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Africa is vulnerable to economic effects of war despite neutrality

Russian President Vladimir Putin, centre, with African leaders at the 2019 Russia-Africa Summit and Economic Forum in Sochi, on October 24, 2019. The war in Ukraine has not changed plans for the Second Russia-Africa Summit, says the writer. Picture: AFP

Russian President Vladimir Putin, centre, with African leaders at the 2019 Russia-Africa Summit and Economic Forum in Sochi, on October 24, 2019. The war in Ukraine has not changed plans for the Second Russia-Africa Summit, says the writer. Picture: AFP

Published Apr 16, 2022

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By André Thomashausen

Russia’s military intervention in Ukraine since February 24 will affect Africa’s medium-term economic and political landscape, as well as the balance of external powers operating on the continent and the pace of development in key areas.

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Diplomatically, Africa has remained neutral in relation to the conflict. Twenty-six of the 54 African states did not support the UN General Assembly resolution condemning Russia’s use of force in Ukraine.

Eritrea voted against, while 17 other African countries (out of 35 globally) abstained from the vote. These include Algeria, Angola, Burundi, Zimbabwe, Republic of the Congo, Madagascar, Mali, Mozambique, Namibia, Senegal, Sudan, Tanzania, Uganda, Central African Republic, Equatorial Guinea, South Africa and South Sudan.

Eight other nations did not vote: Burkina Faso, Guinea, GuineaBissau, Cameroon, Morocco, Togo, eSwatini and Ethiopia. Egypt, despite expressing its support for the resolution, maintained its co-operation with Russia, who is building Egypt’s four large nuclear power reactors that will provide essential desalination capacity.

No country on the continent has imposed sanctions against Russia, in line with what the USA, Europe and Japan have been demanding. Africa stands with China, India, Pakistan, Saudi Arabia and many other Asian and Middle Eastern and South American countries, preferring negotiations and mediation over arming and supporting Ukraine and isolating Russia.

Notably, Senegal and Tanzania, the economic leaders in Africa during the past decade, have not joined their Western trading partners in condemning Russia. In South Africa, President Cyril Ramaphosa said in Parliament that war could have been avoided if Nato had heeded the warnings of its own leaders and officials over the years that its expansion to the east would lead to greater, not less, instability in the region.

Since the invasion of Ukraine, Russian President Vladimir Putin has held telephone conversations with three African leaders: Senegalese President Macky Sall (who is also the president of the AU until February next year), Egyptian President Abdel Fattah el-Sisi and Ramaphosa.

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According to official statements, the war in Ukraine has not changed plans for the Second Russia-Africa Summit scheduled to be held later this year in South Africa. On March 3, the presidential special envoy for Africa and the Middle East, Mikhail Bogdanov, told Russian news agency TASS that “preparations are under way” and “the dates of the summit have not yet been determined”.

A careful assessment, however, indicates that a cancellation of the Russia-Africa Summit, could be unavoidable. The Russian objectives of a complete “de-nazification” of politics in the Ukraine and a significant change to the country’s Eastern borders, coupled with Western and in particular US intransigence and preparations to put Putin and his ministers on trial at the International Criminal Court, do not offer hope for a de-escalation and renewed interest in Africa.

Africa is vulnerable to the economic effects of the Ukraine conflict because of its dependence on food imports and its poor energy balance. With roughly 16% of the World population and 20% of the World land area, Africa produces only 2.84% of the world’s GDP.

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The lack of productivity is most importantly related to Africa’s energy poverty. The continent produces around 4% of the World’s energy. Between 2015 and 2020, Russia and Ukraine supplied up to 25% of total wheat imports to Africa.

A breakdown by countries shows that some regions are at risk of losing their food security almost entirely when supplies from Russia and Ukraine will fall away. Russia has sharply increased export taxes on wheat, and a total ban on wheat exports can be expected. In Ukraine, the sowing season has been severely disrupted.

Further impacts result from delays in shipments on the Black Sea and Caspian Sea routes. Moreover, a global fertiliser crisis is imminent and it will affect alternative wheat suppliers to Africa, such as France and Brazil.

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Although South Africa will benefit from an increased demand for maize flour in Africa, food shortages and famine in many regions will become unavoidable. The poor condition of transport infrastructure and networks and the scarcity of storage capacities for wheat and other crops will further aggravate the situation.

In addition, many infrastructure rehabilitation projects involving Russian companies and capital are coming to a halt. The other sector where Africa will feel the conflict most is the energy market.

Theoretically, Europe’s decision to reduce purchases of Russian oil and gas should benefit African producer nations such as Algeria, Angola, Ghana, Libya and Nigeria.

However, they will not be able to fill the gap in hydrocarbon demand. It would take at least another five years of massive infrastructure investments to install the capacities needed to enter the EU energy market at the required scale.

Last year, Russia supplied 150 billion m3 to the EU. The current production of Algeria comes to 81 and that of Nigeria to 50 while Qatar produces 171 billion m3, but all that is committed and sold. The 150 billion m2 which Russian may no longer be able to sell to the EU, cannot, in the short term, be sold to other consumers, which might free up production from, for instance, Qatar.

Russia will need at least seven years to build the necessary pipeline infrastructure for its gas to be able to flow to China and India. Liquification, as an alternative to pipeline exports, requires plants that are not available and take 5 to 8 years to build with technology held exclusively by Western companies, such as Linde AG in Germany.

Supply shortages for all hydrocarbon products will thus be a lasting consequence of the Ukraine conflict. With a chronic lack of refining capacity, Africa is near totally dependent on the importation of gasoline and diesel that will become less and less affordable.

Are energy rationing and economic recession the future for the next 10 or more years? The hopes centred on the infrastructure investment projects announced at the EU-AU Summit in February this year have been shattered by the Ukraine conflict. The finances for the ambitious Global Gateway Investment Package have become illusory.

Russian sovereign debt defaults also threaten ongoing investment and development projects as well as Russian commerce in Africa. Because of the Western sanctions, banks are legally prevented to make settlements for Russia in the required hard currencies, in particular the USD, triggering debt defaults.

Although all Russian debt is widely covered by the freezing and de facto confiscation of some $300billion (about R4 trillion) in Russian sovereign funds, creditors will find it difficult and probably impossible to access those blocked accounts and Russia will for some time to come be barred from any Western capital.

Under these circumstances, Europe will have to expect further increases in refugee waves from Africa and Islamic terrorism will be able to spread faster in countries starved of energy and lacking food security. Neither the US nor Europe have any solutions to offer.

The looming threats of famine, energy scarcity and political instability will push governments in Africa closer to Russia, China and India, as they are the countries that can supply affordable fuel, energy, fertilisers and staple foods, to a continent once again overlooked by the West.

*Thomashausen is a German attorney and Professor Emeritus of International Law (Unisa)

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