By Kestér Kenn Klomegâh
After two symbolic African leaders’ summits, Russia’s trading is steadily increasing but significantly in exports of military weapons and equipment. According to Kremlin reports, Russian President Vladimir Putin said the trade turnover between Russia and African countries had increased by almost 35% in the first half of 2023 despite international sanctions. During the first summit, Putin promised to double trade with African states within five years as he sought to win new friends with offers of nuclear power plants and fighter jets. He fixed the expected figure at $40 billion, which he repeated in several speeches until the last summit held in July 2023 in St. Petersburg.
According to the Russia Today (RT) report, under the headline “Russia expanding African defence partnerships” issued 5th Sept. 2024, Russia’s arms exporter Rosoboronexport has outlined plans for joint ventures regarding military equipment with the continent. That report indicated that the Russian arms export agency Rosoboronexport has been advancing multiple cooperation projects with African countries, quoted Aleksandr Mikheev, the agency’s head. Mikheev, speaking on the sidelines of the Egypt International Airshow, further said his agency was working on several industrial cooperation projects with African countries, focusing on the licensed production of small arms, ammunition, armoured vehicles, and fast combat boats.
The head of the Russian arms export agency also noted the increasing importance of Africa and the Middle East in the company’s overall business. “The combined share of Middle Eastern and African countries in Rosoboronexport’s order portfolio exceeds 50%, which translates to over $25 billion,” he said. Mikheev revealed that over 40 African nations are actively engaged in military-technical collaboration with Russia. “There is a very significant share of signed and executed contracts in the order portfolio. Mostly, of course, it is equipment, air force, air defence, helicopters, small arms, electronic warfare.”
Last December, the Rosoboronexport head said that African countries bought more than 30% of the weapons systems exported by Russia in 2023. The Stockholm International Peace Research Institute reported last year that Russia had overtaken China as the leading arms seller in sub-Saharan Africa, with market share growing to 26% as of 2022. According to the report, Algeria, Angola, Egypt, and Sudan were the top importers of Russian weapons on the continent.
Business& Financial Times also reported that Putin had promised to double trade with African states within five years as he sought to win new friends with offers of nuclear power plants and fighter jets. Moscow remains the biggest exporter of arms to Africa. The most successful pillar of Russia’s conventional trade with Africa is arms, managed mainly by state-controlled Rosoboronexport. Between 2010 and 2021 Russian arms exports to Africa dwarfed those of every other supplier and were three times greater than those of China, the second-biggest over the period, according to the Stockholm International Peace Research Institute. Other Russian companies with significant operations in Africa include Alrosa, which operates diamond projects in Angola and is exploring in Zimbabwe; Rusal, which mines bauxite in Guinea; and Rosatom, which is building a nuclear power plant in Egypt.
As years move on, few of those promises have materialized and yet Russian influence on the continent is growing faster than at any point since the end of the Cold War. But this trend has fallen short of the Kremlin’s promise to African leaders. African exporters are not trading in Russia’s market due to multiple reasons including inadequate knowledge of trade procedures, rules and regulations as well as the existing market conditions. Until now, African entrepreneurs have struggled pathways to explore Russia’s market as trade preferences also mentioned several times failed to be implemented. Multiple challenges still grossly remain and stand in the pathways to ultimately realize the economic cooperation goals set by the two summits. Foreign Minister Sergey Lavrov plans to hold the first Foreign Ministerial Conference in November 2024 to strategize some aspects of strengthening economic cooperation between Russia and Africa.
Some experts think that the ongoing crisis between Russia and the West is stimulating Russia’s leadership to look for new markets, and besides Asia-Pacific countries, Africa has become its choice. Quite recently, Russian Foreign Minister Sergey Lavrov wrote in his article: “We attach special significance to deepening our trade and investment cooperation with the African States. Russia provides African countries with extensive preferences in trade.”
The minister went on: “At the same time, it is evident that the significant potential of our economic cooperation is far from being exhausted and much remains to be done so that Russian and African partners know more about each other’s capacities and needs. The creation of a mechanism for the provision of public support to business interaction between Russian companies and the African continent is on the agenda.”
Reports further showed that Russia has started, after the second summit in July 2023, strengthening its economic cooperation by opening trade missions with the responsibility of providing sustainable business services and plans to facilitate import-export trade in some African countries. But these Russian trade centres can also embark on a “Doing Business in Africa” campaign to encourage Russian businesses to take advantage of growing trade and investment opportunities, to promote trade fairs and business-to-business matchmaking in key spheres in Africa.
China, India and Russia are members of the BRICS association with the common goal of fighting against Western domination in Africa. However, the three have different distinctive individual economic interests in Africa. China entered Africa immediately after Russia created the vacuum following the Soviet’s collapse, China has developed its economic tentacles across Africa. For some time, Russia has been concerned with China’s growing presence in Africa. And that points to the fact that Moscow has to step up its activities, whether between governments or private enterprises, more strategically in African countries. For many Russian and African analysts and policy observers believe that a public-private partnership (participation) strategy in promoting trade will help significantly to polish part of the soft power image both in Russia and Africa.
According to the African Development Bank, Africa’s economies are growing faster than those of any other continent. 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 in 2023 as compared to 51 per cent in 2021, and around 380 million of Africa’s 1.4 billion people are now earning good incomes – rising consumerism – that makes trade profitable.
Of course, there are various ways to open the burgeoning market for Africa. One of the surest ways is to use the existing rules and regulations. The preferential tariffs for agricultural products exist but only a few African exporters use them, mainly from South Africa, Kenya, Morocco and Egypt. Russian authorities should make it possible for more individual African countries to negotiate for their products to enter the market. The African regional economic blocs can be useful instruments for facilitating trade between Africa and Russia. In addition, the Russian Foreign Affairs Ministry posted an official report on its website that traditional products from least-developed countries (including Africa) would be exempted from import tariffs. The legislation stipulates that traditional goods are eligible for preferential customs and tariff treatment.
Most of the experts interviewed for this story expressed skepticism and wondered if Russian authorities were seriously prepared to open the market for Africa, while others suggested, that with the context of current global competition, Russian authorities have to provide trade incentives. An academic researcher at the African Studies Institute in Moscow told this article’s author that the trade preferential for only traditional African goods would really not promote a large scale trade, unfortunately, Russia’s trade with Africa has mostly concentrated in weaponry and military hard-wares.
“I think there is a narrow sphere for African traditional products. There is some interest in African culture in Russia. But still, I think that art and crafts trading cannot promote reciprocal trade radically. As to the tea and coffee trade, it would face keen competition from other global brands. For example, cocoa is needed by our chocolate processing plants. So, I do not think that it will be a significant promotion in trade,” Oleg Kavykin, a Research Fellow at the Center for Civilisation and Regional Studies of the African Studies Institute in Moscow, said, as quoted by Inter Press Service.
“It is worth saying that Russia (as China and India are currently doing) should embark on trade facilitation measures, which would have to include simplification of import-export procedures (customs, warehousing and transportation) to encourage trade with African countries,” according to Professor Kavykin.
Some say it’s probably both a mix of negative perception and inadequate knowledge about the emerging business potentials that might have an impact on trade development between Russia and Africa. But, Peter Osei-Adjei, an expert on Financial Valuation and Ligation in Dallas, Texas, says assertively that Russia can facilitate trade with Africa. Trade facilitation focuses on lowering the cost of doing business by minimizing regulations and procedures required to move goods and services across borders.
“Russia can change the equation, if it plans to do so. Russian authorities can even shift focus and transfer their technology to agriculture, and oil and gas in Africa which is booming these days. But, do you think they will give up their competitive advantage in arms and deal with agriculture or agricultural products?,” he asked rhetorically.
“The fact is that Russia’s two main export products are natural resources and military hardware. And that’s what matters to them, for real! As we are aware already, in Africa we only need their arms or the military equipment for the numerous conflicts going on in the region. Russia has never been a partner in Africa when it comes trading agricultural products, and this is not just about Africa, rather, it’s the same trend even in the Middle East and Asia,” Economist Peter Osei-Adjei told this author.
Economist Peter Osei-Adjei is not the only expert with similar views that Russia’s market is attracting new export partners, especially those in Latin America and Asia, and are hoping to capitalize on Russia’s ban on importing food from Europe, the U.S., Australia, Canada and Norway. The experts believe that new trade alliances are emerging and have “great potential for growth” amid the economic sanctions.
Maxim Matusevich, an Associate Professor and Director of the Russian and East European Studies Program at Seton Hall University, told me in an interview that “in the past decade there was some revival of economic ties between Africa and Russia – mostly limited to arms trade and oil/gas exploration and extraction. Russia’s presence in Africa and within African markets continues to be marginal and I think that Russia has often failed to capitalize on the historical connection between Moscow and those African elites who had been educated in the Soviet Union.”
“It is possible that the ongoing crisis in the relations between Russia and the West will stimulate Russia’s leadership to look for new markets for new sources of agricultural produce. But again, it is not clear if Africa could be their choice – many African nations possess abundant natural resources and have little interest in Russia’s gas and oil. As it was during the Soviet times, Russia could only offer a few manufactured goods that would successfully compete with Western-made products. African nations will probably continue to acquire Russian-made arms, but otherwise, I see only a few prospects for diversification of cooperation in the near future,” added Professor Maxim Matusevich.
Jeff Sahadeo, Director of Russia & Eurasia Studies at Carleton University in Canada, told me in our discussion that with the current conflict between the United States and members of the European Union on one side and Russia on the other side, Russia and African countries could now use the chance to strengthen their trade relations. “Everything is quite fluid now with the tension between the West and Russia, Africa may be able to offer more food sales in the wake of the embargo President Vladimir Putin has slapped on several Western countries,” Sahadeo noted firmly in his email discussion.
Philip Kobina Baidoo Jnr, a Policy Researcher and Analyst, noted in an email interview that Russia has been slow in expanding trade into the region compared to Brazil, India and China of the BRICS association are rather aggressive about deepening economic cooperation with Africa, but one major advantage is that Russia has huge oil reserves and natural resources, and is better placed to use a small part of the revenues to drive its foreign policies globally.
Nearly all academic researchers and analysts I have spoken with remembered Russia’s statement relating to the preferential tariff regime for developing countries which granted duty-free access for African products, but potential African exporters either failed to take advantage of it or were unaware of the advantageous terms for boosting trade. Analyzing the present market landscape of Africa, Russia can export its technology and compete on equal terms with China, India and other prominent players. On the other hand, Russia lacks the competitive advantage in terms of finished industrial (manufactured) products which African consumers obtain from Asian countries such as China, India, Japan and South Korea.
Charles Robertson, Global Chief Economist at Renaissance Capital, thinks that the major problem is incentives. China has two major incentives to invest in Africa. First, China needs to buy resources, while Russia does not. Second, Chinese exports 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 2/3 of exports), steel and metals (which is either not cost-effective to sell in Africa, or again are the same as Africa is selling) and military weapons.
Keir Giles, an Associate Fellow of the Royal Institute of International Affairs (Chatham House) in London and a regular contributor to research projects on Russia in both the UK and Europe wrote in an email that “there are some more fundamental problems which Russia would need to overcome to boost its trade turnover with the region. The majority of this vast amount of trade with China simply cannot be competed with by Russia. A large part of African exports to China by value is made up of oil, which Russia doesn’t need to import. And a large part of China’s exports to Africa are consumer goods, which Russia doesn’t produce.”
He explained further that trade in foodstuffs in both directions suffers similar challenges, which are unlikely to be affected by the current politically motivated Russian ban on foods from the European Union, the United States and Australia. In effect, in sharp contrast to China, the make-up of Russian exports hasn’t developed since the end of the Soviet Union and still consists mostly of oil, gas, arms and raw materials. For as long as that continues, the scope for ongoing trading with most African nations is going to be severely limited.
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 only after the country’s industrial base experiences a more qualitative change and introduces tariff preferences for trade with African partners. As a reputable institute during the Soviet era, it has played a considerable part in developing African studies in the Russian Federation.
“The situation in Russian-African foreign trade will change for the better if Russian industry undergoes 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,” according to the views of Professor Aleksei Vasiliev, the former Director of the RAS Institute for African Studies and full member of the Russian Academy of Sciences, and Evgeny Korendyasov at the RAS Institute for African Studies.
While Russia’s trade still straddles with Africa, China and other external players are navigating the single African Continental Trade Area (AfCFTA) which offers huge opportunities, an initiative by the African Union (AU). Russia can build on the historical and time-tested friendly ties with Africa but has to review and take concrete measures to work jointly with African countries in strengthening economic and trade cooperation, an essential pillar of the multipolar world. A complete departure away from mere rhetoric will be an encouraging step forward, and enhance economic relations between African States and the Russian Federation.