From cutter to space station: Russia preparing to start supplying equipment to Africa
African countries for Russian businesses are a historical outlet. The USSR actively developed trade relations with the continent since the 1960s. These relations ended for a long 30 years after the dissolution of the USSR. In an op-ed column of Realnoe Vremya, market expert Natalia Pchyolkina explains why it is profitable for Russian businesses to occupy a niche in this market right now.
Expansion of political and economic footprint
The Russia — Africa summit in 2019 was the key moment in promoting our country in Africa and active establishment of business relations. Leaders and representatives of 54 countries of the continent arrived here at that moment. So the second biggest and populated continent after Eurasia showed it hoped for our state’s active role in its development. First of all, Africa doesn’t consider Russia as former coloniser. The solid friendship in the late 20th century created a special attitude to Russians. But Moscow doesn’t return to the role the Soviet Union used to play for the continent’s countries.
The logic of the Cold War in the 60-70s forced investing huge sums in gold to support socialist regimes. Contemporary Russia doesn’t see Africa as an arena of political opposition. First of all, economic benefits the cooperation with some states has is in the limelight now.
Outlooks for population growth in Africa make the outlet on this continent very attractive. By the middle of the century, sociologists expect the population of the continent to reach 2 billion people. It is people who can consume a lot of services, commodities, food. This can start to be supplied right now. There is an option of entering the market on our own, but it is easier and safer through a trade representative office. Many investors have already followed this example. So one of Russian companies — Metalwork — is preparing to open its own office in Nigeria.
It is profitable to supply commodities and services whose production is now considered a priority. First of all, it is energy, grain and food, research and development and much more. The urbanisation of the population rapidly grows, and this tendency is common for the whole continent. In the last decade, imports of African states totalled $7 trillion. The leading economy of the region — Nigeria — was in the top countries. It had 9% of all the imports. While political experts and economists estimate import growth rates at 1,5% a year on average.
These data means that during the next decades the continent will be a global leader in the economic development pace.
African countries can be of great interest for Russian agricultural manufacturers and agricultural machinery producers (different harvesters, cultivators and so on). In the next two decades, local producers won’t be able to meet growing demand for food. Also, environmental problems caused by mass unsafe mineral production doesn’t facilitate the development of other types of economic activity.
African continental free trade zone
Political experts note that the role of Africa as one integral subject on the world arena will grow. General processes aimed to create a union (AfCFTA) show the aspiration of all countries to follow a common development course, which means the region will anyway be considered as one mechanism like the European Union by other countries.
Such tendencies will additionally intensify the great interest of other countries in the continent, including in R&D, education and digitalisation. In the next two decades, analysts forecast demand for energy will grow — coal, oil, gas.
The opportunities of Russian exports for a wide range of products and services expanded with the creation of the African union. The union was founded in 2019, by 2063, the union plans to become one economic and political system. What is especially important in the light of the new economic situation, most African countries are loyal to Russian. In the last eight years, African countries have fund ways of bypassing Western sanctions to continue and expand cooperation in strategic areas.
China, European countries and Turkey developed their own African strategies in 2010-2020 and implement them. Billions of investments of transnational corporations are made here (for instance, Google successfully implements quick-access internet programme on the continent). However, the USA singles out South Africa at state level which doesn’t help the country to strengthen positions in the region.
The promotion of eco-friendlier production technologies, joint control and inspection of harmful emissions into the soil, water and air, control over greenhouse gases is considered to be worthy of special attention. It is a common global interest, its development also needs supplies of modern and safe machine tools and equipment and means of scientific environment monitoring.
The author’s opinion does not necessarily coincide with the position of Realnoe Vremya’s editorial board.