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Russia’s financial strategy for Africa

In order to raise its geopolitical influence, Russia has been making efforts identifying mega infrastructure projects such as nuclear power and energy, natural resources exploration and talks consistently about increasing trade with Africa. On the other hand, Russia primarily needs to work on a coordinated mechanism for financing these corporate policy initiatives and further push for increased trade with Africa.

On November 23, a videoconference organized by Federation Council of Russia, Chamber of Commerce and Industry of Russia and Business Russia Association, focused partly on identifying funding sources for exports, concretizing proposals for increasing exports to Africa and looking at facilitating amendments to the Russian legislation if required to promote exports to the African market.

Senator Igor Morozov, a member of the Federation Council Committee on Economic Policy, and newly elected Chairman of the Coordinating Committee on Economic Cooperation with Africa, noted during the meeting that in conditions of pressure from sanctions, it has become necessary to find new markets, new partners and allies for Russia.

“This predetermines the return of Russia back to Africa, makes this direction a high priority both from the point of geopolitical influence and in the sphere of trade and economic context.”

“It is important for us to expand and improve competitive government support instruments for business. It is obvious that over the thirty years when Russia left Africa, China, India, the USA, and the European Union have significantly increased their investment opportunities there in the region,” Morozov stressed.

With a renewed growing interest in the African market, Russians are feverishly looking for establishing effective ways of entry into the huge continental market. As result, Senator Igor Morozov unreservedly suggested creating a new structure within the Russian Export Center – an investment fund. He explained thus:

“Such a fund could evaluate and accumulate concessions as a tangible asset for the Russian raw materials and innovation business.”

The Coordinating Committee for Economic Cooperation with African States was created on the initiative of the Chamber of Commerce and Industry of the Russian Federation and Vnesheconombank with support from the Federation Council and the State Duma of the Federal Assembly of the Russian Federation. It has had support from the Ministry of Foreign Affairs, the Ministry of Economy and Trade, the Ministry of Natural Resources, as well as the Ministry of Higher Education and Science.

During a restructuring meeting with the Coordinating Committee for Economic Cooperation with African States, President of the Russian Chamber of Chamber and Industry, Sergei Katyrin, said

“the primary task now to accelerate Russia’s economic return to African continent, from which we practically left in the 90s and now it is very difficult to increase our economic presence there in Africa.”

According to Katyrin, Russia’s economic presence in Africa today is significantly inferior in comparison to the positions of leading Western countries and BRICS partners.

“It’s time to overcome this yawning gap. Today, we face a difficult task to ensure the activities of Russian entrepreneurship on the African continent in the new conditions, taking into account all the consequences of the coronavirus pandemic.”

Katyrin stressed the necessity to resolve financial mechanism for business and for infrastructural projects.

“We need a state financial mechanism to support the work of Russian business in Africa otherwise it will be very difficult to break through the fierce competition of Western companies with such support. We need to focus on those areas where you can definitely count on success,” he told the meeting.

READ more: Russia’s Financial Strategy for Africa

 

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