Why Russian brands are still not in African homes (2023)

In her weekly media briefing on March 23, Russian Foreign Ministry spokeswoman Maria Zakharova indicated that geopolitical developments are rapidly shifting from global north to global south, and that the global turn and shift south definitely includes Soviet-era Africa.

She acknowledged that Russia had turned its back on Africa for the past three decades after the collapse of the Soviet era. And this period required the consolidation of resources and skills to move to a qualitatively new level, and now that the internal growth processes are complete, relations with different regions are taking shape on a new basis.

In the past, relations with a number of countries and regions were largely based on ideology. Despite the extraordinary aid that Russia provided to African countries, these were at the intergovernmental level. Russia still needs to establish contacts with the population, youth and women's groups and civil society, as well as the private sector. This component had to be improved based on new structures, which is happening now.

She further added: "Russia's active work on the African path is an essential part of the overall measures to develop constructive cooperation with a large number of countries pursuing open and balanced foreign policies guided by common sense and their own interests , and above all within the principles of the supremacy of international law and indivisible security with the central and coordinating role of the United Nations".

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However, Zakharova emphasized the fact that the expected level was not reached in all parts of Africa. In fact, the fabric of real economic relations is now being formed, and this process is extremely important. For this reason, the second Russia-Africa high-level summit will be another platform for building a strategic partnership with the continent.

This platform should determine the dynamics of the coming years and make a significant contribution to overcoming global and regional challenges. In addition, according to Zakharova, he must discuss and thoroughly examine issues related to food and energy security, health care, humanitarian cooperation and many others with African colleagues.

In recent years since taking office, Foreign Minister Sergei Lavrov has often said that trade between Russia and Africa would grow as more African partners continued to show interest in having Russians in Africa's economic sectors.

“Our African partners are interested in Russian companies working there more actively. This creates more competition between companies from western countries, China and Russia. Given the competition for mineral development in Africa, it is easier and cheaper for our African colleagues to select partners," Lavrov told staff and students at the Moscow State Institute of International Affairs in early September, a transcript available on the official website .

“In the early post-Soviet years, Russia's relations with Africa took a back seat. As we regained our status and control of the country, and the economy and social sphere began to develop, Russian companies began to look for promising projects abroad, and we began to return to Africa. This process has been going on for 15 years,” Lavrov said of post-Soviet Russia's relations with Africa.

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About ten years ago, precisely in May 2014, in a speech published on the official website, Lavrov said: “We attach particular importance to deepening our trade and investment cooperation with African countries. Russia offers broad trade preferences to African countries. 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 in order for the Russian and African partners to better understand each other's capabilities and needs."

However, reports monitored by this author indicate that Russia has begun to strengthen its economic cooperation, opening trade missions with responsibility for providing sustainable trade services and planning to facilitate import and export trade in several African countries. In addition, Russia has launched the Doing Business in Africa campaign to encourage Russian companies to take advantage of the growing trade and investment opportunities in Africa.

According to Russian President Vladimir Putin, trade between Russia and Africa is worth almost $18 billion. Addressing African parliamentarians at the plenary session, State Duma President Vyacheslav Volodin said it had reached $17.9 billion by the end of 2022. Statistics on Africa's foreign trade vary widely. For example, total US bilateral trade with Africa has fallen to around $60 billion in recent years, which, according to Africa in Focus, has been dwarfed by the European Union at over $200 billion and also by China at over $200 billion. Published by the Brookings Institution.

According to the African Development Bank, Africa's economy is growing faster than any other region. Almost half of African countries are now classified as middle-income countries, and around 350 million out of a billion people in Africa earn a good income - growing consumption - making trade profitable. On the other hand, Russia lacks the competitive advantage in terms of finished (manufactured) industrial products that African consumers get from Asian countries like China, India, Japan and South Korea.

As early as October 2007, the Russian Ministry of Foreign Affairs published an official report on its website that traditional products from less developed countries (including Africa) would be exempted from import duties. The legislator prescribes that traditional goods can be treated with preferential customs and customs duties. While Russia announced this preferential tariff regime for developing countries, which also granted duty-free access to African products, potential African exporters did not take advantage or were unaware of the favorable terms to boost trade. As I said, these did not happen.

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Keir Giles, Associate Fellow at the Royal Institute of International Affairs (Chatham House) in London, told me that “there are some more fundamental issues that Russia would need to overcome in order to increase its business volume with the region. Most of this huge volume of trade with China simply cannot be rivaled by Russia. A large part of Africa's exports to China is oil, which Russia is not required to import. And a large part of China's exports to Africa are consumer goods that Russia doesn't actually produce.”

He goes on to explain that the food trade both ways is suffering from similar challenges which, for political reasons, are unlikely to be affected by the current Russian ban on food from the European Union, United States and Australia. In fact, unlike China, the composition of Russian exports has not really evolved since the end of the Soviet Union and is still mostly made up of oil, gas, arms and raw materials. As long as this remains so, the scope for further trade with most African nations will be severely limited.

Academic experts who have researched Russia's foreign policy in Africa at the Institute of African Studies affirmed that Russia's exports to Africa will only be possible after the country's industrial base qualitatively changes and tariff preferences for trade with African partners are introduced.

"The situation in Russian-African foreign trade will change for the better when Russian industry undergoes rapid technological modernization, the state systematically and significantly supports Russian businessmen, and small and medium-sized enterprises gain wider access to foreign economic cooperation with Africa," said Professor Aleksey Vasiliyev, Hon. President of the Institute of African Studies and First Special Presidential Representative for Africa.

Just recently, dr. Gideon Shoo, a media business consultant based in the Kilimanjaro region of Tanzania, told me in an interview that Russian companies need to demonstrate their superiority in business arenas and African governments need to make it easier for Russian companies to establish and operate in countries . identified additional opportunities arising in the African Continental Free Trade Area (AfCFTA). This could be an opportunity for Russian companies to invest in infrastructure such as roads, railways, ports, hydroelectric power plants and internet connections that facilitate trade on the continent for more than 1.3 billion consumers.

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“Russian financial institutions can offer credit support that allows them to locate their production in the industrial zones of Africa, especially in the regions of South and East Africa, which show a certain stability and offer good incentives for investment and business. To work most effectively, Russians need to risk investments, recognize the importance of working together on key investment issues, and work closely together on challenges and opportunities on the continent," he added.

On the other hand, Dr. Shoo pointed out that Russia has so far been a closed market for many African countries. Access to the Russian market is difficult. However, African countries must look to new emerging markets for export products and make efforts to negotiate access to these markets. This could be another aspect of economic cooperation and a great business opportunity for both regions. The fact that the middle class in Africa is growing by leaps and bounds makes this market even more attractive and opens up more opportunities for Russian companies.

Almost all experts recognized that the import and export trade was slow for various reasons, including insufficient knowledge of trade procedures, cumbersome certification procedures, expensive logistics, safety and warranty issues, rules and regulations, and the conditions of the existing market. Obviously, potential Russian investors need to tap into Africa's young, entrepreneurial population and consider developing a keen interest in public-private partnerships rather than waiting for the Kremlin.

For decades, Russia has been looking for effective ways to promote diverse relationships and new cooperation strategies in economic areas in Africa. As the rules and regulations are reviewed and revised, the situation regarding Russia's presence in Africa and Africa's presence in Russia may change. All that is needed here is for Russia and Africa to make consistent efforts to seek new avenues, practical efforts to remove the existing barriers that have hampered trade over the years.

Now the Kremlin will hold the second Russia-Africa summit with high hopes for strengthening diverse ties, trying to transform existing ties and finding meaningful ways to increase the effectiveness of Russia-Africa cooperation. Exaggerated slogans and anti-Western rhetoric have become the mainstay of political initiatives that will not facilitate expected economic and trade cooperation with Africa. After all, China consistently sees Africa not as a basis for confrontation and competition, but as a basis for cooperation. China has set admirable examples and achieved so many tangible development-oriented results on the continent.

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The Soviet Union and Africa had very close and in many ways allied ties with most African countries during the decolonization of Africa. For obvious reasons, the Soviet Union ceased to exist in 1991. As a result, Russia has experienced many internal and external difficulties over the past two decades and is still struggling to survive US and European sanctions. However, Russia simply needs to really focus on the economic agenda, and this absolutely needs to be in line with the African Union's Agenda 2063.


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