Russia has always prioritized the development of ties with African states, a relationship that is based on decades-old traditions of friendship and mutual aid,” Putin said at a BRICS summit in South Africa in 2018.
Indeed, Russia has historical ties to a number of African governments and is often regarded favorably there due to the Soviet Union’s support of independence movements in the 1960s and 1970s. However, it largely failed to translate this into economic or political influence in subsequent decades.
The connection is still relatively modest: Russian trade with sub-Saharan Africa stood at $20 billion in 2018, Africa trade of $61 billion, and EU-Africa trade of more than $300 billion. A similar disparity exists in amounts of foreign direct investment or overseas development assistance. However, where Russia beats other geopolitical players in Africa is in providing security cooperation and exploiting commercial opportunities arising from it.
The drivers of foreign interest, including of Russia has, in Africa are obvious; the continent may still account for a disproportionately small portion of the global economy, but it is growing fast. It also has often-overlooked political clout, with its 54 sovereign states constituting the largest continental bloc in the UN General Assembly and often showing a degree of unity on how it votes.
Russia has achieved this through a variety of means. It has launched a diplomatic charm offensive, with Russian Foreign Minister Sergei Lavrov making multiple trips to Sub-Saharan Africa throughout 2018 and 2 trips to North Africa already in 2019.
Russian investment in Africa has seen a similar increase, with Russian companies involved in some of the continent’s most significant projects. Russia is also likely to seek to leverage its position as a member of the BRICS (Brazil, Russia, India, China and South Africa) association — and in particular the BRICS’ New Development Bank — to channel funding to Africa. However, its primary route to gain diplomatic influence for Russian companies these strengthening government-to-government relations presents opportunities. These are obvious for Russian state-owned companies developing projects — such as those in Zimbabwe and Angola — financed by Russian credit; a model that African states, which often have a substantial economic presence, are sometimes more comfortable with than the focus on pure private-sector development often pushed by Western partners, and access commercial opportunities is security cooperation. Private-sector Russian companies also benefit both tangibly — through various agreements designed to facilitate trade and investment — and intangibly.
Where this are opportunities, however, there are also challenges. While the fragmentation and fluidity of the geopolitical landscape in Africa has broadly benefitted Russia and Russian companies, volatility always poses risks. Russia has developed strong ties to governments that have allowed it to ride out dramatic political changes in a number of countries.
In this environment, the most important thing any company can do is to properly understand the geopolitical landscape and the host government’s objectives within it. A bid for a large public contract or an operating license or an oil block will not always be judged on purely commercial terms. Many African governments will judge bids for major public contracts on the degree to which the awarding of a contract will advance priority geopolitical relationships.
Those companies that take the time to identify the wider geopolitical and development goals that implicitly or explicitly feed into the government is decision-making, and align their bids with those goals stand a far greater chance of success. Those that can foresee potential volatility in government-to-government relations and take steps to mitigate the risks are far more likely to last. And those that comprehend how growing flows or development finance are pushing African governments to open up previously closed economic sectors and weakening the stranglehold traditional development partners previously held are those that will be able to exploit the opportunities this opens.
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