goods in August 2019, with partial openings and closings for people prompted by the coronavirus pandemic throughout 2020.

The center of the lingering controversy was a $1 million levy imposed on Nigerian traders and other foreign investors to pay Ghana Investment Promotion Centre (GIPC) before the shops would be opened. The conditions set by the Ghanaian authorities had triggered a debate in Nigeria and within the African sub-region, which many considered as a breach of ECOWAS’ trade protocols.

However, on 19 June 2020, armed men entered the compound of the Nigeria High Commission in Ghana, and destroyed buildings under construction. Nigeria’s foreign minister Geoffrey Onyeama described the vandalism as “outrageous and criminal” and urged the Ghanaian authorities to make sure that they protect Nigerian diplomatic buildings. Nigerian residents in Ghana held a demonstration calling for Nigerian government to take action. Although a piece posted on the Nigerian High Commission website in Ghana places responsibility on a businessperson who had previously claimed he owned the land where the building was being built, Nigerians living in Ghana still took to the streets to protest for their protection. The Ghanaian foreign ministry also promised that security had been “beefed up”.

Flashback on bilateral talks

The Nigerian Minister of Foreign Affairs, Geoffrey Onyeama, had last year summoned Ghana’s Chargé d’Affaires to Nigeria, Ms. Iva Denoo, with whom he discussed the closure of the Nigerian-owned shops in Accra with a view to addressing the problem. Onyeama described the action taken by the Ghanaian authorities as politically motivated. However, his Ghanaian counterpart, Shirley Ayorkor Botchwey, countered his allegation, insisting that the crackdown was on illegal foreign retail businesses in Ghana.

Botchwey, described in a tweet by Onyeama, tagging Ghana’s policy on retail business as a politically motivated move as ‘most unfortunate. She said the Ghanaian government did not target any particular nationality in the exercise. “Countries sometimes take tough decisions in order to enforce their laws, just as Nigeria took a decision to shut its borders to stop smuggling, despite its impact on ECOWAS member countries,” she had said.

Is Ghana innocent?

While it’s easier to quickly point a finger at Nigeria as the aggressor, given it’s the bigger country who opted to shut its borders, therefore creating a ripple effect in the smaller economies, Ghana also has laws that clash with ECOWAS protocol, which ensures the free movement of the community’s citizens, as well as free and fair trade. The 2013 Ghana Investment Promotion Centre Act (GIPC) is one such Act. It prioritizes the interests of Ghanaian traders and business owners by designating certain only its citizens, whereby foreigners wanting to set up shop in Ghana must have a minimum equity capital of $10,000, run enterprises. That alone limits the number of foreigners – particularly from the poorer surrounding West African countries – who can successfully work in Ghana.

Where to from here

While tariffs can result in individual ‘winners’, a full trade war, protectionism, and a reversal of decades of globalization would damage economies across the board, hitting emerging markets particularly hard. COVID-19 has arguably pushed many countries towards concentrating on themselves, as many economies have been negatively affected in an exceedingly shocking manner. Although few expect to see the kinds of tensions witnessed in the 1980s when Nigeria expelled two million undocumented West African migrants, half of whom were from Ghana.

Key takeaways

  • Nigeria border closure weakened trade across West Africa
  • A full trade war and globalization reversal will benefit nobody
  • Nigerian traders have suffered the most; Ghanaians also faces pain
  • Traders have seen big losses.
  • Demolition of Nigerian High Commission building in Accra.

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Africa

H.E. President John Mahama Appointed As AU High Representative for Somalia

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The Chairperson of the Commission, H.E. Moussa Faki Mahamat, has announced the appointment of H.E John Dramani Mahama, former President of the Republic of Ghana, as his High Representative to Somalia.

As the High Representative for Somalia’s political track, President Mahama will work with the Somali stakeholders, to reach a mutually acceptable compromise towards an all-encompassing resolution for the holding of Somali elections in the shortest possible time.

In fulfilling his mandate, the High Representative will be supported by the African Union Mission in Somalia (AMISOM), to ensure that the mediation efforts and the peace support operation work together seamlessly.

The Chairperson of the Commission calls on the Somali stakeholders to negotiate in good faith, and to put the interests of Somalia and the well-being of the Somali people above all else in the search for an inclusive settlement to the electoral crisis.

This should usher in a democratically elected government with the legitimacy and mandate to resolve the remaining outstanding political and constitutional issues that are posing a threat to the stability of the country and the region as a whole.

The Chairperson of the Commission also encourages all the Somali stakeholders and the international community to extend every support to the High Representative, who will arrive the country in the coming days.

Ambassador Abukar Arman, a former Somalia special envoy to the United States and a foreign policy analyst says there have previously been interventions from neighbors have not brought Somalia the promised peace.

It is clear that no Somali can pursue a political career in his own country without first getting Ethiopia’s blessings. Already, Ethiopia has installed a number of its staunch cohorts in the current government and (along with Kenya) has been handpicking virtually all of the new regional governors, mayors and so forth.

In October 2010, the African Union appointed Jerry John Rawlings as the AU High Representative for Somalia to “mobilize the continent and the rest of the international community to fully assume its responsibilities and contribute more actively to the quest for peace, security and reconciliation in Somalia.”

That however, Ambassador Arman says the former Ghana president and AU Special Representative for Somalia is now assuming his new post with significant diplomatic capital, mainly resulting from the credible work of his fellow countryman, former president, and Special Envoy to Somalia, Jerry John Rawlings.

“On the other hand, he would be carrying the hefty political burden that comes with the so-called African Solutions for African Problems and its cash-gulping record. The concept is taken hostage by African sloganeers and foreign elements eager to advance zero-sum interests,” he wrote me in an emailed message.

Make no mistake, Somalia is held in a nasty headlock by a neighbourhood tag-team unmistakably motivated by zero-sum objective. It is their so-called African solution (not so much of the extremist group al-Shabaab) that is setting the Horn on fire.

According to AFP news report, Mogadishu had been on edge since February, when President Mohamed Abdullahi Mohamed’s term ended before elections were held, and protesters took to the streets against his rule. But a resolution in April to extend his mandate by two years split the country’s fragile security forces along all-important clan lines.

Soldiers loyal to influential opposition leaders began pouring into the capital. The fighting drove tens of thousands of civilians from their homes and divided the city, with government forces losing some key neighborhoods to opposition units.

Under pressure to ease the tension, Mohamed abandoned his mandate extension and instructed his prime minister to arrange fresh elections and bring together rivals for talks. Indirect elections were supposed to have been held by February under a deal reached between the government and Somalia’s five regional states the previous September.

But that agreement collapsed as the president and the leaders of two states, Puntland and Jubaland, squabbled over the terms. Months of UN-backed talks failed to broker consensus between the feuding sides.

In early May, Mohamed re-launched talks with his opponents over the holding of fresh elections, and agreed to return to the terms of the September accord.

Prime Minister Mohamed Hussein Roble has invited the regional leaders to a round of negotiations on May 20 in the hope of resolving the protracted feud and charting a path to a vote. In the meanwhile, the international community has threatened sanctions if elections are not held soon.

Somalia remains the epicenter of global geopolitical and geo-economic competition. Some of the major ones are in a cut-throat competition that further complicates the Somalia conundrum. With its longest coastline, bordering Ethiopia to the west, Kenya to the southwest and the Gulf of Eden, Somalia has attracted many foreign countries to the region in East Africa.

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