Article written

  • on 30.04.2012
  • at 02:40 PM
  • by Randa Ghazy

Understanding Russia-African Economic Cooperation 0

Low enthusiasm and inadequate knowledge of current market changes are key factors affecting economic cooperation between Russia and African countries, but experts have repeatedly suggested that this trend can be reversed if both African governments and Russian authorities get down to serious dialogue with concrete business agenda.

In an interview, Themba Mhlongo, Head of Programmes at the Southern Africa Trust, thinks that Africa should not expect higher trade flows with Russia simply because Africa has not engaged Russia.

Mhlongo told Buziness Africa that “there is no Africa-Russia Dialogue or mechanism for dialoguing with Russia, and also, on the other hand, Russia has not been as aggressive as China in pursuing opportunities in Africa because Russia has natural resources and markets in Eastern Europe, South West Asia. Russian exports to Africa might be dominated by machinery and (military) equipment (which serves their interest well).”

He suggested that Africa must engage all BRICS members equally including Brazil and Russia in order to build alliances and open trade opportunities including finance and investment opportunities. Also African countries must not seem to show preferences in their foreign policy in favour of Western Europe if they want to benefit from trade relations with Russia. They must learn to be neutral!

Mhlongo suspects that Africa still holds an old view about Russia being a communist state and less technologically developed or unsophisticated compared to Western Europe. But, Russia never colonized Africa and therefore there are no colonial ties between the two.

“If you look at African trade flows to Europe they reflect colonial ties most of the time. However, modern Russia is now one of the important emerging market countries and a member of BRICS. The Russian society is also closed and orientation is towards Western Europe in particular the United States (probably as a result of the period of bi-polar global power system that existed before). Although Russia exports to Africa but rarely sets up businesses. The language (or culture in general) could be one of the barriers to the development of trade relations with Russia,” he pointed out.

He proposed that both Africa and Russia can initiate a dialogue in the form of Africa-Russia summit to explore economic opportunities between them. However, there are also other avenues to engage each other through the BRICS bloc or through bilateral diplomatic channels. Russia has embassies in Africa and African countries have diplomatic representation in Russia. Africa may have to pay special attention to cultural issues and try to understand Russia in this ever changing environment and find an entry point to engage Russia.

Last December, the first Russia-Africa business forum under the chairmanship of Ethiopian President, Meles Zenawi, that aimed at reviewing the previous performance, and identifying potential spheres for strengthening bilateral economic cooperation between Russia and African countries was held in Addis Ababa, capital of Ethiopia.

The forum was initiated by the governments of Russia and Ethiopia , and the New African Initiative (NAI) – a nonprofit partnership organization. The main organizers were OAO Gazprombank, the Russian Chamber of Commerce and Industry, and the Coordinating Committee for economic cooperation with sub-Saharan African countries.

According to Russian Foreign Ministry, the African delegation to the forum included President of Equatorial Guinea and Chairman of the African Union Teodoro Obiang Nguema Mbasogo, Chairman of the Commission of the African Union, Jean Ping, as well as African ambassadors of countries accredited in Addis Ababa.

Special Presidential Representative for Cooperation with African countries and a Senator at the Federation Council, Mikhail Margelov, and a number of other Russian high-level officials took part in the forum at the state level from the Russian side. The event involved some 30 major Russian companies, their African business partners, and representatives of government and political circles from several African countries.

Russian companies are highly interested in the development of natural resources deposits in Africa. Russian companies want to develop deposits of rare metals, including cobalt and chromium ores, and uranium fields. The companies are also interested in diamond and platinum metals production in African states.

“Africa is a prospective region for Russian mining companies and Russia can offer technological products in the military, geological exploration and energy spheres. There are also prospects for sales of our metallurgical and machine-building products in Africa,” Margelov said at the Russia-Africa business forum.

“Russia’s participation in oil and gas production is important as well since Africa will provide up to one quarter of the world’s oil output soon,” he said, adding that Russia faced competition with U.S., EU, Chinese and Indian companies as well as with corporations from the Arabi Peninsula in the region.

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