Monday, 21 December 2015

Why Moscow is banking on Africa to counter America's global dominance

Why Moscow is banking on Africa to counter America's global dominance


Russia’s interests in Africa are manifold. As economic sanctions constrict its trade with the West, Africa is becoming an increasingly attractive investment opportunity.


21.12.2015


Russian President Vladimir Putin meets South African
President Jacob Zuma
 
The setting was the 2007 Munich Security Conference, and Russian President Vladimir Putin has just about enough of what he called “the United States [overstepping] its…borders”. He was trying to ease up to the West anymore when he took a stance; “We are seeing a greater and greater disdain for the basic principles of international law,” he said. “The United States has overstepped its national borders in every way.”
 
This speech did not only become a defining moment of his presidency, but amidst the flurry of flashes and rapid clicks from press photographers at the event, whispers of a new Cold War echoed loudly.
 
Obviously, the declaration sent all analysts; political and economy alike; coming up with all sorts of explanations for what this meant for Russian-American relations, that none paid as much attention to the Kremlin’s important shift.
 
Why Moscow is banking on Africa to counter America's
 global dominance
 
A focus on Africa, it turned out that Moscow was quietly in the middle of an equally important shift, courting a new and unlikely international partner: Africa
 
Russia’s interests in Africa are manifold. As economic sanctions constrict its trade with the West, Africa is becoming an increasingly attractive investment opportunity. At the same time, Africa’s 54 countries represent a political opportunity to relieve Russia’s isolation and build support for its actions in the UN. Finally, Russia’s prominence in Africa lends credibility to its reassertion of world power status. The effectiveness of Russia’s re-engagement policy is still in question, but its progress is becoming increasingly difficult to ignore.
 
Evidently, in recent years, Russia’s unusual relationship with Africa has only kept on strengthening it even new heights as neo-Russian investments across the continent continue to grow at an astounding rate.
 
According to the Atlantic Center’s Africa Center Director J. Peter Pham, between 2000 and 2012, Russia’s trade with Africa increased ten times over. Russia has invested heavily in raw resource megaprojects, signing a $4 billion deal with Uganda in February to build and operate a crude oil refinery and using old Soviet connections, Uganda and Russia sealed a $3 billion energy deal in March 2015, some of the few moves by Russia in Africa.
 
Why Moscow is banking on Africa to counter
America's global dominance


Russia in Ghana – The Numbers and Projections


The volume of Russian-Ghanaian trade in 2010 amounted to US$146 million (exports - $28 million - produce ferrous and nonferrous metallurgy, fertilizer, paper, and imports - mainly cocoa beans, as well as manganese ore and tropical wood - US$118 million).
 
In May 2003, a Ghanaian–Russian Chamber of Commerce was established and Ghana declared interest in attracting Russian investments in transport, energy, agriculture, mining. The Russian side continues to assist Ghana in the training of national personnel. In the higher education institutions of the country, a total of over 2800 educated Ghanaian professionals. In the 2010–11 academic year, 33 students passed (30 - to complete the course and 3 - to graduate school).
 
For the 2011–12 school year for Ghanaian students, Russian academic institutions held 40 scholarships. And currently a partnership between the Institute of Russian Pushkin and the University of Ghana (Legon).

Russia and The Rest of Africa


Overall trade has increased more than tenfold over the past decade or so, with exports jumping from under $950 million to $4 billion, and imports from Africa rising from $350 million to $1.6 billion. For Russia to reclaim its role as a global power after long being seen as a “junior partner” by the West, “it needed to be present in all geographies — and, of course, Africa is an increasingly important one,” says Elizabeth Sidiropoulos, chief executive of the South African Institute of International Affairs, a research organization in an interview with OZY.com
 
Indeed, for most developed countries Africa’s growing economic importance is now impossible to overlook. In the next five years, the continent will be home to eight of the 10 fastest-growing economies, and in the next 15 years its GDP is expected to reach that of Eastern Europe. But there’s also plenty of allure today: It’s already home to some of the largest untapped reserves for minerals, oil and gas in the world.
 
Russian Companies in Africa
 
The rekindling of relations has already had a positive political impact for Moscow.
 
Those features are particularly attractive to Russian companies. Sure, Russia’s sitting on 35 percent of the world’s reserves in mineral deposits, though the bulk of its undeveloped reserves are located in remote areas of Siberia, making them expensive to extract. Getting mineral resources from countries like Angola, South Africa, Guinea and Nigeria — countries now home to major Russian investment projects — is much more profitableAnd with Russia’s reserves of oil and gas plummeting while Europe’s consumption of energy is on the rise, Moscow is also desperately searching for alternative energy sources. In fact, Russian natural gas giant Gazprom has recently partnered with Algeria’s state gas company, which will give Russia control of nearly 40 percent of Europe’s gas consumption.
 
Unlike other countries racing in the new scramble for Africa, Russia has the added advantage of a long-standing history with the continent. Since the days of the Cold War, when proxy battles between the Soviet Union and the United States raged on African soil and African liberation movements fought for freedom from colonial powers, Moscow has built a vast network of political and economic ties to African countries.
 
By the time the Soviet Union collapsed in 1991, it had established 20 cultural centers; launched agreements with 37 African countries on technical and economic assistance, and with 42 countries on trade; educated more than 25,000 Africans in Soviet universities; and trained 200,000 more on the continent. Alumni include the former president of Mozambique and the current presidents of Angola and South Africa. Yet when the Soviet Union dissolved, so too did its political ties with African allies.
 
 
Russia - Africa Trade
 
While growing at a rapid pace today, Russia’s total investment in Africa still lags far behind competitors such as India. China, for one, started courting businesses in Africa a decade before Russia, and has a secret weapon for investing in high-risk places where corruption and political instability are widespread: policy banks. George Ward, former U.S. ambassador to Namibia, says Chinese government officials and financial institutions have provided loans and other assistance that African governments have used for development purposes, “often employing Chinese companies to carry out large-scale infrastructure projects.” With the Chinese government and banks assuming the financial risk, Chinese companies have been encouraged to invest.
 
Still, the rekindling of relations has already had a positive political impact for Moscow. When members of the U.N. General Assembly, a third of which are African countries, overwhelmingly voted to condemn Russian intervention in Ukraine, two of the 10 countries that voted with Russia were in Africa, while a majority of African countries abstained. As investment continues, Putin’s predictions at the Munich Security Conference may just come true: The days of American global dominance are ending, and Russia is yet again making its way to the forefront of international affairs, starting with Africa.


 
By Sena Quashie
Pulse