Much has been made about China’s role and profile in Africa and the factors underlying its activities on the continent. Less debated is the spread and depth of Russia’s contemporary presence and profile in Africa.
There was a strong Russian influence in Africa during the heyday of the Soviet Union. The post-independence governments of Angola, Mozambique, Guinea-Bissau, Democratic Republic of Congo, Egypt, Somalia, Ethiopia, Uganda and Benin at some point all received diplomatic or military support from the Soviet Union.
But this began to change after the superpower started to collapse in December 1991. More than a quarter of a century later Russia’s President Vladimir Putin seems to have new aspirations in Africa. This is in line with his desire to restore Russia to great power status.
Putin places a high premium on geopolitical relations and the pursuit of Russian assertiveness in the global arena. This includes reestablishing Russia’s sphere of influence, which extends to the African continent.
Like Beijing, Moscow’s method of trade and investment in Africa is without the prescriptions or conditionalities of actors like the International Monetary Fund and the World Bank.
Russia is gradually increasing its influence in Africa through strategic investment in energy and minerals. It’s also using military muscle and soft power.
Increasingly, the pressing question is: is the relationship between China and Africa as good for Africa as it is for China? The same question applies to Russia-Africa relations.
Energy and minerals
Interaction between Russia and Africa has grown exponentially this century, with trade and investment growing by 185% between 2005 and 2015.
The fact that 620 million people in Africa don’t have electricity provides Russia’s nuclear power industry with potential markets. Several Russian companies, such as Gazprom, Lukoil, Rostec and Rosatom are active in Africa. Most activity is in Algeria, Angola, Egypt, Nigeria and Uganda. In Egypt, negotiations have already been finalised with Moscow for the building of the country’s first nuclear plant .
These companies are mostly state-run, with investments often linked to military and diplomatic interests.
Moscow’s second area of interest is Africa’s mineral riches. This is particularly evident in Zimbabwe, Angola, the Democratic Republic of Congo, Namibia and the Central African Republic.
In Zimbabwe, Russia is developing one of the world’s largest deposits of platinum group metals.
Russia has also been reestablishing links with Angola, where Alrosa, the Russian giant, mines diamonds. Discussions between Russia and Angola have also focused on hydrocarbon production.Uranium in Namibia is another example.
Russia’s current controversial involvement in the Central African Republic (CAR) began in 2017, when a team of Russian military instructors and 170 “civilian advisers” were sent by Moscow to Bangui to train the country’s army and presidential guard. Shortly after that, nine weapons shipments arrived in the CAR.
Interest in the country has focused on exploring its natural resources on a concession basis. The murder of three Russian journalists in a remote area of the country last year focused the world’s attention on what looked like a Kremlin drive for influence and resources.
Military influence and diplomacy
Russia is the second largest exporter of arms globally, and a major supplier to African states. Over the past two decades it has pursued military ties with various African countries, such as Ethiopia, Nigeria and Zimbabwe.
Military ties are linked to bilateral military agreements as well as providing boots on the ground in UN peacekeeping operations. Combined, China and Russia outnumber the other permanent members of the UN Security Council in contributing troop to UN peacekeeping efforts.
Russia has also been actively supporting Zimbabwe. Shortly after it was reported in 2018 that China had placed new generation surface-to-air missiles in Zimbabwe, Russian Foreign Minister Sergey Lavrov announced that his country was pursuing military cooperation.
Significantly, Zimbabwe’s President Emmerson Mnangagwa has said that his country may need Russia’s help with the modernisation of its defence force during a recent visit to Moscow.
Russia, Africa and the future
Both Russia and China are keen to play a future role in Africa. The difference between these two major powers is that China forms part of the Asian regional economy. This will surpass North America and Europe combined, in terms of global power - based on GDP, population size, military spending and technological investment.
China and India have sustained impressive economic growth over many years. And, their enormous populations make them two world powers of extraordinary importance. Growth prospects for the Russian economy, on the other hand, remain modest - between 1.5% and 1.8% a year for 2018-2010, against the current global average rate of 3.5% a year.
Still, Russia remains a major power in global politics. For African leaders, the key word is agency and the question is how to play the renewed Russian attention to their countries’ advantage, and not to fall victim to the contemporary “geopolitical chess” game played by the major powers on the continent.
Sub-Saharan Africa is among regions in the world projected to record accelerated economic growth in 2019, amid a slowdown in global growth precipitated by heightened trade tensions and rising interest rates in the US.
The International Monetary Fund says that GDP growth in sub-Saharan Africa will rise from 2.9 per cent posted last year to 3.5 per cent this year, and 3.6 per cent in 2020.
The projection is however a 0.3 percentage point lower, blamed partly on the declining crude oil prices, which have plummeted from a high of $85 a barrel and are expected to average $60 this year.
These have significantly impacted growth for oil-producers Angola and Nigeria.
One-third of sub-Saharan economies are expected to post growth above five per cent, raising optimism of impressive performance in a year when external shocks, including trade tensions, rising US interest rates, dollar appreciation, capital outflows and volatile oil prices are expected to continue.
More critically, the nagging challenges of ballooning debt, expanding recurrent expenditures and slowdown in revenue mobilisation will continue to curtail growth.
"Across all economies, measures to boost potential output growth, enhance inclusiveness and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives," says the IMF in its World Economic Outlook 2019 report.
The Fund forecasts that 2019 will not be a good year for the global economy, whose growth is projected to decline to 3.5 per cent from 3.7 per cent last year, largely due to an escalation in trade wars between the US and China.
The US has imposed import taxes on steel, aluminium and hundreds of Chinese products, drawing retaliation from China and other US trading partners like Mexico and Canada.
Other factors include the messy Brexit process, Italy's financial struggles, volatile commodity prices and rising interest rates in the US, which are projected to impact heavily on the global economy
Growth in advanced economies will slow from an estimated 2.3 per cent in 2018 to 2.0 per cent in 2019 and 1.7 per cent in 2020.
Growth in the Euro region is set to moderate from 1.8 per cent in 2018 to 1.6 per cent in 2019, while in the US, it is forecast to remain flat at 2.5 per cent, and decline to 1.8 per cent in 2020.
Growth in Asia is expected to dip from 6.5 per cent in 2018 to 6.3 per cent this year, and 6.4 per cent in 2020, with China's declining from 6.6 per cent to 6.2 per cent due to the combined influence of financial regulatory tightening and trade tensions with the US.
India's growth on the other hand, is poised to pick up to 7.5 per cent from 7.3 per cent last year, benefiting from lower oil prices and a slower pace of monetary tightening, plus easing in inflationary pressures.
In Latin America, growth is projected to recover from 1.1 per cent in 2018 to 2.0 per cent this year, and 2.5 per cent in 2020.
Credit: East African
Taxify, a European-based rival to Uber and the leading app-based taxi-hailing platform in Africa, expects to grow its African business ten-fold over the next two years while it works to dethrone Uber in Europe, its chief executive told Reuters.
Markus Villig said his firm, which has 15 million customers and half a million drivers on its platform in more than 25 countries, was on track for its drivers to rake a combined 1 billion euros ($1.1 billion) from rides this year.
The Estonian firm is looking to add more services and more countries in 2019, he said during this week’s Web Summit conference in Lisbon, without disclosing details. Taxify opened in Lisbon earlier this year.
“We see massive potential in Africa to grow at least ten times in the next two years,” Villig said. “We grew our number of rides ten times in 2017 and will be one of the fastest growing companies in the industry this year as well.”
In May, Taxify secured $175 million in funding from a group led by German automaker Daimler to help its battle against Uber.
As for Europe, where Taxify has sought to capitalise on mounting driver resistance to Uber over pay and other issues to get into new markets, including some abandoned by Uber such as Slovakia and Hungary, Villig is aiming to overtake Uber in both the number of users and rides.
“When you look at other regions in the world you have a local champion win in that place. We want to be that leader in Europe, that’s our focus,” he said.
San Francisco-based Uber is active in more than 80 countries and is the market leader in Europe. It takes around a 25-percent cut of fares from drivers using its app.
Taxify typically charges a 15 percent commission, arguing happier drivers provide a better service.
The company has been working with European regulators to try to amend strict public transport laws and rules, saying consumers benefit from the flexibility and competition brought by taxi-hailing platforms.
To increase flexibility, Taxify is working on different solutions for different types of trips, such as using smaller vehicles for city centres.
An attempt to enter the highly competitive London market ground to a halt last year when transport regulators there denied it a licence to operate. But Villig said the application was “in progress, and we’re working with Transport for London to show that we’re best-in-breed”.
Australia is seeking to join China, UK and Europe in the race to increase business footprints in Africa.
The country’s new position is aided by a new look foreign policy that emphasises partnerships with mutual benefits.
Australia recently held an Africa Week in Perth, where it announced that it will push for mining, trade, education and cultural exchanges and technological advancement programmes in the coming years.
With the USA, UK, China and India all making huge financial offers for projects, Australia is touting joint ventures.
To begin with, it intends to share its technology with African countries that have mineral resources.
The mining sector, it is argued, holds the key for important technological developments; for instance renewable energy, battery storage and communication technologies all rely on a robust mining sector to provide the raw materials.
“We are hoping to create greater economic and social opportunities for African countries, and the people living in them.
These opportunities can be made easier and more accessible through the increased access to technology that the world is creating,” said Western Australia’s mineral minister Bill Johnson.
Source: East African News