The Russia-Africa Summit ran from 27 to 28 July under the theme ‘For Peace, Security and Development’ and was attended by 17 heads of state and government, including representatives of 49 of the 54 African nations.
Furthermore, according to WION Live TV News, an amount of 1,2 billion rubles has been set aside for the capacitation and strengthening of African healthcare systems.
South Africa is chairing the Brics group of countries (Brazil, Russia, India, China and South Africa) in 2023 under the theme ‘Brics and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism’.
South Africa will host the leaders of Brazil, Russia, India, and China at the 15th Brics Summit from 22 to 24 August.
The Brics group brings together some 3,2 billion people.
After the United Nations (UN) and the Non-Aligned Movement, Brics is among the largest blocs of countries according to its total population.
According to South African Government News, one of the priorities of the summit is to build a partnership between Brics and Africa to unlock mutually beneficial opportunities for increased trade, investment and infrastructure development.
The Brics summit focuses on opportunities that will generate economic growth on the continent, particularly through the African Continental Free Trade Area (AfCFTA) agreement and infrastructure.
Another strategic priority is strengthening multilateralism, including working towards the real reform of global governance institutions and strengthening the meaningful participation of women in peace processes.
The Brics countries agree that the UN must remain at the centre of multilateralism and be reformed to make it more effective, inclusive, and representative of the global community.
This includes reform of the UN Security Council to ensure that African countries and other countries of the Global South are properly represented and that their interests are effectively advanced.
Furthermore, I see these meetings as twin summits, with the same overall objective to create conditions for a sustainable, equitable and inclusive future.
Against this backdrop, my economic analysis sought to assess the impact of these twin summits on the Namibian economy, and other African nations, and to also provide the basis for evidence-based decision-making and consequently inform macroeconomic policy making.
Africa is in the process of becoming the world’s largest single market via the implementation of the AfCFTA agreement, as a number of countries have enacted reforms to improve business environments and attract private investment.
These reforms and harmonisation under the AfCFTA will make African companies increasingly competitive and promote their integration into global supply chains.
Namibia and African nations would like to capitalise on emerging opportunities to develop and adopt new technologies and put in place the right regulations and investment that will attract the investment needed and better integrate African energy markets trans-continentally and globally.
The value of trade between the two peaked in 2022, according to Russian president Vladimir Putin, coming in at 35%, or amounted to about US$18 billion.
Russia’s economic engagement with the continent further shows that while Russia’s imports from Africa rose to US$4,7 billion in 2022, exports grew to approximately US$32,9 billion.
In addition, China and India have greatly accelerated and diversified their trade relations with Africa.
As an importer of oil and other natural resources, India has diversified its trading partners beyond its traditional East African partners to include Nigeria.
Uranium from Niger, Uganda, and Tanzania is also vital to India’s nuclear power industry.
China is Africa’s largest trading partner, with exports totalling US$164,49 billion, and imports reaching US$117,51 billion in 2022.
While China maintains broad trade relations with 49 African countries, the bulk of trade between China and Africa is concentrated in a few countries.
Angola, South Africa, Sudan, and the Republic of Congo all export oil to China, and make up 70% of African exports to China. The exports to Africa in Brazil decreased to US$879,44 million in June from more than US$1 billion in May of 2023, while imports from Africa in Brazil increased to US$753,15 million in May from US$687,60 million in April of 2023.
For the sake of interest and provoking thought, trade between Russia and Namibia was reduced by about 41% in 2023 due to geopolitical tensions.
The minister of industrialisation and trade, Lucia Iipumbu, indicated that Namibia is working on the modalities to increase bilateral relations in various sectors such as agriculture, mining and healthcare, among others.
Therefore, this reflects potential success, which needs to be reinforced from now on by continuing to strengthen institutions, support political stability, promote democratisation, enhance policy coordination, improve ease of doing business, reduce debt, open financial markets, attract foreign direct investment, facilitate technology transfers, nurture human capital and strengthen corporate governance.
We should understand that not everyone is optimistic about Africa’s ability to fulfil its promise.
Moreover, in a closed economy that does not trade with the rest of the world, too little spending leads to job losses and downward pressure on prices.
Furthermore, the most significant objective these twin summits appear to be working to achieve is a shift away from reliance on the US dollar.
The possibility and prospects of setting up a common single currency based on a basket of currencies of the Brics countries cannot be overruled.
A Brics currency could shake the dollar’s dominance.
Over time, however, if de-dollarisation efforts gain traction, there could be implications for the US economy.
Leaders from both Russia and China have been strongly advocating for a new global reserve currency for several years, and both nations seem determined to break the power the US dollar has over international trade as the US dollar continued to lose purchasing power.
Additionally, some nations are choosing to use their own currencies for oil, like China, Russia and India, among others.
It is beyond any doubt that the introduction of these twin summits implied a very important step forward in the long process towards African integration, not only when seen from an economic point of view, but also politically.
Greater investment from the twin partnership in African countries could enhance business-to-business relations, expand parties’ value chains and promote greater industrialisation.
Therefore, strengthening cooperation would make a significant contribution to the historical success of multilateralism.
Further, deeper engagement significantly strengthens bilateral trade and investment in a more constructive environment.
In conclusion, it requires plenty of energy, patience and political leadership.
However, the objectives of the partnership, the improvement of competitiveness and greater prosperity in Africa are so important that efforts to foster this journey should be intensified.
As a longer-term vision, one should see African integration as a step towards better global cooperation and securing peaceful and balanced development.
- Josef Sheehama has more than 21 years’ banking experience, serving as credit manager, branch manager, and now centralise credit head office at a local commercial bank.