Russia and Africa commit to strengthening trade ties

Africa

By
Kester Kenn Klomegah, GNA Moscow Bureau Chief
 

MOSCOW, Sept 09,
GNA – Russia’s Foreign Affairs Minister, Sergey Lavrov, says trade between his
country and Africa is on the path of growth as more African partners continue
to show interest in having Russians in the economic sectors of Africa.

“Our African
partners are interested in Russian business working more actively there”, he
said.

“This provides
greater competition between the companies from Western countries, China, and
Russia.

“With competition for
developing mineral resources in Africa, it is easier and cheaper for our
African colleagues to choose partners,” he told the staff and students at
Moscow State Institute of International Affairs.

He made reference
to the stronger partnership between the then Soviet Union and Africa, during
the decolonization of Africa.

“As we regained our
statehood and control over the country, and the economy and the social sphere
began to develop, Russian businesses began to look at promising projects
abroad, and we began to return to Africa.

“This process has
been ongoing for the past 15 years,” Lavrov said about post-Soviet Russia’s
relations with Africa.

“Overall, we are,
of course, far from the absolute figures characterizing trade and investment
cooperation between the African countries and, say, China.

“However, our trade
grew by 17 per cent over the past year (which is a sizable number) to over
US$20 billion and it continues to grow,” he added.

Statistics on
Africa’s trade with foreign countries vary largely.

For example, the
total United States (US) two-way trade in Africa has actually fallen in recent
years, to about US$60 billion, far eclipsed by the European Union (EU) with
over US$200 billion, and China more than US$200 billion, as stated by the
Brookings Institution in the “Africa in Focus post.

According to the
African Development Bank, Africa’s economies are growing faster than those of
any other regions.

Nearly half of
Africa’s countries are now classified as middle income countries – the number
of Africans living below the poverty line fell to 39 per cent as compared to 51
percent in 2016, and around 350 million of Africa’s one billion people are now
earning good incomes – rising consumerism – that makes trade profitable.

Charles Robertson,
Global Chief Economist at Renaissance Capital, thinks that the major problem is
incentives.

China has two major
incentives to invest in Africa – buy resources and exports, which are suitable
for Africa – whether it is textiles or iPads, goods made in China can be sold
in Africa. Russia exports little except oil and has (roughly two-thirds of
exports), steel and metals (which are either not cost effective to sell in
Africa, or the same as Africa is selling) and military weapons.

Academic experts,
who have researched Russia’s foreign policy in Africa, at the Russian Academy
of Sciences’ Institute for African Studies, have reiterated that Russia’s
exports to Africa can be possible through the introduction of tariff
preferences for trade with African partners.

“The situation in
Russian-African foreign trade will change for the better, if Russian industry
undergoes rapid technological modernization, the state provides Russian
businessmen systematic and meaningful support, and small and medium businesses
receive wider access to foreign economic cooperation with Africa,” stated
Professor Aleksey Vasiliyev, President of the Institute for African Studies and
the first appointed Special Presidential Representative to Africa.

Dr. Gideon Shoo,
Media Business Consultant based in Kilimanjaro Region in Tanzania, has also
explained in an interview discussion that Russian companies need to prove their
superiority in the business spheres and African governments have to make it
easier for Russian companies to set up and operate in their countries.

“Russian financial
institutions can offer credit support that will allow them to localize their
production in Africa’s industrial zones, especially southern and eastern
African regions that show some stability and have good investment and business
incentives,” he suggested.

GNA

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