Analysts predict growth in trade between African countries and Russia

By Sophia Smirnova

According to the Executive Vice President of the African Export-Import Bank, George Elomby, the agreements reached at the July Russia-Africa summit will double the trade between the countries of the Black Continent and the Russian Federation, up to $40 billion by the end of 2026. Due to what it is realistic to achieve such results of a joint partnership, which areas of cooperation are the most promising, Izvestia found out.

Many destinations
The position of Africa in the modern world is unique, says Daniil Shulga, Associate Professor of the Department of International Relations and Humanitarian Cooperation of the Siberian Institute of Management, RANEPA.

• The political geography of the continent, with rare exceptions (Liberia and Ethiopia), is determined by the borders of the former colonial empires: Britain, France, Portugal, and to a lesser extent - Spain. This configuration creates a dual effect. On the one hand, within the framework of one state, there are often several nationalities, which gives rise to rivalry and the struggle of groups for power. On the other hand, the common language and the economic ties left over from the time of European rule become a help for the formation of regional associations.

According to the scientist, the Russia-Africa forum has shown that the project to isolate the Russian Federation has failed, and there are enough people in the world who want to cooperate with Moscow.

• Not all invited leaders share the Kremlin's position on all international issues by 100%, but in a multipolar world this is quite a working situation. Much more important is the presence of points of contact in the economic sphere. As you know, agreements built on mutual benefit are usually stronger than ideological alliances.

Therefore, from the point of view of political will, a doubling of trade volumes by 2026 does not look like something fantastic, especially since the declared amount of $40 billion is not so large compared to Russia's trade with other countries.

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In addition to the supply of agricultural goods, Russia can expand several more directions in the region.

• This is the production of cars, for example, the production of Lada in Egypt gives hope for this, - he continues. - These are arms supplies to African countries, many of which bought weapons from the USSR. Moreover, the SVO has shown the competitiveness of domestic weapons in the confrontation with NATO equipment. The Russian Federation has a positive experience in the spread of peaceful atom (Belarus, Turkey, India, Bangladesh, Egypt and China). So it would be wrong to reduce the prospects of Russian-African trade to the exchange of “our grain for their mineral resources”.

According to Daniil Shulga, it is obvious that the successful implementation of all of the above depends very much on stability in the region.

• With all the wealth of natural and human resources, interethnic and political difficulties (often the titular nation in one country is a minority in a neighboring state) so far, in my opinion, complicate the transformation of Africa into one of the "poles" of the modern world. However, mutually beneficial cooperation with Russia, India and China should improve the economic condition of the region, which will lead to its gradual stabilization in connection with the solution of a number of problems - at least energy and food.

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Despite everything
The past Russia-Africa summit can be called extremely fruitful for joint agreements, says Ekaterina Kosareva, managing partner of the VMT Consult analytical agency.

• 48 countries participated, the heads or second persons of 27 of them visited St. Petersburg personally. It is known about the signing of 161 agreements, but the amounts have not yet been disclosed. In particular, a program of assistance to African states in the field of medicine for 1.2 billion rubles was approved. This is a serious step towards strengthening not only economic but also social relations.

Africa is a promising partner, despite the obvious difficulties:

“Firstly, the continent periodically “shakes” from military coups, and therefore the risks increase when concluding long-term partnerships,” she continues. - Secondly, the regrouping is unprofitable for the countries of the West. Pressure can be expressed in sanctions, if not in the direction of Russia, then indirectly - for example, on financial institutions of already fragile economies. However, the potential to benefit from a huge market is enormous.

According to Izvestia's interlocutor, cooperation is most likely to be strengthened in such areas as energy, metallurgy, mechanical engineering and metalworking, forestry, construction, finance, etc.

“There are already examples of such successful cooperation,” notes Ekaterina Kosareva.

• For comparison: the volume of trade with Belarus, whose population is less than 10 million people, is from $40 billion to $50 billion. That is, doubling mutual trade in this case is not such an ambitious task.

According to the analyst, there are several obvious areas in which cooperation could be expanded.

• In particular, Russia can increase exports of food, fertilizers, agricultural machinery, cars, fuel to these countries. It is also possible to increase cooperation in infrastructure projects - the construction of railways, power plants, processing industries.

But there are also serious difficulties:

• First of all, this is a question of the solvency of African partners. The second is a rather serious competition for African markets, not only from Western countries, but also from China. Hence the high risks associated, for example, with military operations, which, for example, can now unfold around Niger, - sums up Artem Shakhurin.

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Real numbers

• Perhaps, $40 billion will be already in 2025, and in 2026 - on the contrary, again $20 billion or $35 billion. Our trade volumes are formed mainly due to exports, and it depends on exchange prices. Therefore, it is quite difficult to predict it. And it's not the volume that matters. I think it would be a good goal by 2026 for the volume of mutual trade not to be measured in dollars at all,” comments Andrey Maslov, director of the HSE Center for African Studies.

— This is market growth, — the expert continues. “And here it is important for us that oil prices also remain at a level high enough for such maneuvers. Qualitative growth can be achieved through the supply of, for example, LPG, liquefied hydrocarbon gases, which are used for cooking. In Africa, the growth of its consumption is a critical need in terms of preserving the environment and people's lives. Or, for example, LNG, complex chemical compounds, metallurgy products, woodworking with high added value.

From the point of view of Andrei Maslov, exports will grow steadily on one condition - if Russian exporters switch to settlements in rubles, the local currency, and learn to work with dinars, rupees and yuan.

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Catch up and overtake
The trade turnover may well exceed these estimates, says Yaroslav Kabakov, director of strategy for FG Finam.

• The active development of partnership between Russia and African countries is just beginning. In this context, the summit was an important catalyst. The reason is the strengthening of mutual trade flows, the enrichment of the scale of cooperation and the expansion of economic nodes. Particular attention should be paid to interaction in the fastest growing trade turnover. These are energy, oil and gas sector, metallurgy, food and grain supplies.

In the analysts opinion, the problem of food shortages remains relevant in some African countries, which makes Russia important as a grain supplier.

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— It is important to note that the imposition of sanctions and changes in supply logistics may affect a number of goods, including coffee, tea, cocoa beans and others. It should be recognized that in certain industries more difficult conditions may arise, primarily due to financial and transport logistics, Kabakov concludes.
This article originally appeared in Russia at Iz.ru