Continental perspectives: as Russia is going to develop economic cooperation with Africa

Continental perspectives: as Russia is going to develop economic cooperation with Africanology link
18:04

Elena Zibrova,
Vladimir Agoev
On 23 and 24 October in Sochi will host the forum Russia — Africa, where for the first time on one platform representatives of business and government of African countries will discuss with Russian colleagues the possibility of increased investment activity and expansion of mutually beneficial trade. For 17 years the trade turnover of Russia with the States of the continent grew 13-fold and now totals more than $20 billion. However, analysts stress that the resources of the region our country will have a difficult competition with China, which has embarked on a vigorous economic expansion.

  • A view of the port in Luanda, Angola
  • AFP
  • © Rodger BOSCH

For the first time Russia is taking a large-scale forum on economic cooperation with African countries. The organizers emphasize that in 2001 the trade turnover between Russia and the States of the region grew from $5 billion to $20.4 billion, According to the FCS, in 2018 exports increased 18.2% (to $17.5 billion), imports — by 11.5% (to $2.9 billion). The main trade partners of Russia in Africa last year were Egypt, Algeria, Morocco, South Africa and Tunisia.

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Most popular Russian export commodities in Africa recognized by the food and agricultural raw materials, and machinery, equipment and vehicles, reported TASS citing data from the Ministry of economic development. Main imports from the continent to Russia fell to citrus, manganese ore and concentrates, as well as for cocoa, vegetables, fruits and raw tobacco.

Experts argue that Africa is now for Russia is of great interest, especially from the business point of view.

«Russia is experiencing a shortage of some important minerals. Talking about a deficit of nearly 20 minerals, domestic consumption of which is largely provided by imports. For example, we have a shortage of manganese — 100%, chromium 80%. The situation is similar with cobalt, coltan, and other minerals, which are used primarily in the production of high-tech products,» explained RT the head of the Center for the study of Russian-African relations and foreign policy of African countries, Institute for African studies Eugene Korendyasov.

The expert added that currently about 80% of the world’s production of coltan, the elements of which are present in any cell phone that falls on the Democratic Republic of the Congo. In addition, Russia buys nearly 60% of bauxite (aluminum ore) in Africa.

«We also have a huge interest in agricultural cooperation. The share of agricultural products accounts for about 26% of our exports to the continent. At the same time, more than 70% of Russian imports from Africa are agricultural raw materials and food, including vegetables, fruits, wine. It should be noted that the continent by 40-50% provide us cocoa and 33% tea — mainly through Kenya and Tanzania,» stressed Korendyasov.

In addition, Eugene Korendyasov added about the rising popularity of tourism. According to the expert, every year 2 million Russians visit the continent. Africa is also interested in development of relations with Russia in the energy sector and telecommunications, especially satellite communications. «There is a backlog in the production and processing of natural raw materials. For example, about 40% of the gold of the Russian «Severstal» produced through the work in Burkina Faso and Guinea. In addition, each year in Angola, we extracted diamonds on $400-500 million,» — concluded the expert.

  • Gold mining
  • AFP
  • © AMOS GUMULIRA

However, Russia is actively cooperating with Africa and the development of non-oil exports in foreign trade. As reported by RT, the Russian export center (REC, included in the group EBV.Of the Russian Federation), the key countries for the promotion of non-oil exports are Egypt (which accounts for over one third of the Russian-African trade turnover), South Africa, Zambia, Angola, Algeria, Nigeria and Kenya. For the first half of 2019 non-energy, non-oil exports increased by 15% compared to the same period of 2018.

According to the forecast of REC, in 2020 the growth of Russian-African trade is about 20%. The organization noted that a significant role in ensuring that growth is going to play the commissioning of a Russian industrial zone in Egypt.

«In recent years, Russia has been very poorly represented on the continent. In the Soviet years, our presence was more significant, at least politically. After this, our political and economic role on the continent has decreased. The interest of the region to actively work with our country stems from the fact that African countries expect to receive from Russia the credits on more favorable terms than other States. It is possible that for the upcoming forum can be followed by loans or other financial assistance», — says in a conversation with RT, Professor of the faculty of Humanities, HSE Irina Filatova.

Russia is ready to provide Africa loans only on market terms. This statement was made by President of Russia Vladimir Putin in an interview with TASS.

«Of course, the Soviet model with its pros and cons — was quite effective at the stage of formation of statehood of African countries. Today we continue to provide the African States with financial support. But if before such decisions are made mostly on political considerations, now — in the framework of humanitarian assistance. With regard to the provision of loans, now they are market-based,» — said the head of state.

Vladimir Putin cited the example of a loan of $25 billion to Egypt on the construction of four power units of NPP «Dub». Nuclear power station will be constructed on the Northern coast of the country, 3.5 km from the Mediterranean sea. The contract value is estimated at $30 billion, most of which will be financed by the Russian loan. The first power unit is scheduled for 2026. The construction of all four units of NPP is planned to be completed by 2029.

  • Coffee plantation in Tanzania
  • globallookpress.com
  • © Ulrich Doering/imageBROKER.com

«African countries, like Russia, are actively exporting their natural resources — mineral and iron ore, oil, gas. In many of these areas we are the same in terms of the supply. This means that we can either compete in these fields or to establish a relationship for example our cooperation with the countries of OPEC», — said Irina Filatova.

However, experts speak about a serious competition over access to African resources. Now the continent is a zone of special economic interest of China, the volume of trade with Africa exceeds Russian exactly ten times.

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As previously stated the Deputy Minister of Commerce of China Qian Kamin, in 2018, the Asian trade of the Republic with countries of the region increased by 20% to $204 billion.

«The African continent for China is both a source of direct access to resources (aluminum bauxite, ores of ferrous metals, forests, deposits of graphite for the manufacture of industrial diamond), and a large market of consumer goods products (clothes, fabrics, electronics, home appliances and much more) that looks very advantageous in terms of price and quality in the eyes of the mass market and trade networks», — told in an interview with RT chief analyst GK TeleTrade Peter Pushkarev.

According to analysts, by 2020 the volume of trade between China and African States could increase by another third.

— Russia summit Africa will be held on 23 and 24 October in Sochi, co-chaired by the Russian leader Vladimir Putin and President of Egypt Abdel Fattah al-Sisi. It invited the leaders of all 54 States of the continent, more than 40 of them have already confirmed their participation. Along with the summit economic forum, which will be attended by heads of States, government representatives and business.

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