Igor Nikolaevich Morozov: "Africa is waiting for the return of Russia."
Russia is actively preparing for the second Russia–Africa summit. It is assumed that the summit will be held in 2022 in one of the African countries. It will be attended by the Russian President Vladimir Putin and the leaders of African states. We are talking about how the format of the forum and its main goals and objectives are seen today with Igor Morozov, a member of the Committee of the Federation Council of the Federal Assembly of the Russian Federation on Economic Policy, Chairman of the AFROCOM
- Igor Nikolaevich, it is planned to hold a business forum within the summit framework; what needs to be done to prepare it and who will take part in it?
- The secretariat of the Russia-Africa Forum and its Councils, Roscongress, plan to attract small and medium-sized businesses from the regions along with large strategic companies. Representation in the African market is vital for the regional economy of Russia.
To do this, much needs to be done at the level of intergovernmental commissions (IPCs) — to approve new mechanisms for accounting for natural resource concessions in investment projects and foreign trade transactions. It is also advisable to develop tools for barter (compensation) trade. African states are asking for just such a format of work for small and medium-sized businesses.
We hope that intergovernmental commissions will sign agreements on free trade zones between Russia and the countries of the African continent. Similar documents have been signed with the USA, the EU, India, China, and other countries. Russia is lagging somewhat behind this process.
We expect that the Russian Industrial Zone in Egypt will be operational by this time, and all these tools will allow Russian businesses to localize faster and go through the certification process of their products. The absence of all these mechanisms today constrains the large-scale presence of regional developments on the African market.
- What can we offer our African partners?
- First of all, competitive KAMAZ and URAL trucks, agricultural machinery, and aggregates, equipment for the mining and mining industry: the extraction of iron ore, gold, diamonds, and rare earth metals.
The breakthrough into the global pharmaceutical market of Sputnik V suggests that everything possible should be done so that Russian pharmaceutical companies can find new partners in Africa. The topic of vaccination and not only is topical for this continent. Another high-tech Russian pharmaceutical sector may also reach out for vaccines.
It is worth noting that experimental production of the Russian vaccine is already underway in Morocco, but, as I said earlier, this sector needs to be expanded on a large scale among manufacturers of African countries.
It is necessary to offer what is in demand in the African market. Russian IT technologies are ahead of many developed countries, so African banks are already showing interest in our banking IT services. This is very important because the Russian banking sector is currently not represented on the African continent. This hinders the participation of Russian companies in tenders and auctions.
What is the role of the Central Bank of Russia in this process?
- The Central Bank of Russia has begun to stimulate the participation of Russian banks in financing African projects. The potential for Russian companies to participate in major African investment projects and the involvement of high-tech companies is vast. Currently, the Central Bank is developing and will soon test the concept of an "electronic ruble".
Russia has a great opportunity to work out this direction in the African market. We see examples of the Chinese electronic yuan; not so long ago, the Central Bank of Israel announced the creation of an electronic shekel. The US Federal Reserve announced the creation of an electronic dollar. However, it is not yet known how it will be implemented.
We can't miss this chance. We need to enter the African financial services market more actively with this know-how. You should not be afraid of cryptocurrencies, and why not try an international exchange in one of the major economies of Africa, such as Algeria, Egypt, Nigeria. This requires bold decisions by the state and financial institutions.
- Igor Nikolaevich, what can African countries offer Russia?
- Africa today is a storehouse of rare-earth metals for the entire world economy. These are lithium, tantalum, nickel, coltan, uranium, and many others. The cost of these rare earth metals is incomparable with the cost of their extraction in other countries of the world - the difference is ten times.
- Will we be able to compete with European and Asian states in Africa?
- We see how our partners are working in Africa today. The Chinese have actively entered the African market not only with technology but also with their workforce. The turnover of the European Union is 300 billion dollars annually; China has more than 200 billion dollars. India also skillfully uses the labor resources of African states in its industries. India has a turnover of more than $ 90 billion and continues to grow. Over the past year, the Indians have overtaken even the Americans.
But, we have no task to compete with anyone. It is important for Russia to create comfortable conditions to promote Russian high technologies on the African market. They are competitive, and this is recognized by all the leading players of the African market. I am sure that our full-fledged return to the African continent will help regional enterprises that will focus on prepared free trade zones, specialized clusters, and the Russian industrial zone in Egypt.
- Igor Nikolaevich, you have worked in Africa for a long time, you are well versed in this area. How do you assess the presence of our competitors - the USA, Europe, China, and India on the African continent? What are the chances of Russia returning to the leading positions?
- It will not be easy, because 30 years of absence of political, trade, and economic relations is a long time. Africa is seriously involved in IT technologies. 500 million people use mobile phones, 480 million use the Internet. Every year, Africans buy goods online worth more than $ 2 billion.
It is clear that this is an entirely different Africa. We must engage with our new technologies, study the tools used by the Chinese, Indians, the European Union, the USA. Russian business, in addition to the Export Center (REC) and its group of companies ROSEXIMBANK, EXIAR, needs a direct investment fund to finance Russian projects and startups in African countries. We see that the interest rates of Russian banks are several times higher than similar rates of funds and banks in China, Europe, and the USA.
We need to create competitive tools to strengthen Russian business. In November last year, the Federation Council Committee on Economic Policy held a round table at which all those present talked about the need to create such a fund. The Committee noted this in its recommendations to the Government of the Russian Federation, and is now preparing parliamentary hearings for October- November.
- Even 30 years ago, our presence on the African continent largely determined the development of our economic and socio-political ties. Today, how would you characterize the Russian-African relations?
- Africa is waiting for Russia. We have an outstanding political history. The memory of our support in the struggle for the independence of African States remains on the black continent. 300 Russian enterprises were built there – factories, hydroelectric power plants, irrigation facilities and much, much more.
Africans remember that we trained their specialists at our universities and technical schools. They brought qualified specialists home to them, and many of today's leaders remember how meetings in ministries and departments in the Cabinet of Ministers, were held in Russian.
We believe that it is necessary to increase student quotas for the African States, because there are a lot of applicants. This will be extremely useful for both sides. Such students receive a profession, special skills, and knowledge about our cu
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lture, history, literature, and fall in love with our country.
Thus, they transfer a piece of the historical and cultural code to their countries and society. Russia needs to open Russian schools and universities in African countries on market conditions.
This is the market of educational services, which is in demand on the African continent more than ever. AFROCOM interacts with Rossotrudnichestvo. I think that we can also have a severe breakthrough in this area. We need new constructive economic and political solutions.
- Which countries of the African continent are most interested in cooperation with us, and to what extent is this cooperation mutually beneficial?
- Cooperation with African countries should always be mutually beneficial. Today, most African countries are interested in working with Russia. But there was a difficult period for our country when Russia was forced to join the Paris Club, and the liberal government of that time initiated a powerful information attack on cooperation between the USSR and Africa, saying that "the debts of African countries cannot be paid to the new Russia."
In fact, everything was different. As always, the betrayal of national interests by the liberal political elite led to the fact that this colossal debt, even at present, was written off in favor of the Paris Club and those international scammers who revolved around these debts.
Therefore, taking into account the bitter experience of the past, Russian state financial institutions should do everything possible to ensure that domestic business operates in Africa on a mutually beneficial market basis, in comfortable conditions, with the support of the state and society.