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Russia’s strategy to enter the African Market

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In this interview with Alisa Andreevna Prokhorova, Managing Director for International Activities and Interaction with Business Councils, and Group of companies of the Russian Export Center, not only discusses at length but also offers an 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 refers 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. All countries of the world, large corporations plan a strategy to enter the market with a deterred 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 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 was only US$ 5 billion (less than 1.5% of the total), then in 2019 – already US$ 14 billion (3.3%).

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 export to Africa has consistently exceeded US$ 10 billion (2018 was a record year, exports amounted to US$ 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 US$ 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 US$ 5 billion in 2019) the statistics are more inconsistent, where the export of Russian non-commodity goods over the five past years ranges from US$ 1.8 billion in 2015 to US$ 2.2 billion in 2019. In spite of that, 2018 was the most successful year with an export volume of US$ 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 (US$ 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 a priority attention to the development of the relations with sub-Saharan Africa. The outcome of 2020 the volume of non-commodity export amounted to US$ 432.1 million. There was a 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 US dollars), Tanzania (17.8 million US dollars), Ghana (17.1 million US dollars), Kenya (16.6 million US dollars) and Uganda (14.6 million US dollars). 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 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, 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. The 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?

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 labor 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 African market and makes it more significant for Russian exporters. 

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.

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Pragmatic Proposals to Optimize Russia’s Pledged Rehabilitation of Ethiopia

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A girl stands outside her home in the Tigray Region, Ethiopia. © UNICEF/Tanya Bindra

Russian Ambassador to Ethiopia Evgeny Terekhin pledged that his homeland will help rehabilitate his hosts after getting a clearer understanding of the full extent of the damage that the terrorist-designated Tigray People’s Liberation Front (TPLF) inflicted on the northern part of the country throughout the course of its approximately half-year-long occupation of the Afar and Amhara Regions. China’s Xinhua recently cited official Ethiopian government statistics about this which claim that the Amhara Region suffered damages upwards of approximately $5.7 billion.

According to their data, the TPLF partially or fully damaged 1,466 health facilities and vandalized water, electricity, and transport infrastructure. 1.9 million children are out of school in that region after more than 4,000 schools were damaged by the group. Over 1.8 million people were displaced from the Afar and Amhara Regions while 8.3 million there are suffering from food insecurity. The scale of this humanitarian crisis is massive and the direct result of the US-led West’s Hybrid War on Ethiopia that was waged to punish the country for its balanced foreign policy between the US and China.

It’s here where Russia can rely on its recent experiences in helping to rehabilitate Syria and the Central African Republic (CAR) in order to optimize its pledged rehabilitation of Ethiopian. Those two countries are much more war-torn than Ethiopia is, the latter of which only saw fighting in its northern regions instead of the entirety of its territory like the prior two did. The most urgent task is to ensure security in the liberated areas, which can be advanced by summer 2021’s military cooperation agreement between Russia and Ethiopia.

This pact could potentially see Russia sharing more details of its earlier mentioned experiences in order to enhance the Ethiopian National Defense Force’s (ENDF) security and stabilization operations in the northern part of the country. Syria and the CAR survived very intense Hybrid Wars that utilized cutting-edge military tactics and strategies against them similar to those that were subsequently directed against Ethiopia by the TPLF. It would help the ENDF to learn more about the challenges connected to ensuring security in areas that have been liberated from such contemporary Hybrid War forces.

The next order of business is to help the many victims of that country’s humanitarian crisis. Russia’s experience with assisting Syria in this respect, which suffered one of the world’s worst humanitarian crises in decades, can be of use to Ethiopia. This is especially the case when it comes to aiding its internally displaced people. Their immediate needs must be met and maintained, which might require urgent support from that country’s trusted partners such as Russia. Provisioning such in an effective and timely manner can also improve Russia’s international reputation too, especially among Africans.

Northern Ethiopia’s post-war rehabilitation must be comprehensive and sustainable. The country’s Medemer philosophy — which has been translated as “coming together” – will form the basis of these efforts. Prime Minister Abiy Ahmed touched upon this in his 2019 Nobel Peace Prize speech and his book of the same name that was released earlier that year. Its English translation hasn’t yet been published but Medemer was explained at length by high-level Ethiopian officials during an early 2020 US Institute of Peace panel talk and in Ethiopian writer Linda Yohannes’ insightful book review.

An oversimplification of it in the economic context is that Medemer preaches the need for comprehensive, inclusive, and sustainable growth through public-private and other partnerships that bring prosperity to all of its people, which in turn strengthens socio-political relations between them. It seeks to apply positive aspects of foreign models while avoiding the bad ones. The Medemer mentality aspires to balance cooperation with competition, constantly improving itself as needed, in order to synchronize and synergize Ethiopia’s natural economic advantages in people, location, and resources.

In practice, this could see Russian public and private companies partnering with Ethiopia’s primarily public ones to rehabilitate the northern regions’ damaged infrastructure. Since sustainable growth is one of Medemer’s key concepts, the country’s Russian partners could also train more laborers, social workers, teachers, and doctors throughout the course of these projects while offering scholarships to some internally displaced youth for example. In that way, Russia and Ethiopia could truly embody the Medemer spirit by literally bringing their people closer together as a result of these noble efforts.

All the while, Russia’s international media flagships of RT and Sputnik should be active on the ground documenting the entire experience. The immense influence that Moscow has in shaping global perceptions can be put to positive use in exposing the foreign-backed TPLF’s countless crimes against humanity in northern Ethiopia. This can powerfully counteract the US-led West’s information warfare campaign against its government, which misportrays the TPLF as innocent victims of the “genocidal” ENDF, exactly as similar Russian media efforts have done in debunking Western lies against Syria.

The world wouldn’t only benefit by learning more about the US-led West’s lies against Ethiopia, but also in seeing how effectively Russia is working to reverse the damage that their TPLF proxies inflicted in the northern part of that country. Russia is also a victim of their information warfare campaign, which misportrays the Kremlin as a dangerous and irresponsible international actor. The truth, however, is that Russia is a peaceful and responsible international actor that has a documented track record of cleaning up the West’s Hybrid War messes in Syria, the CAR, and prospectively soon even Ethiopia too.

Upon taking the lead in rehabilitating northern Ethiopia, Russia should diversify the stakeholders in that country’s prosperity in coordination with its hosts. It’s in Ethiopia’s interests as well to receive assistance from as many responsible and trusted partners as possible. Russia can help by requesting that relevant aid and multilateral rehabilitation efforts be placed on the agenda of the proposed heads of state meeting between the Russian, Indian, and Chinese (RIC) leaders that presidential aide Yury Ushakov said was discussed for early 2022 during President Putin’s latest video call with President Xi in December.

The RIC countries stood with in solidarity with Ethiopia at the United Nations in the face of the US-led West’s subversive attempts to weaponize international law against it. They’re strong economies in their own right, not to mention through their cooperation via BRICS and the SCO, the latter organization of which also has anti-terrorist and other security dimensions. These two multipolar platforms could potentially be used to extend economic, financial, humanitarian, and security cooperation to their Ethiopian partner to complement bilateral and trilateral efforts in this respect.

Russia’s increasingly strategic ties with the United Arab Emirates (UAE) could also lead to Moscow working more closely with Abu Dhabi on related rehabilitation matters with their shared partners in Addis Ababa. Observers shouldn’t forget that Crown Prince Mohammed Bin Zayed (MBZ) played a crucial role in brokering peace between Ethiopia and Eritrea in 2018. He even awarded their leaders his country’s highest civil honor when they both visited the UAE that summer. Furthermore, Al Jazeera alleges that the UAE has maintained a humanitarian (and possibly even military) air bridge to Ethiopia.

Regardless of whether or not the military aspect of this reported bridge is true or not, there’s no denying that the UAE has emerged as a major stakeholder in Ethiopia’s success. It deposited $1 billion in Ethiopia’s central bank in summer 2018 as part of its $3 billion aid and investment pledge at the time. The UAE also plans to build an Eritrean-Ethiopian oil pipeline in order to help the latter export its newly tapped reserves in the southeast. Additionally, DP World signed a memorandum with Ethiopia in May 2021 to build a $1 billion trade and logistics corridor to separatist Somaliland’s Berbera port.

Considering the closeness of Emirati-Ethiopian relations, it would therefore be fitting for RIC to incorporate the UAE as an equal partner into any potential multilateral plan that those countries might come up with during their proposed heads of state summit sometime in early 2022. It enjoys excellent relations with all three of them so it’s a perfect fit for complementing their shared efforts. Plus, the UAE has the available capital needed to invest in high-quality, long-term, but sometimes very expensive infrastructure projects, which can ensure northern Ethiopia’s sustainable rehabilitation.

It’s pivotal for Russia to prioritize its pledged rehabilitation of Ethiopia ahead of the second triennial Russia-Africa Summit that’s expected to take place in October or November after fall 2019’s first-ever summit saw Russia return to Africa following a nearly three-decade-long hiatus. Coincidentally, Ethiopia requested last April to hold the next event in Addis Ababa. That would be a sensible choice since its capital city hosts the African Union headquarters, has sufficient infrastructure, and can serve most of the continent through its Ethiopian Airlines, which regularly wins awards as Africa’s best airline.

The interest that Ethiopian Ambassador to Russia Alemayehu Tegunu recently expressed in courting more Russian investment ahead of the next summit goes perfectly well with Russian Ambassador to Ethiopia Terekhin’s vow to heighten cooperation between those countries’ ruling parties. This in turn raises the chances that the present piece’s proposals could hopefully serve as the blueprint for beginning relevant discussions as soon as possible on Russia’s pledged rehabilitation of Ethiopia with a view towards achieving tangible successes ahead of the next Russia-Africa Summit.

That timing is so important since Russia mustn’t miss the opportunity to showcase its bespoke “Democratic Security” model in Ethiopia. This emerging concept refers to the comprehensive thwarting of Hybrid War threats through economic, informational, military, and other tactics and strategies such as the action plan that was proposed in the present piece. “Democratic Security” approaches vary by country as evidenced from the differing ones that Russia’s practicing in Syria and the CAR, but the concept could attract many more African partners if it’s successful in Ethiopia by next fall’s summit.

Russia must therefore do everything in its power to bring this best-case scenario about. Rehabilitating Ethiopia won’t just improve millions of lives, expose the war crimes committed by the US-led West’s TPLF proxies, and enable Russia to showcase its “Democratic Security” model to other African countries, but ensure that the continent’s historical fountainhead of anti-imperialism and pan-Africanism survives its existential struggle. Upon that happening, Ethiopia can then serve to inspire a revival of these ideas all across Africa through its complementary Medemer concept and thus strengthen multipolarity.

From our partner RIAC

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Decade of Sahel conflict leaves 2.5 million people displaced

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Two displaced women sit at a camp in Awaradi, Niger. © UNOCHA/Eve Sabbagh

The UN Refugee Agency (UNHCR) called on Friday for concerted international action to end armed conflict in Africa’s central Sahel region, which has forced more than 2.5 million people to flee their homes in the last decade.

Speaking to journalists in Geneva, the agency’s spokesperson, Boris Cheshirkov, informed that internal displacement has increased tenfold since 2013, going from 217,000 to a staggering 2.1 million by late last year.

The number of refugees in Burkina Faso, Mali, and Niger now stands at 410,000, and the majority comes from Mali, where major civil conflict erupted in 2012, leading to a failed coup and an on-going extremist insurgency.

Increase in one year

Just last year, a surge in violent attacks across the region displaced nearly 500,000 people (figures for December still pending).

According to estimates from UN partners, armed groups carried out more than 800 deadly attacks in 2021. 

This violence uprooted some 450,000 people within their countries and forced a further 36,000 to flee into a neighbouring country.

In Burkina Faso alone, the total number of Internally Displaced Persons (IDPs) rose to more than 1.5 million by the end of the year. Six in ten of the Sahel’s displaced are now from this country.

In Niger, the number of IDPs in the regions of Tillabéri and Tahoua has increased by 53 per cent in the last 12 months. In Mali, more than 400,000 people are displaced internally, representing a 30 per cent increase from the previous year.

Climate, humanitarian crisis

Meanwhile, the humanitarian situation is rapidly deteriorating with crises on multiple fronts.

Insecurity is the main driver, made worse by extreme poverty, and the COVID-19 pandemic. The effects of the climate crisis are also felt more strongly in the region, with temperatures rising 1.5 times faster than the global average.

Women and children are often the worst affected and disproportionately exposed to extreme vulnerability and the threat of gender-based violence.

According to the UNHCR spokesperson, “host communities have continued to show resilience and solidarity in welcoming displaced families, despite their own scant resources.”

He also said that Government authorities have demonstrated “unwavering commitment” to assisting the displaced, but they are now “buckling under increasing pressure.”

Bold response

UNHCR and humanitarian partners face mounting challenges to deliver assistance, and continue to be the target of road attacks, ambushes, and carjacking.

In this context, the agency is calling on the international community to take “bold action and spare no effort” in supporting these countries.

UNHCR is also leading the joint efforts of UN agencies and NGOs to provide emergency shelter, manage displacement sites and deliver vital protection services, including combating gender-based violence and improving access to civil documentation.

In 2021, more than a third of the agency’s Central Sahel funding needs were unmet.

This year, to mount an effective response in Burkina Faso, Niger and Mali, the agency needs $307 million.

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SADC extends its joint military mission in Mozambique

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The Southern African Development Community (SADC) has collectively decided to extend its force mission mandate in Mozambique for three months to provide military support in fighting terrorism in Cabo Delgado, the northern seaside provincial district that suffered frequent militant attacks displacing thousands out of their homes.

The South African Mission in Mozambique (SAMIM), according to the final communiqué released after the leaders of the southern African countries gathered to review significant issues, among them the operations of the joint military force dispatched last year as attacks reached its greater heights to Mozambique.

Chairperson of the SADC’s Organ on Politics, Defense and Security and South African President, Cyril Ramaphosa told the gathering in Lilongwe, capital of Malawi, where the regional bloc held its extraordinary summit and reviewed progress in Mozambique, described SAMIM as highly successful in defeating the militant groups particularly in Cabo Delgado.

“I would like to express my appreciation and commend SAMIM for its work on the ground, as well as recognize the member states that have supported this work financially and in the deployment of military personnel and equipment,” the final report quoted Ramaphosa.

SADC cannot allow terrorism to spread to other provinces in Mozambique and to the region, and it is imperative to promote a spirit of unity among member countries as terrorism and violent extremism threaten the stability and development that the region has achieved over the past four decades, says the report.

The communiqué also approved the framework for support to Mozambique in addressing terrorism outlines, among others, comprehensive strategic actions for consolidating peace, security, and the socio-economic recovery of Cabo Delgado.

The Maputo daily Noticias wrote after the SADC summit that a budgetary allocation of US$29.5 million has been set aside for the three-month extension, after several years of high-level consultations and this would mean until at least mid-April. The SAMIM extension set from mid-January.

Addressing the opening session of the summit, the current SADC Chairperson, Malawian President Lazarus Chakwera, urged regional bloc member states to stick together and ensure that SAMIM remains multidimensional and comprehensive. He entreated SADC member countries not to relent, regress or even retreat on their commitments.

“What remains now is for us to stay the course and stick together. We cannot relent. We cannot regress. We cannot retreat. Our approach to this mission must continue to be multidimensional and comprehensive. It must not only focus on neutralizing the threat, but also have post-conflict plans to rebuild,” said Chakwera, added that the collective mission is paramount and the stakes for all the Member States are high because what they are fighting for is regional stability, and the sustainability of the quest for the bloc’s integration and socio-economic development.

Chakwera welcomed the comprehensive Cabo Delgado Reconstruction Plan launched by his Mozambican counterpart, Filipe Nyusi, and his government, which, among other issues, seeks to provide humanitarian support to the affected population, including internally displaced persons, and uplift their living standards.

Mozambican President Filipe Nyusi however expressed high optimism about the current military situation in Cabo Delgado. He said that all the bases from which the terrorists used to plan their actions are now in the hands of the Mozambican forces, and 2022 would be a decisive year to support the regional standby force in the final fight against terrorism in Mozambique.

For the Mozambican President Nyusi the extension of the SAMIM mission demonstrates the spirit of unity and solidarity that the Southern African Development Community members have readily and warmheartedly shown with the people of Mozambique.

Mozambique has grappled with an insurgency in its northernmost province of Cabo Delgado since 2017, but currently fast improving after the deployment of joint military force with the primary responsibility of ensuring peace and stability, and for restoring normalcy in Mozambique.

Mozambique has consistently maintained that all problems especially relating to conflicts and crises should be resolved largely based on the approaches of Africans, and of course with moral, political and material support from regional blocs such as SADC and the continental organization – African Union, and the involvement of United Nations with its UN Security Council.

With an approximate population of 30 million, Mozambique is endowed with rich and extensive natural resources but remains one of the poorest and most underdeveloped countries in the world. Mozambique is a member of the Southern Africa Development Community (SADC).

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