Economic Sovereignty of African Countries to Be Discussed at Russia–Africa Forum

In order to fulfil their development objectives and meet the needs of their citizens, countries in Africa are compelled to turn to foreign sources of financing. However, these mainly take the form of credit from international financial institutions and direct loans whereby the creditor imposes socioeconomic and political requirements which limit a country’s sovereignty. Consequently, the actual effect that is achieved may turn out to be the opposite of the stated goals and results in underutilizing the potential for economic growth, deterioration in the quality of this growth, restrictions on the ability to use other sources of funding and, ultimately, limitations on sovereignty.

Sovereign bonds and other forms of borrowing on the capital market account for just a small proportion of African debt, but some countries on the continent are still unable to access this form of financing.

What is the reason for this situation? What is the real cost of concessionary financing from the IMF and World Bank? Why is it that multinational corporations extracting minerals in Africa are able to attract capital on far better terms than countries where these natural riches are located? What will be the consequences for African countries if the current economic model continues to be used? Participants will try to answer these questions during the panel discussion ‘Economic Sovereignty for Africa: Problems and Solutions’, which will be held as part of the business programme of the Russia–Africa Economic Forum on 23 October 2019.

Both African and Russian experts will speak at the session: Russian Deputy Minister of Foreign Affairs and Special Presidential Representative for the Middle East and Africa Mikhail Bogdanov, Chairman of the Supervisory Board of the International Sovereign Development Agency (IASD) Konstantin Malofeev, Director of the Centre for Global and Strategic Studies at the Institute for African Studies under the Russian Academy of Sciences Leonid Fituni, Minister in Charge of Integration and Macroeconomics at the Eurasian Economic Commission Sergei Glazyev, Founder of Africa Development Solutions (ADS) Samba Bathily, Co-Founder of New African Capital Partners Paulo Gomes, and President and CEO of Africa Finance Corporation Samaila Zubairu. They will discuss current approaches to assessing the borrowing potential of African states and offer a recipe for restoring the economic sovereignty and accelerating the development of African countries.

“Real sovereignty begins with economic sovereignty. Nowadays, a lot of the financing received by African countries is granted on unfavourable conditions, and access to capital markets is restricted in one way or another for dozens of countries, in spite of good development potential”, Konstantin Malofeev said. According to estimates by the International Agency for Sovereign Development, African countries have unutilized borrowing potential of over USD 100 billion, while more than USD 200 billion in existing debt could be refinanced under less severe conditions.

The theme of attracting investment while maintaining sovereignty is not only relevant for residents of African countries, but for anyone who is eyeing African markets today. According to experts, Russian companies may be interested in investing in the economy of countries in this region. “In Soviet times, very strong ties were developed with Africa. And despite the fact that our close cooperation was interrupted in the 1990s, we can now talk of a certain increase in cooperation. Russian private business is increasingly showing interest in investing in this region, despite the risks that exist”, Fituni said. “Indeed, the rate of return on invested capital is higher in Africa today than in all other regions of the world.”

The Russia–Africa Summit and Economic Forum will take place on 23–24 October in Sochi at the Sirius Park of Science and Art. The events are being organized by the Roscongress Foundation, and the co-organizers of the Russia–Africa Economic Forum are Russian Export Center and Afreximbank.

A detailed version of the Russia–Africa Economic Forum programme is available at: https://summitafrica.ru/en/programm/.

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