Russia’s presence in African economic life has been essentially negligible since the political transition of 1991, especially in comparison with China’s growing involvement and the traditionally strong positions of US and other Western capital. Here, I will examine the areas in which Russian capital has been able to expand its presence in Africa. This subject has become increasingly relevant since 2014, when sanctions imposed by Western states began to make it harder for Russia to acquire certain import goods, such as agrarian products (e.g. fruit, vegetables and meat). If these sanctions continue to be enforced over the long term, which seems to be the case at present as the European Union (EU) extended their duration beyond 2019, Russia might be compelled to seek new distribution channels. Moreover, the diversification of its export markets has become an increasingly important economic goal for Russian capital. Furthermore, in addition to Western sanctions, oil prices – which collapsed in 2014 and have continued to be volatile, leading to a financial and economic crisis in Russia, including a nose-dive in the value of the rouble – have put Russian policy-makers in an extraordinarily difficult position (Havlik 2018). Under these unpredictable global circumstances, Russian capital will be compelled to find new partners and outlets for its products in Africa, given that the demand for capital and technology from sources other than China and the West is likely to grow in many of the countries of that continent. It is thus in Russian capitalists’ interest to expand their market outlets in order to compensate for the oil price swings and the resulting erosion of foreign exchange funds, while some of the burgeoning African ruling classes stand to benefit from an amelioration of their technological and capital dependency and a diversification of their suppliers. But Russia is returning to Africa not out of necessity, because sources of minerals in Russia are still plentiful, but because it is now in a strong enough geopolitical position to use its expertise to enhance its own economic performance. For this purpose, Vladimir Putin, President of the Russian Federation, seeks to build a new power bloc in Africa (Gopaldas 2018). This is most visible in the Central African Republic (CAR) where UN-backed Russian military assistance helps to shore up a friendly government. These mutual, though asymmetric, benefits could also be enhanced by the fact that even today, the heritage of the Soviet era still has the potential to contribute to the development of such military-economic ties in many African countries (Olivier and Suchkov 2015). The question addressed here is whether this asymmetrical, interdependent economic relationship provides any potential for the modernisation of African countries, or whether Russian cooperation in some African countries is now taking place on such a scale as to influence political decisions and social policy in favour of resource exploitation for Russia’s exclusive benefit, and against local socio-economic development. This Briefing is not a full-fledged investigation into Russia’s involvement in African countries’ economic and political lives, and thus will not provide a clear answer to the question posed above but will provide some telling examples that show how historical economic dependencies continue.
With the disintegration of the Soviet Union, African–Russian economic cooperation collapsed almost completely. The transformation of the Russian economy brought this relationship to its nadir in the 1990s, though the end of that phase initiated a new chapter in the relations between the two regions. Starting in the 2000s, a gradual reopening made it possible to renew old relationships and fill them with new content. The mid 2000s brought a spectacular turn in African–Russian trade, which was reinforced by four Russian presidential visits after a decade without any such meetings. Various groups of Russian capitalists began to invest in Africa, and although this activity represented genuine growth in comparison with the low point of the 1990s, even today African–Russian commerce has not returned to pre-1991 levels, either in goods or investments. Nonetheless, Russia and Africa experienced a 185% growth of their investment and trade between 2005 and 2015, according to UN Comtrade. In gauging the possibilities for expanding such links, it is worth noting that Russian trade and investment have been concentrated in a narrow field, traditionally connected to the energy and mining industries, though Russian enterprises are expected to compete in a wider range of sectors in the future (Olivier and Suchkov 2015, 151). In addition to the financial sector, Russian capital has already been invested in African telecommunications and manufacturing. Thus, my hypothesis is that Russian capital and the ruling elites of the African countries might find common ground in a desire to mitigate their dependence on Chinese and Western capitals, as both exhibit an increasingly repressive and exploitative presence in the economic lives of many African countries.1 This Briefing will explore the systems of economic linkages, covering a still relatively narrow range of sectors, in order to identify those areas which could provide the basis for an expansion of African–Russian economic relations in the coming years.
Historical background
Russia’s rich relationship with Africa dates back to the time of the tsars. For geopolitical and ideological reasons, the Soviet Union did not attempt to build up a system of African colonies, though during Tsarist Russia there had been several unsuccessful colonial attempts.2 Official relations first intensified following the liberation of the African states, especially in the 1950s. One important turning point in this process was the death of Joseph Stalin in 1953, which led to a rapprochement between the leaders of the socialist bloc – Nikita Khrushchev, First Secretary of the Communist Party of the Soviet Union, and Josip Broz Tito, Prime Minister of Yugoslavia, one of the founders of the non-aligned movement. This reconciliation opened the way for Soviet diplomacy with territories which had recently liberated themselves from the colonial system. For example, one sign of the good relations that the Soviets cultivated with African national elites was that representatives of the short-lived pan-Africanist movement, the so-called Casablanca Bloc (Egypt, Algeria, Ghana, Guinea, Mali, Sudan, Morocco and Libya), were invited to the 22nd Congress of the Communist Party of the Soviet Union in 1961 (Bervoets 2011). Another memorable moment in the relationship between progressive African governments and the Soviet Union was Tanzanian president Julius Nyerere’s trip to the Soviet Union in 1969.
During the Cold War, the Soviet Union involved itself in numerous military conflicts on African territories. The most memorable instance of the political contribution was the role it played in the Suez crisis in 1956. The Soviets also supported FRELIMO (the Mozambique Liberation Front) in the war of independence it launched in 1964. Hundreds of Cuban troops took part in Angola’s war of independence in 1975–76, although the Soviet Union was not directly involved in that.3 Mengistu Haile Mariam, the leader of the 1974 revolution in Ethiopia was also the beneficiary of similar military assistance; the Soviet Union supported his dictatorship until 1989 (Yimam 2013). History also records several unsuccessful Soviet interventions, including the military support extended to Patrice Lumumba during the Congo Crisis of the early 1960s, as well as the coup d’état in Ghana in February 1966, when Kwame Nkrumah was overthrown with the help of the United States. It is also worth recalling Egyptian leader Gamal Abdel Nasser’s efforts to exploit the discord between the superpowers. Even so, the Soviet Union maintained good relations with the theoretically neutral state of Egypt throughout the 1950s and 1960s. This is also attributable to the fact that even though the construction of the Aswan High Dam had initially been supported by the British and the Americans, the project was launched with Soviet loans and technology in 1958, after the conclusion of the Suez crisis (Frank 1977).
The Soviets cultivated explicitly hostile relations with regimes they considered to be allies of the imperialist West, such as those of Mobutu Sese Seko, the dictator of Zaire, and the apartheid government of South Africa. Despite their ideological opposition, Pretoria and Moscow often negotiated agreements related to markets for important raw materials, including price controls on diamonds, gold and platinum (Filatova and Davidson 2013). Numerous African countries received Soviet military aid and other forms of material assistance. Between 1960 and 1991, roughly 50,000 African students studied at Soviet universities, and approximately 200,000 participated directly in Soviet military training exercises. However, by the 1980s, due to economic hardship, the Soviet leaders became concerned about overreaching their economic influence in the global South. For example, they refused Mozambique’s attempt to join the Council for Mutual Economic Assistance (Comecon) in July 1981.
The Soviet legacy is still Russia’s most important present-day link to many African countries, insofar as the economic and political leaders of these countries have connections to the Soviet Union’s institutional past (Pham 2010). The disintegration of the Soviet Union ended an era, and its relations with Africa remained almost completely frozen for nearly a decade and a half. The collapse happened with such unexpected speed that several projects which had been launched in the Soviet period were left unfinished, even some which were already 90% complete. One notable example is the Ajaokuta Steel Mill in Nigeria, the completion of which has been a matter of competition between Russian and Chinese construction companies in recent years (Bello 2013). According to Kupriyanov (2005), economic difficulties forced the Russian Federation, which arose from the ashes of the Soviet Union, to reduce its diplomatic presence: it closed nine embassies and three consulates in Africa. Of the 20 African cultural centres maintained by the Soviet Union, 13 have closed their doors (Kupriyanov 2005; Arkhangelskaya and Shubin 2013). As of 2016, there are 40 Russian embassies in Africa, and 35 African states maintain embassies in Moscow (The Economist 2019).
The neoliberal economic shock therapy Russia introduced in the 1990s, along with the economic, social, and cultural transformation which followed from it, resulted in a temporary suspension of African–Russian relations. In 1990, commercial trade between Africa and the Soviet Union still totalled US$2.7 billion, but by 1994, the corresponding figure for the Russian Federation had dropped to US$740 million. The Russian economy reached its low point by the middle of the 1990s: African–Russian trade would continue to stagnate for close to a decade thereafter – there were no substantial investments to speak of. Any renewal of this relationship was also complicated by the fact that in 1998, Russia was formally accepted as the eighth member of what was then the G7 + 1,4 certain European members of which were still regarded as colonisers in numerous African countries (Solodovnikov 2006; Jordan 2010). The transitional period associated with President Boris Yeltsin came to an end in 2000 with the appearance of his successor, Vladimir Putin. The successes of the Russian state under Putin were based on a realignment of various capitalist class alliances. These included the former comprador oligarchy which had captured Russia’s extractive export industries, and the newly rising national bourgeoisie in other industries, such as defence and manufacturing. Putin himself represents this complex class compromise among the highly fragmented Russian capitalist interest groups. Since the consolidation of Putin’s state, Russian capitalist classes have made serious efforts to transform much of Russia’s international relations, including with African countries. Since the 2000s, Russian capital has been in the process of recovering its geopolitical aspirations, even when doing so has required it to confront Western powers.
The resumption of diplomatic relations
After a gap of 15 years, Russia’s head of state first returned to sub-Saharan Africa in 2006: Vladimir Putin travelled to South Africa, as well as several North African countries (Morocco, Egypt, Algeria and Libya). Not long after that visit, within the framework of a G8 summit, Russia forgave US$16-billion-worth of debt which African countries had racked up over a period stretching back to Soviet times. By 2012, Russia had completely forgiven all US$20 billion of this debt. Debt forgiveness was an important step in African–Russian rapprochement; it signified that this relationship would be rebuilt on a new foundation. In 2009, Russian president Dmitry Medvedev paid visits to a number of African countries (Egypt, Nigeria, Angola and Namibia), accompanied by 300 Russian business people. In a number of ways, 2009 represented a turning point in Russia’s foreign relations. In June of that year, Ekaterinburg hosted the first BRIC (Brazil, Russia, India and China) summit, to which representatives of African states were also invited. In 2012, Russia forgave another portion of African debt. In 2013, Ekaterinburg also served as the host city for the first African–Russian economic forum, during which 100 delegates from more than 40 African countries visited the Ural region.
In the interests of developing African–Russian relationships, Russian and African economic elites, under the direction of the state-controlled Vnesheconombank (Bank for Foreign Economic Affairs) and with the participation of the Chamber of Industry and Commerce of the Russian Federation, established AfroCom, a committee designed to coordinate sub-Saharan African economic relations. AfroCom is now the most important state institution for managing African economic diplomacy in Russia. The director of Vnesheconombank also serves as the head of AfroCom. Since 2012, one subsidiary of Vnesheconombank has also been extending export credit guarantees to Russian firms which invest in Africa (Olivier and Suchkov 2015).
The Russian state is not currently particularly active in the area of international financial assistance in comparison to China or the United States. According to Tatyana Deych (2011), there could be institutional reasons for the targeted allocation of Russian funds. When Dmitry Medvedev visited Nigeria’s capital, Abuja, in 2009, he promised that debt forgiveness would be accompanied by increases in aid and other financial transfers, though little such activity has come to pass, probably due to the crisis which has since affected the Russian economy.5 In comparison, China and the United States are much more active in their financial assistance to Africa. Between 2000 and 2014 the US provided US$106.7 billion in aid according to the AidData, a US-based research group. Their estimate shows that China in the meantime allocated some US$121.6 billion, although part of it does not meet standard international definitions of aid.
High-level political meetings continued after 2013, first at the African–Russian economic forum in Ekaterinburg, and then at the BRICS (the added S because South Africa had joined the BRIC bloc) summit arranged by the South African president in Durban. This was attended by Vladimir Putin, then beginning his second term as Russian president. Thus, after a gap of 15 years, the Russians paid four presidential visits to Africa in the course of 12 years, between 2006 and 2018. During the fourth visit at the BRICS summit in Johannesburg in July 2018, President Putin hinted that Russia would organise the first Russia–Africa summit in Sochi by the end of 2019. Like its fellow BRICS member states, Russia has actively used such meetings as opportunities to advance its geopolitical agenda, which Stephanie Wolters described as ‘bargaining support for Russia’s interest in multilateral institutions in return for UN Security Council vetoes’ (Gopaldas 2018). However, neither of the two important foreign policy documents dating from Putin’s second term as president – the Russian National Security Strategy issued in 2015 (Russian Federation 2015) and the Foreign Policy Concept of the Russian Federation approved in November 2016 (Russian Federation 2016) – devotes much space to the sub-Saharan region.
According to foreign policy experts, Russia, although it now pays substantially more attention to Africa than it did during the period before 2000, has done little to strengthen its ties there; thus, it no longer seems that developing its relationships with African countries is particularly high on its list of priorities. These include renewal of scholarly links: today, 13 research groups operate as part of the Institute for African Studies of the Russian Academy of Sciences, home to roughly 100 individual researchers. The Institute finances numerous foreign-language publications on Russian–African themes, notably on the subject of energy.
Economic links
Russia’s economy, like those of the other Eastern European states, went through a process of neoliberal restructuring in the 1990s. In the early part of that decade, the dissolution of Comecon led to a drop in the volume of Russia’s foreign trade with Africa. Russia was forced to seek financial assistance and to restructure its economy by means of ‘shock therapy’. As a consequence, Russia found itself in competition with some African states in the international financial markets. The shock therapy resulted in the privatisation of a wide range of state enterprises and a reduction in the role state institutions played in the economy. Despite this (or perhaps precisely because of it), the Russian economy suffered serious damage during the southeast Asian crisis of 1997–98 (Gould-Davies 2016). International investors withdrew a significant quantity of resources from rouble-denominated financial instruments, which precipitated a banking crisis and a temporary partial suspension of debt-service payments. After the 1998 crisis and the Russian default, however, the Russian economy began to stabilise. By April 2014, the country had accumulated US$486-billion-worth of foreign currency reserves in its sovereign wealth fund (SWF) that had been building up since the early 2000s. The SWF allowed Russia to follow a very conservative monetary policy and to promote a strong rouble, backed by the fund, which helped to avoid the harshest effects of the 2008–09 world financial crisis. One crucial element of this recovery was the production and export of raw materials (principally petroleum and natural gas), which were sold primarily to member states of the EU. Economic stabilisation was accompanied by the assumption of a more significant geopolitical role and a reinvigoration of Russia’s foreign trade relations not only in the European and Eurasian regions, but with some African countries as well. And although the world financial crisis, and the drastic reduction in world trade which accompanied it, temporarily diminished African–Russian commerce in dollar-denominated nominal terms, a post-crisis upswing meant that the value of the latter grew by a factor of 15 over the course of 20 years, from US$740 million in 1994 to US$17 billion in 2017.
Foreign trade
The volatility of this trade volume is not coincidental, insofar as African–Russian commerce is characterised by numerous anomalies. Its value increased by a factor of 10 in the decade before the 2008 crisis, and yet despite this increase, African countries’ share of Russia’s total import volume continued to be tiny. Likewise, in comparison with other world powers, Russia’s share of Africa’s total import volume was also minuscule. As Figure 1 shows, in 2017, for example, the value of the goods traded between Russia and Africa was less than a third of that for trade between the US and Africa, 10% of that between China and Africa and just over 5% of that between the EU and Africa, while in 2017, the volume of Africa’s share represented less than 3% of Russia’s total trade, which is valued at US$587.4 billion.
Trade with Africa between 2006 and 2017 (Russia, China, USA, EU, in US\(billions). Source: author’s compilation, based on data from Eurostat, Federal Customs Service of Russia, Ministry of Commerce PBOC, US Census Bureau and UN Comtrade.
Another characteristic is the geographical concentration of this trade. Almost 78% of Russia’s total foreign trade with Africa was conducted with North African states (Algeria, Egypt, Libya, Morocco and Tunisia). A further statistical country breakdown shows that 90.6% of Russia’s imports from Africa originated from 10 countries in 2017 (e.g. starting with the biggest exporter, the Republic of South Africa, Morocco, Egypt, Tunisia, Ivory Coast, Kenya, Ghana, Malawi, Zimbabwe and Tanzania). The sub-Saharan region’s share of Russia’s total trade with Africa in 2017 was US\)3.98 billion or 23.4%. Moreover, this region has also been marked by a form of geographical concentration in relation to trade with Russia: only 10 sub-Saharan countries’ trade volume exceeded US$100 million (see Table 1).
| Russian exports | Russian imports | Trade balance | ||||
|---|---|---|---|---|---|---|
| 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | |
| Algeria | 3,963,404 | 4,621,195 | 8225 | 9058 | 3,955,179 | 4,612,137 |
| Angola | 567,916 | 119,664 | 15 | 20 | 567,901 | 119,644 |
| Benin | 1666 | 9923 | 27 | 25 | 1639 | 9898 |
| Botswana | 21,249 | 18,190 | 2 | 532 | 21,247 | 17,658 |
| Burkina Faso | 6418 | 17,484 | 98 | 121 | 6320 | 17,363 |
| Burundi | 6335 | 5606 | 1181 | 1363 | 5154 | 4243 |
| Cameroon | 46,669 | 62,494 | 3808 | 4157 | 42,861 | 58,337 |
| Cape Verde | 938 | 3592 | 1 | 0 | 937 | 3592 |
| Central African Republic (CAR) | 883 | 2385 | 21 | 5 | 862 | 2380 |
| Chad | 379 | 1974 | 4 | 12 | 375 | 1962 |
| Congo, Democratic Republic | 22,294 | 18,262 | 228 | 248 | 22,066 | 18,014 |
| Congo, Republic | 7949 | 22,648 | 205 | 179 | 7744 | 22,469 |
| Djibouti | 56,382 | 17,142 | 0 | - | 56,382 | 17,142 |
| Egypt | 3,784,423 | 6,217,415 | 374,170 | 505,617 | 3,410,253 | 5,711,798 |
| Equatorial Guinea | 1085 | 503 | - | 6 | 1085 | 497 |
| Eritrea | - | 2768 | 49 | 2 | –49 | 2766 |
| Ethiopia | 194,534 | 61,428 | 20,627 | 27,666 | 173,907 | 33,762 |
| Gabon | 837 | 1021 | 28,302 | 46,695 | –27,465 | –45,674 |
| Gambia | 3019 | 241 | 11 | 48 | 3008 | 193 |
| Ghana | 202,171 | 135,032 | 57,308 | 75,710 | 144,863 | 59,322 |
| Guinea | 9814 | 17,957 | 989 | 108 | 8825 | 17,849 |
| Ivory Coast | 67,867 | 54,623 | 235,398 | 180,458 | –167,531 | –125,835 |
| Kenya | 129,501 | 201,282 | 137,631 | 137,038 | –8130 | 64,244 |
| Liberia | 1089 | 436 | 220 | 4931 | 869 | –4495 |
| Libya | 73,742 | 135,183 | 0 | 0 | 73,742 | 135,183 |
| Madagascar | 1705 | 2170 | 10,990 | 8437 | –9285 | –6267 |
| Malawi | 9923 | 9854 | 66,108 | 65,431 | –56,185 | –55,577 |
| Mali | 17,125 | 94,060 | 653 | 6320 | 16,472 | 87,740 |
| Mauritania | 24,049 | 14,626 | 10,629 | 11,890 | 13,420 | 2736 |
| Mauritius | 6176 | 4513 | 7245 | 6870 | –1069 | –2357 |
| Morocco | 724,793 | 894,882 | 567,021 | 568,248 | 157,772 | 326,634 |
| Mozambique | 41,176 | 70,926 | 33,946 | 21,387 | 7230 | 49,539 |
| Namibia | 23,146 | 1446 | 1000 | 554 | 22,146 | 892 |
| Niger | 211 | 1542 | 16 | 963 | 195 | 579 |
| Nigeria | 379,874 | 385,945 | 14,577 | 44,989 | 365,297 | 340,956 |
| Rwanda | 12,227 | 20,442 | 2612 | 2271 | 9615 | 18,171 |
| Senegal | 76,890 | 254,354 | 5687 | 6882 | 71,203 | 247,472 |
| Seychelles | 5571 | 7847 | 1384 | 1834 | 4187 | 6013 |
| Sierra Leone | 2215 | 1523 | 419 | 295 | 1796 | 1228 |
| South Africa | 196,145 | 203,826 | 521,765 | 628,182 | –325,620 | –424,356 |
| Sudan | 231,586 | 437,777 | 348 | 788 | 231,238 | 436,989 |
| Swaziland | - | - | 1055 | 554 | –1055 | –554 |
| Tanzania | 79,148 | 149,831 | 48,549 | 48,168 | 30,599 | 101,663 |
| Togo | 23,213 | 56,574 | 5 | 5 | 23,208 | 56,569 |
| Tunisia | 355,627 | 375,457 | 110,329 | 135,659 | 245,298 | 239,798 |
| Uganda | 28,420 | 63,178 | 14,770 | 27,931 | 13,650 | 35,247 |
| Zambia | 569 | 334 | 13,329 | 11,229 | –12,760 | –10,895 |
| Zimbabwe | 8600 | 2482 | 58,415 | 50,588 | –49,815 | –48,106 |
| Total | 11,418,953 | 14,802,037 | 2,359,372 | 2,643,474 | 9,059,581 | 12,158,563 |
Source: Russian State Customs Office.
African–Russian trade is also characterised by another form of imbalance. Russia exports substantially more to Africa than it imports from it; in addition, Russia’s trade surplus with Africa began to exhibit rapid growth in the 2000s. As Table 2 shows, the value of this surplus was still only US\)800 million in the year 2000, but by 2013 it had increased almost sixfold to US$4.6 billion, and by 2017 it was 15 times that of 2000, at US$12.2 billion. This growing trade gap has presumably been fuelled by Africa’s burgeoning consumer markets and increases in the consumption of Africa’s middle classes, in addition to the significant and growing arms sales.
| Turnover | 1990 | 1994 | 2000 | 2006 | 2009 | 2013 | 2016 | 2017 |
|---|---|---|---|---|---|---|---|---|
| Total | 2.7 | 0.74 | 1.6 | 3.3 | 5.7 | 9.6 | 13.8 | 17 |
| Russian exports | n.a. | n.a | 1.2 | 2.3 | 4 | 7.1 | 11.42 | 14.8 |
| Russian imports | n.a. | n.a | 0.38 | 1 | 1.7 | 2.5 | 2.4 | 2.6 |
| Trade balance | n.a. | n.a | 0.8 | 1.3 | 2.3 | 4.6 | 9 | 12.2 |
Note: n.a.: not available
Source: author’s compilation.
The commodity structure of this trade is also relatively concentrated. Russia’s imports and exports are both dominated by semi-finished goods and raw materials. According to the African Development Bank (Barka and Mlambo 2011), consumables like cacao, tobacco and coffee made up 42% of Africa’s total trade with Russia. Petroleum derivatives, as well as other minerals and metals, accounted for another 23%, manufactured goods for 18%, chemical products for 9%, and various means of transport (military vehicles, for example) for 6% (see Figure 2). Russia’s primary exports were chemicals, wood, petroleum derivatives and cereals (see Table 3). The shipment of military equipment is detailed in the next section.
The commodity structure of Russian–African trade, 2009. Source: African Development Bank (Barka and Mlambo 2011), UN Comtrade.
| Egypt | Nigeria | Tanzania | Ethiopia | South Africa | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | |
| Commodity | ||||||||||
| Total Russian exports | 2500 | 100 | 268 | 100 | 100 | 100 | 46.2 | 100 | 290 | 100 |
| Oil products | 241 | 9.64 | 30.9 | |||||||
| Equipment | 14.3 | |||||||||
| Chemicals | 357 | 14.28 | 56 | |||||||
| Wood | 345 | 13.8 | ||||||||
| Iron ore and ferrous metals | 254 | 10.16 | ||||||||
| Fertilisers | 141 | 52 | 30 | 30 | 15.4 | 33.3 | ||||
| Wheat, cereals | 63 | 63 | 124.4 | 42.8 | ||||||
| Total Russian imports | 444 | 100 | 31.2 | 100 | 68.2 | 100 | 22.4 | 100 | 78.2 | 100 |
| Vegetables | 101 | 22.7 | ||||||||
| Fruit | 252 | 56.7 | ||||||||
| Coffee, tea | 11 | 16.1 | 9.3 | 41.5 | 39* | 4.98 | ||||
| Cocoa | 26.7 | 85.5 | ||||||||
| Tobacco | 35 | 51.3 | ||||||||
| Minerals | 146 | 18.6 | ||||||||
| Iron and precious metals | 31 | 3.96 |
Note: *Total beverages
Source: Korenyasov (2015b).
The arms trade
The defence industry is a major exporter in Russia because it exhibits a comparative advantage in the global arms trade. Russia is the second largest exporter after the United States globally, and the first for Africa, surpassing other arms exporters by a large margin. According to estimates from the Stockholm International Peace Research Institute (SIPRI), roughly 39% of Africa’s total weapons imports between 2013 and 2017 came from Russia. In comparison, China’s share was 17% and the US share was 11% for the same period. Another estimate by the British think tank Chatham House calculates that approximately 3% of Rosoboronexport, the subsidiary of the main state-owned arms exporter Rostec (formerly known as Rostechnologii), went to African countries (Deutsche Welle 2018).
Algeria purchased the lion’s share, having ordered a wide variety of equipment worth US$7 billion. Russia also delivered US$1.3-billion-worth of arms to Egypt, and the Ugandan military purchased dozens of Sukhoi-Su jets from Rosoboronexport at an estimated price of US$744 million. Military deliveries worth US$550 million went to Ethiopia. According to American security policy expert J. Peter Pham (2010), who is the director of the Atlantic Council’s Africa Center, Russian arms exporters – both state-owned and state-backed enterprises such as the Kremlin-related Wagner Group – are confronted by a strategic dilemma. Their largest potential markets continue to be China and India, yet both of those countries have achieved a great deal of technological development in recent years and are already among Russia’s most important competitors in Africa.
Further growth in Russian arms exports has also been hampered by a number of other obstacles; for instance, international embargos regularly hobble its most important African partners. In 2008, despite a UN embargo, Russia sent MiG fighter jets to Omar al-Bashir’s Sudan (McGregor 2009; Smirnova 2015), though it was not willing to deliver the equipment Libya had ordered during the embargo against the Muammar Gaddafi regime. Russia’s most recent geopolitical manoeuvres have taken place in the CAR, where the UN has approved Russian deliveries of military equipment despite the fact that the CAR has been under a UN embargo since 2013. Russia presumably signed undisclosed bilateral agreements with the CAR government when President Faustin-Archange Touadéra visited Saint Petersburg to meet Vladimir Putin at an economic forum in April 2018. Mathews and Losh (2018) reported that the private security firm Wagner Group (the alleged Kremlin-related provider of security personnel for Touadera) had probably gained informal mining concessions in regions controlled by rebel groups in the CAR. As the Oxfam report concluded (Adeniyi 2017, 3), the presence of an ‘estimated 100 million uncontrolled small arms and light weapons’ in various African countries ‘often exacerbates and elongates conflicts’ (Ibid.); and it notes the high human cost extensively, in terms of injuries and fatalities, internally displaced people and refugees, and gender-based violence.
Foreign trade doctrines
Most experts on the subject agree that since the political transition, Russian economic diplomacy has become much less ideological than it was during the Soviet era.
Russian foreign trade representatives stress that Russian enterprises and officials who represent Russian state agencies weigh their investment decisions primarily according to business-related criteria. Their argument is strengthened by the aforementioned fact that the Soviet Union was willing to negotiate and agree to mutually beneficial price controls with the apartheid regime of South Africa, which it considered an ideological adversary (Filatova and Davidson 2013). According to Keir Giles, a specialist in British and American strategic military planning, Russia unquestionably pursues trade policies consistent with the geopolitical objectives of a world power in the current multipolar system (Giles 2013, 23). One of Russia’s chief geopolitical interests is to increase the dependence of its most important export markets on certain strategic commodities. The most important of these export markets is the EU, which satisfies a third of its energy consumption needs with Russian petroleum and natural gas. According to Giles, Russia’s goal is to maintain this dependence, or even to intensify it. This explains why Russia has tried to acquire an interest in various strategic distribution channels, even though Russia is itself a world market producer of petroleum. It is not a coincidence that Russian energy firms such as Rosneft, Lukoil and Gazprom have been among the most active in North Africa, particularly Algeria and pre-civil-war Libya. In Algeria, for example, Lukoil and Gazprom signed concession agreements for several projects with Sonatrach, the Algerian state oil company. These endeavours raised concerns in the EU (Harding and Hearst 2009) because the Russian state enterprises Gazprom and Lukoil and the Algerian state enterprise Sonatrach would together control as much as 40% of the EU’s petroleum and natural gas imports. According to a report from the Bank of Finland, two-thirds of natural gas imports in EU countries come from Russia and North Africa (Simola and Solanko 2017, 23).
According to those who argue that Russia’s geopolitical goals and trade policies are interconnected, Russian investments are always offered as part of a well-defined package (Pham 2014). In general, such packages include the forgiveness of outstanding debts, energy-sector investments involving concession agreements with Gazprom and/or Lukoil, deliveries of military equipment, infrastructural development related to energy extraction, and the renewal of credit lines initiated by the state-owned Vnesheconombank.
Uganda is a showcase of Russian investment packages: after the army agreed to purchase Russian military jets in 2018, the government signed a contract with RT Global Resources, another subsidiary of Rostec, to build Uganda’s first oil refinery. The project is estimated to cost US$4 billion and, according to the agreement, Rostec could hold a 60% stake in the refinery. Algeria and Libya reached agreements with Moscow on similar packages between 2006 and 2008. Algeria ordered US$7.5-billion-worth of Russian military aircraft in exchange for which Russia wrote off almost US$5-billion-worth of Algerian debt. In addition, Gazprom and Lukoil signed the aforementioned concession agreements with Sonatrach. In 2008, the Gaddafi government ordered US$2.5-billion-worth of military equipment, in exchange for which Russia forgave US$4 billion of Libyan debt.6 Russia’s activities in Libya were underpinned by the oil revenues of that country. Russia was able to renew the relationship with the Tripoli-based Government of National Accord after Gaddafi was ousted from power. For example, Russia supported the Libyan national army while Rosneft signed an agreement with Libya’s National Oil Corporation in 2017. As Chow and Stanley (2018, 5) highlighted, Russia’s military interest and Rosneft commercial interest matched perfectly in post-Gaddafi Libya. It is clear that Russia has been active in territories such as Libya, Syria and the CAR where geopolitical shifts have produced political vacuums and power struggles between old and new powers on the global stage.
According to analysts who argue that Russia’s trade policies are embedded in a broader geopolitical strategy, Russia’s goal is to get African states to back its international policies in the UN General Assembly (Giles 2013; Korendyasov 2015a). Giles, for instance, has argued that in 2008, Russia joined China in obstructing the adoption of a UN Security Council resolution which would have imposed sanctions on the regime of Zimbabwean ex-president Robert Mugabe because the embargo would have harmed Russian and Chinese arms dealers and mining concessions. In August 2012, on a tour of Africa, Russia’s Special Presidential Representative for the Middle East and Africa, Mikhail Bogdanov, and Mikhail Margelov, the chair of Russia’s Foreign Affairs Committee, attempted to persuade the leaders of Ethiopia, Liberia, Madagascar, Uganda and Zimbabwe to support Russia’s intervention in Syria. The tour was followed in early 2018 by another high-level visit from Russian foreign minister Sergei Lavrov, who spent a week in Angola, Namibia, Zimbabwe, Mozambique and Ethiopia. It is important to note that after Mugabe’s resignation in 2017, both Russia and China have become active in engaging with the new Zimbabwean government.7 Even so, Russia has not been particularly successful in its attempts to mobilise African leaders for its geopolitical cause. It has supported various autocratic leaders including Gaddafi, al-Bashir, Mugabe and even Jacob Zuma, all of whom have been removed from power by international forces or domestic political uprisings.
Those who believe that Russia’s trade policies are geopolitically neutral usually call attention to the fact that nearly 40% of the revenue in the Russian budget comes from the export of raw materials, reserves of which will eventually run out, or for which extraction may become less cost-effective. For this reason, Russia feels continually compelled to explore for new deposits. In many cases, these sites are in such distant or otherwise inaccessible locations within Russia that it is cheaper to invest in foreign projects, in Africa, for instance. The essence of the argument is that the Russian government encourages state-owned or Kremlin-linked enterprises such as the Wagner Group to seek foreign concessions because it sees such deals as a more reliable source of future supplies of important raw materials (Chow and Stanley 2018). Africa is ideal territory for such exploration because, according to the estimates in an assessment of global energy resources by the United States Geological Survey (USGS), 15–20% of the world’s petroleum could be produced in Africa by 2020. (This figure is currently 12%, while Africa’s energy consumption accounts for only 3% of the global total.) According to these same estimates, Africa might be home to as much as 9.7% of the world’s proven petroleum reserves and 7.8% of its natural gas deposits (Barka and Mlambo 2011, 5–6).
Investments
It is difficult to establish a precise total value for the investments in Africa which originate from Russia, because its enterprises typically funnel their transactions through intermediary states such as Cyprus (Weiner 2011, 256). The literature concerned with this question provides a range of estimates.8 The previously cited publication by the African Development Bank (Barka and Mlambo 2011) estimates that roughly US$20 billion of Russian capital had reached the continent of Africa. In comparison, investments, mostly private, from the United States totalled US$50 billion in 2017 according to the US State Department and the US Agency for International Development. The larger Russian investments of recent years have varied in size, as shown in Table 4. These funds have typically flown into raw material production and the development of related infrastructure, such as the construction of oil refineries and gas pipelines. The African energy and banking sectors have also continued to be prominent targets for Russian capital.
| Investor company | Host country | Industry | Net value of investment (US$) | First years of investment |
|---|---|---|---|---|
| Alrosa | Angola, Namibia, DRC | Diamond mining, hydroelectric power station | 700–800m | Since 1992 (Angola) |
| Evraz | South Africa | Vanadium exploration, steel production | 1.1bn | |
| Gazprom | Algeria (Sonatrach), Nigeria, Libya, Namibia | Natural gas exploration, pipeline building | 3.5–4bn | 2006 |
| Lukoil | Ghana, Ivory Coast, Cameroon, Sierra Leone, Egypt, Nigeria | Oil production | 2–2.5bn | 2010 |
| Norilsk Nickel | South Africa (Gold Fields Ltd), Botswana (Tati Nickel Mining Co.) | Gold, nickel production | 3–4bn | 2004–2007 |
| Renova | South Africa, Gabon, Mozambique | Manganese, uranium, iron ore production | 1bn | |
| Rosneft | Mozambique, Zimbabwe, Malawi, Algeria | Oil exploration, pipeline building | 0.7–1bn | Under negotiation |
| Rosatom | Egypt, Ghana, Nigeria, Tanzania, South Africa | Nuclear power station, uranium exploration | 1.8bn | Under negotiation |
| Russian Chrom | South Africa, Zimbabwe | Platinum and chrome production | 470m | |
| Rusal | Guinea, Namíbia, South Africa, Nigeria (Alscon) | Bauxite mining, aluminium production | 2bn | |
| Severstal | Burkina Faso, Guinea, Gabon, DRC, Liberia, South Africa | Ferrous metals and steel production | 2.5bn | 2008–2015 |
| Sintez | South Africa, Namibia, Angola | Oil, natural gas, diamond and mercury production | 50m | 2006 |
Source: Korenyasov (2015b).
Rosatom, Russia’s State Atomic Energy Corporation, for example, has signed or has been trying to sign preliminary agreements to build nuclear power plants in several African countries. Otherwise, apart from in South Africa, there are no nuclear facilities in operation on the continent, but Rosatom has concluded a US$30-billion agreement to construct a nuclear plant in Egypt (Chow and Stanley 2018, 5). In 2014, Rosatom signed a memorandum with Jacob Zuma to build a new South African nuclear station worth an estimated US$50 billion. Given Zuma’s resignation and the resultant erosion of the power of investors connected to Zuma, such as the Gupta brothers, the new South African government might suspend its cooperation with Rosatom.
A larger wave of Russian capital successfully arrived in Africa after President Dmitry Medvedev’s 2009 tour of the continent. The stated goal of his four-day trip was to promote Russian technology and identify opportunities for Russian firms to get involved in African raw material production. In Egypt, negotiations concerning the construction of the aforementioned nuclear power plant were initiated. Russian energy companies made efforts to sign concession agreements with Egyptian firms which resembled their earlier deals in Libya and Algeria. In 2017 Rosneft signed a 1.1-billion-dollar deal to acquire a 30% stake in a large natural gas field, Zohr, Egypt. Egypt’s geographical position makes it a strategically important distribution channel. In Nigeria, Gazprom negotiated an important agreement with the Nigerian state oil company to participate in the trans-Saharan gas pipeline project in 2009 (Cohen 2009), the goal of which was to ship Nigerian natural gas to Algeria, and from there to its final consumers in Europe. Gazprom dedicated US$2.5 billion to the exploration of two Nigerian natural gas deposits, while Rosneft started collaboration with Nigerian Oranto Petroleum to explore 21 oil assets in 17 African countries in 2018. One interesting element of the latter project was that the transactions would be settled not in US dollars but in Russian roubles and Nigerian naira (Oil Review Africa 2018).
Even before Medvedev’s visit, Angola was one the most important destinations for Russian capital, and not simply because of the volume of capital arriving there, but because – as emphasised by Korendyasov – it is in Angola that Russian capital has been put to the greatest diversity of uses (Korendyasov 2015a). In 1992, soon after the disintegration of the Soviet Union and the end of the decade-long Angolan civil war, Alrosa, the world’s largest diamond-mining company by volume, listed on the Moscow Exchange, had already opened a diamond mine there. In 1998, the Angolan president visited Moscow, where the Russians forgave the debt Angola had inherited from the Soviet era. In 2006, Gazprom made one of its first investments in Africa, putting US$100 million into a production venture in Angola. Russian financial and industrial capital has also shown up in Angola since 2009. The majority-state-owned Russian VTB Bank established a branch in Luanda under the name VTB Capital (later Banco VTB África SA) and organised Angola’s first international bond issue (Galouchko 2013). VTB underwrote half of the two-billion-dollar issue. VTB Bank has been active in other African countries as well. Its most infamous incident was its involvement, along with Credit Suisse, in Mozambique’s ‘tuna bond’ scandal: the revelation of the ‘secret debt’ of US$2 billion pushed Mozambique into a debt crisis in 2016 and, while Credit Suisse has been sued by the new Mozambique government, VTB Bank managed to settle the dispute and restructure the credit, which investigative journalists suspect was due to Russian foreign minister Lavrov’s visit to the country in 2018 (Frey 2019).
With regard to industrial investments, it is worth mentioning the role of telecommunications; financed with a US$327 million investment from a Russian banking consortium, AngoSat, the Angolan telecommunications company, started building a satellite system in 2009, due to be operational by 2016. The first satellite, AngoSat-1, was finally launched from Baikonur Cosmodrome in late 2017, but contact was lost the following day. In early 2018 the Angolan government accepted Russian State Space Corporation Roscosmos’s offer to build Angola’s second satellite, AngoSat-2.9 Newsweek magazine suggested that Moscow’s generosity with the telecommunication project in Angola might be linked to other geopolitical purposes aiming to launch sophisticated cyber-attacks on European and American governmental agencies from African soil (Mathews and Losh 2018). Medvedev’s visit also accelerated investments in Namibia, where a billion-dollar investment enabled a Russian–Namibian joint venture, SWA Uranium Mines, to begin mining uranium and to build two smaller hydroelectric power plants. Both the Angolan and Namibian ventures have used Russian technology.
Conclusion
After the lost decade that followed the world-system change, African–Russian economic relations were rekindled beginning in the 2000s. This reinvigoration has been intensified by the four Russian presidential visits to Africa between 2006 and 2018 and the prospect in 2019 of the first Russia–Africa Summit. The value of African–Russian trade has grown by a factor of 15 over the last 20 years, although because of its low initial value, this figure exceeded a mere US$17 billion in 2017. Raw materials have dominated this commercial relationship. For example, Russia gets a significant proportion of the bauxite it needs for aluminium production, as well as of its imported manganese, from Africa. In addition to mineral wealth, foodstuffs (cacao, coffee and grain) and petroleum derivatives have dominated these exchanges of goods. The structure of this trade is also highly asymmetrical and concentrated. Using the average value of the trade volume from 2016–2017 as a basis for comparison, Russia’s exports to Africa have been seven times as valuable as its imports from Africa. As highlighted above, almost 78% of Russia’s trade volume with Africa is exchanged with North African countries, while in the sub-Saharan region, there are only 10 countries for which the value of Russia’s annual trade volume exceeds US$100 million. With few exceptions (generally in the areas of telecommunications, nuclear energy and finance), Russian capital is almost exclusively connected to raw material production and transportation. Eighteen Russian companies are currently involved in 40 projects in Africa; the largest of these include Alrosa’s investment in Angolan diamond mining, Gazprom’s pipeline construction in Nigeria, Norilsk Nickel’s nickel production venture in Botswana, and Lukoil’s cooperation with its West African partners (Ivory Coast, Sierra Leone and Ghana) in exploring for oil deposits. In addition to ensuring its supply of raw materials, Russia’s investments also serve its geopolitical purposes. Europe is the largest market outlet for both Russian and African raw material exports, and thus acquiring a monopoly over European supplies is a strategic issue for Russia.
In this Briefing, I have attempted to demonstrate that Russian demand for African raw materials will continue to grow in the future, and that Russian exporters, under the influence of external, international constraints, will make ever-greater efforts to diversify their market outlets. The most important sources of external compulsion today are the Western sanctions imposed on Russia in the wake of its war in Ukraine, the international financial pressure driving down the exchange rate of the Russian rouble, and the hectic price of Russia’s most important export, petroleum. The ruling classes of many African countries have long since been constrained by the adverse effects of their countries’ positions in the international division of labour, especially their relative lack of access to capital and technology. Insofar as most of the countries in Africa need to modernise using technology and infrastructure that is cheaper than that available in the West, or that comes with lighter compliance than China demands, as suggested here, this could reinforce a mutual economic dependency between Russian capital and groups of African elites. But the highly asymmetrical nature of this relationship may lead to new economic and geopolitical dependencies, and to Russia’s benefiting more at the expense of the socio-economic development of those African countries with which it develops economic ties.