Doing Business in Africa: Challenges and Opportunities

KEY CONCLUSIONS

Economic and political conditions are conducive to Russia’s expanded presence in Africa

“Russia is currently developing a comprehensive strategy for its presence on this continent, building comfortable, effective relations with all African countries,” said Farit Mukhametshin, a member of Russia’s Federation Council and Deputy Chairman of the Federation Council’s Committee on International Affairs.

“There is an understanding at the political level. There is an agreement in place at the political level to support business and support the development of economic ties. Now it’s up to […] entrepreneurs,” President of the Russian Chamber of Commerce and Industry Sergey Katyrin said.

“There is no market that is more promising than that of the African continent, and in 2035 it won’t only be a matter of competitiveness, but, to a large extent, survival in the global economy,” said Alexey Repik, Chairman of the Russian-Japanese Business Council, President of Delovaya Rossiya (Business Russia), and Chairman of the Board of Directors of the R-Pharm Group.

 

PROBLEMS

The fragmented nature of cooperation

“Cooperation among entrepreneurs, companies, and business associations has been fragmented thus far. There are sectors where Africa is a very serious partner for Russian enterprises, while success cooperating in the raw materials sector and the energy sector as well as military-technical cooperation has not fully borne out yet,” Repik said.

“Strong ties between potential Russian investors and our enterprises do not yet exist,” said Jean-Marie Ackah, President of the General Confederation of Enterprises of the Republic of Cote d'Ivoire

Lack of information

“Our colleagues in Africa don’t know much about modern-day Russia, the conditions for business, or the skills that Russian enterprises possess today. And we know little about each country in particular. So one of the main objectives, perhaps the most important one at this stage, is information and the opportunity to get to know each other,” Katyrin said.

“If there is no exchange of information, there will be no mutually beneficial cooperation,” said Josue Madjitoloum, President of the National Business Patronage Organization of the Republic of Chad.

“It is crucial for our ideas about doing business with each African country to be translated from the theoretical to the practical plane”, Repik said.

 

SOLUTIONS

Intensify economic diplomacy

“There are a number of positive examples of business diplomacy such as business ambassadors. This mechanism is effective due to the concrete practical goals of the ambassador and his/her immersion in the foreign market. We need to expand the network of business ambassadors with all the countries of the African continent that are interested in doing so,” Mukhametshin said.

“We are talking about cooperation and economic diplomacy to promote trade. It is essential to have business councils where private enterprises are present,” said Richard Ngatia, President of the Kenya National Chamber of Commerce and Industry (KNCCI).

“Business councils are among the most common tools. We have them with 76 countries, and ten of them are located on the African continent. They work quite actively,” Katyrin said.

“We must forge ahead to achieve common goals. We need to define common goals and a common foundation that will ensure the unity of actions by members of business councils and business associations in one direction,” said Johannes Sebulela, Founder and President of the African Entrepreneurs Council.

Create favourable conditions for investors

“When I’m asked how the private sector can ensure investor confidence, my answer is to reduce bureaucratic obstacles. This means having new financial management mechanisms and the ability to borrow money in local currencies. We can use our chamber of commerce in any legal disputes that can be resolved within three months without going to court. As a chamber, we provide certificates of origin. We invite Russian companies to participate in public-private partnerships,” Ngatia said.

“Export credit instruments and work involving the financing of bilateral trade are becoming increasingly important,” Repik said.

Involve small and medium-sized business in cooperation

“True growth in trade should not be achieved through a billion-dollar deal, but through hundreds and thousands of medium-sized projects,” Mukhametshin said.

“In addition to major projects, we need contacts with small and medium-sized enterprises. This will help to provide a new starting point [for cooperation] between enterprises, and this is what will enable us to get to know each other and the context of our markets better and work on a mutually beneficial basis,” Ackah said.

“We are now fighting for the adoption of a law on local content. This law should enable our small and medium-sized enterprises to move forward,” said Agostinho Vuma, President of the Confederation of Business Associations of the Republic of Mozambique.


To participants in the Russia–Africa Economic Forum

Ladies and gentlemen,

It gives me great pleasure to welcome you at the opening of the Russia–Africa Economic Forum.

The rich history of relations between Africa and Russia has never seen an event of a similar scale. Members of government agencies and business community, and experts are meeting at this Forum to substantively discuss the current status and prospects of cooperation and a wide range of topical issues of the world economy.

Today, the countries of Africa are well on their way towards social, economic, scientific and technological development, and are playing a significant role in international affairs. They are strengthening mutually beneficial integration processes within the African Union and other regional and sub regional organizations across the continent.

In recent years, the traditionally friendly ties of partnership between Russia and Africa have gained new momentum, both at a bilateral level and in various multilateral formats. In addition to preserving our past experience of successful cooperation, we have also managed to make significant new steps forward. Trade and investment are growing dynamically, and new joint projects are under way in extractive industries, agriculture, healthcare, and education. Russian companies are ready to offer their scientific and technological developments to their African partners, and share their experience of upgrading energy, transport and communications infrastructures.

I hope that the Forum will help identify new areas and forms of cooperation, put forward promising joint initiatives that will bring the collaboration between Russia and Africa to a qualitatively new level and contribute to the development of our economies and the prosperity of our peoples.

I wish the Forum’s participants fruitful work and all the best.

Vladimir Putin

The Russia–Africa Summit, which is taking place in Sochi on 23–24 October 2019, encapsulates the historically friendly relations between the African continent and the Russian Federation. This Summit carries great significance as it is the first of its kind to emerge during a period of major global and international transformations. In response to the aspirations of the people it is representing, the Summit intends to build a comprehensive framework for expanding Russian–African relations into broader horizons of joint cooperation across different fields.

The African nations and Russia share a common understanding of international relations, based on the principles of respect for the rule of international law, equality, non-interference in the internal affairs of states, and the peaceful resolution of disputes. Both sides affirm their commitment to support multilateral actions to oppose new international threats, be they terrorism and extremism in all their forms, or declining growth rates. The two sides share a firm conviction regarding the importance of developing trade flows and supporting mutual investment in such a way as to ensure security, peace and development for the African and Russian people.

African countries have huge potential and opportunities that will allow them, once efforts to streamline their economies have been achieved, to emerge as real global players. In recent years, the nations of this continent have achieved major successes spanning the political, economic, social and administrative spheres. Africa has flourished in terms of growth over the past decade, reaching a continent-wide growth rate of 3.55% in 2018.

The African Union Summit, which was held in Niger in July 2019, continued the efforts of the African countries and saw the African Continental Free Trade Agreement come into force, along with its operational instruments. The agreement is one of the key objectives of Agenda 2063, an African development strategy that has been created to address the African people’s desire for prosperity and decent living standards.

These successes are opening up wide-ranging prospects for cooperation between African countries and the Russian Federation, and confirm the determination of African governments and their people to cooperate with multiple partners in order to establish mutually beneficial relations.

With this in mind, we express our hopes that the Russia–Africa Summit will help in the establishment of constructive strategic relations, based on partnership between two sides across various fields, and in the service of fulfilling the hopes and aspirations of the African people and their friends in Russia.

President of the Arab Republic of Egypt
Abdelfattah ALSISI