SDG 8 December 1, 2021

Russia — Africa trade turnover is set to ascend new heights in 2021

Source: Intexpertise

The year 2021 may with a high probability become the first year since 2018 when Africa’s trade with Russia increased. According to the preliminary statistics published by the Federal Customs Service of Russia, Russian exports to Africa for the first 8 months of this year accounted for 8.9 bln USD. Furthermore, this number is projected to increase, considering an upward trend in commodity prices. Russian imports from Africa remain at the same level, amounting to 2 bln USD.

The record was set in 2018 at 20.4 bln with Russian export of 17.5 bln. The goal of doubling the turnover over the five years was declared in 2019 by Vladimir Putin at the Russia — Africa Summit in Sochi, but in 2019 and 2020 the trade declined, reaching only 14.6 bln in 2020.

Regardless of COVID-19 pandemics, the Russian exports after 8 months of 2021 surpassed the level of the same period of 2018 by more than 400 million USD. Furthermore, four main pillars of Russian exports (i.e. cereals, armaments, mineral fuels, and ferrous metals) remained stagnant or even weakened. In the meantime, the contribution to the growth of exports (in comparison with 2018) was made by electrical machinery and equipment, aluminum, fertilizers, vehicles, railway and other rolling stock.

Country-wise, the first 8 months of 2021 demonstrated a trend towards geographical diversification of Russian exports — Algeria and Egypt accounted for 47% (record low, last year result stood at 58%). Meanwhile, such countries as Kenya, Nigeria, Senegal, and Uganda showed a significant increase. Although exports to Kenya reached 290 million, this growth was mainly due to aluminum shipment worth 90 mln that took place in July from Krasnoyarskii krai, Russia (the region where aluminum smelters of UC RUSAL are located).

As stated in the report «Africa: Development Prospects and Recommendations for Russia’s Policy» by HSE University «Currently major exporters of commodities (Uralkali, Uralchem, Fosagro, OZK and Gazprom Neft) are taking steps to enter African markets directly and to establish communication with consumers bypassing intermediaries». However, «the growth of exports to Africa with the exception of armaments is mainly due to the growth of the commodities trade through global traders than to the work of Russian manufacturers directly with buyers in countries Africa».

By the end of the year, Africa’s trade with Russia may ascend to 20-21 bln USD, slightly above the 2018 level (and more than ever before). Two main factors are behind this expectation: firstly, the last quarter of the year usually sees the closing of transactions for deliveries (this may add more than a half to the end-year volume), secondly, due to the global energy crisis prices for energy commodities grew up noticeably, which is likely to boost turnover as well.