Russia – Africa: new economic policy

The expert opinion was prepared based on the results of the session of the economic and humanitarian forum "Russia - Africa" in 2023, "Export potential of Russia - Africa in the face of new challenges."

In the current geopolitical situation, Russia needs specific mechanisms and unique tools to develop economic policy towards Africa. In this context, it is necessary to carry out comprehensive work between Russia and Africa, taking into account projects and instruments that can bring significant reputational benefits and identify areas in which Russia can provide maximum assistance in the development of Africa, acting as a full and competent partner. The main challenges Africa faces today are food and energy security, lack of energy system and logistics on the continent, insufficient infrastructure and technology, and continuous population growth leading to a surplus of labor and a shortage of jobs. African countries pay special attention to the development of domestic markets, which requires the localization of production and the creation of value chains on the continent. New instruments and formats for trade and economic cooperation were discussed at the session “Russia’s Export Potential &mdash” Africa in the face of new challenges." The discussion participants focused on three main aspects: the development of export and import products, cooperation models and training for the African continent.

Export — Russian imports from African countries

Russia's foreign trade turnover with African countries in 2022 amounted to 18 billion US dollars. About 25% of Russian supplies — grain crops, another 22% — oil and petroleum products. a significant share of exports — secret product groups, including weapons. The Ministry of Economic Development believes that by 2030, Russia and Africa can double trade turnover. Russian imports from Africa are dominated by food. His share — about 60% (USD 1.8 billion). President of the Russian Federation Vladimir Putin, in an article published on the eve of the Summit and Forum, noted that the potential for trade and economic cooperation between Russia and African countries is much higher than the current trade turnover indicator. According to the Federal Customs Service for 2021, the top 10 of our trading partners on the African continent are:

1. Egypt. 
   We supply: wheat, barley, metal – $4,200 million.
   We buy: citrus fruits, fruits, vegetables - $590 million.
2. Algeria.
   We supply: vehicles, grain, metals, wood – $2,290 million.
   We buy: tropical fruits, raw sugar – $20 million
3. Senegal.
   We supply: oil, fuel, cereals, fertilizers, paper and cardboard, ferrous metals – $1220 million.
   We buy: vegetables, fruits, nuts, copper – $3.55 million
4. Morocco.
   We supply: chemical products, metals, food, wood, fertilizers, paper and cardboard – $1210 million.
   We buy: textiles, shoes, fruits, nuts, sugar – $440 million
5. Nigeria.
   We supply: oil, wheat, fertilizers – $880 million.
   We buy: cocoa beans, aromatic plants – $40 million
6. South Africa.
   We supply: chemical products, metals, wood, paper and cardboard – $616 million.
   We buy: precious stones and metals, citrus fruits, cars – $686 million
7. Tunisia.
   We supply: food, fertilizers, wood, cereals, metals – $330 million.
   We buy: textiles, shoes, equipment, fish – $150 million.
8. Kenya.
   We supply: metals, oils, wood – $220 million.
   We buy: live trees, coffee, tea, fruits, nuts, vegetables – $140 million
9. Ethiopia.
   We supply: food, metals, cereals, rubber – $190 million.
   We buy: coffee, tea, vegetables, textiles, living trees – $30 million
10. Ghana.
    We supply: food, wood, fertilizers, essential oils, furniture, transport – $170 million.
    We buy: live trees, vegetables, fruits, nuts, pearls – $80 million

Analyzing these data, one cannot help but notice a significant imbalance in Russia’s trade with Africa in terms of a significant bias towards exports: in the structure of trade turnover, about 85% is accounted for by exports, 15% by imports. In the long term, we need to look for ways to increase imports of goods from the African continent, and, accordingly, our investments. In this regard, it must be taken into account that up to 40% of the world's gold reserves and up to 90% of chromium and platinum reserves are concentrated in Africa. It also contains the largest reserves of cobalt, diamonds and uranium on the planet. In addition, Africa accounts for 65% of the world's arable land and about 10% of its domestic renewable freshwater resources, suggesting enormous agricultural potential. According to Vasily Osmakov, Deputy Minister of Industry and Trade of the Russian Federation, the sectoral perimeter of interaction with African countries includes four areas: “Firstly, everything related to ensuring food security, deep processing in the agricultural sector, i.e. fertilizers, plant protection products, etc.; secondly, everything related to energy security; thirdly — transport: railways, aviation; fourthly — This is healthcare, pharmaceuticals."

New models of trade cooperation

The fundamental change in the international political and economic landscape in 2022 predetermined a change in the model of mutual trade. Traditionally, key Russian exports to Africa went through global traders, who took care of all logistics, financial support for transactions, insurance, etc. to the end consumer. Import deliveries were carried out using the same model. Last year, global traders refused to work with Russia, which served as a trigger for building direct long-term relationships with counterparties in Africa. The task is quite complex, since in recent years exporters and investors have gained a foothold in African markets not only from Western countries, but also from China, India, Turkey, Brazil, the Arab countries of the Persian Gulf and some others. However, our country can offer a fundamentally new, mutually beneficial model of interaction with African countries. We are talking about “industrialization” Africa, which will stimulate the region's domestic economies, which will help African countries achieve high growth rates, diversify their economies and reduce the risks of external shocks, which in turn will significantly contribute to the eradication of poverty through the creation of jobs and wealth. And the Russian side has exactly those technologies, for example, in energy, agriculture, mining, etc., as well as qualified specialists that are so needed in Africa now. Both Russian and African experts came to this consensus. According to George Elombi, executive vice president of the African Export-Import Bank (Afreximbank), the bank is ready to assist in emerging problems of mutual settlements, logistics and information support.

Education as the foundation of trade and economic cooperation

Education has a key role in a growing economy, being part of the economic agenda. The export of Russian education was given a special place at the session “Export Potential of Russia &mdash” Africa in the face of new challenges." Representatives of African countries expressed an urgent need for the training of African specialists in Russian universities. It should be recalled that the Soviet Union trained half a million Africans with higher education. More than 20 universities and 10 research centers were opened on the continent. Thousands of Russian teachers, doctors and scientists worked in Africa. In the post-Soviet period, this work was curtailed, today it needs to be revived. According to the Ministry of Education and Science of the Russian Federation, almost 35 thousand students from African countries study at Russian universities. For the upcoming academic year, the Ministry of Education and Science of the Russian Federation has doubled the number of budget places for African students — up to 4720. Considering the prospects for trade and economic cooperation, this is clearly not enough. For fruitful teamwork, we need people who, firstly, have high professional training, and secondly, are familiar with the culture and traditions of the country, the peculiarities of business relations, legislation, etc., have connections in business circles, including number acquired during studies. It is necessary not only to invite Africans to study in Russia, but also to open branches, representative offices, joint universities on the African continent, and also to train our specialists to work in joint ventures in Africa.

In conclusion, it should be noted that the following three aspects will influence the further development of Russian-African relations: competently selected products for export-import operations, a unique model of trade and economic interaction and the availability of trained personnel. This will allow cooperation not to break up into separate dialogues and will provide an opportunity to form a global vision of the future of Russia — Africa.