The below article is a slightly edited note by Charles Robertson, global chief economist at Renaissance Capital, that was emailed to the media.
I spent a few days at the St Petersburg Economic Forum – Putin’s big extravaganza (pictures on the social media site that I’m least comfortable with: https://www.instagram.com/rencapman/).
One panel I moderated included the VP of Ivory Coast, the former PM of Kenya, and we looked at Russia’s engagement with Africa. Video link here: https://www.forumspb.com/en/programme/68933/
Big picture – you see Russia reaching out to China, India, the Gulf and now Africa – in a bid to diversify its trading partners and lessen its vulnerability to US/EU trade difficulties.
Russia is now running the biggest trade surplus among the BRIC countries with Africa.
Recognising the benefit of prioritising Africa – as Turkey did as far back as 2005 (Russia’s economy is twice the size of Turkey’s – but its trade turnover with Africa is the same as Turkey’s) – there will be a big Russia-Africa summit in October with Africa.
Note that 78% of Russia’s exports are Morocco, Algeria, Tunisia and especially Egypt, and some of its largest exports by type are food and weapons. There is clearly room to expand trade with the rest of the continent.
Investment is in offshore oil/gas (Egypt, Mozambique, etc), and some minerals. There is little or no economic engagement with some of the poorest countries in the continent, like Central African Republic, Sudan or Madagascar, although it is (purportedly private) Russian involvement in those three that caught the Guardian’s attention last week.
We expect Russia to build links with Africa via a renewed surge in African students to Russia. Remember the number of young people in Russia is dropping by about 40% this decade.
This means many fewer people who might go to university. So foreign students are now filling that demographic gap, and African student numbers have doubled in the past decade.
We expect more Russian involvement in sectors like agriculture (fertilisers), transport, energy, mining, as well as arms exports. Russia now exports $2bn of arms to Africa each year.