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Al Ahram Weekly - Egypt
By: Sara Eissawi
Andrei Slipov, director of the Russian Export Centre, tells Sara Eissawi the Russia-Africa economic forum will see the launch of Russian Industrial Zone in Egypt as well as a new mechanism to finance Russian-African trade
African countries have made a quantum leap in terms of investment and trade conditions, making the continent one of the most promising export markets for Russian goods and an attractive investment destination, says Andrei Slipov, director of the Russian Export Centre (REC).
In 2018 trade between Russia and Africa increased 17 per cent, moving beyond $20 billion. During the first half of 2019 non-resource exports grew 15 per cent compared to the same period in 2018, and according to REC estimates trade between Russia and Africa is set to triple.
Russian suppliers of farming machinery, motor vehicles — KAMAZ, GAZ Group, URAL, UAZ — and specialised equipment are already present in African markets. LADA assembles vehicles in Egypt and RENAULT supplies Russian-made car bodies to Algeria. Russian companies are involved in the maintenance and upgrading of power stations, the oil industry and the construction of infrastructure for the chemical and mining industries. Educational, health care and hi-tech projects are under development, and Russian involvement in the agricultural sector is growing.
What is on REC’s agenda for the forum?
REC Group and Afreximbank, our main partner in Africa, are the official co-organisers of the Economic Forum. REC has been actively preparing for Sochi. We have analysed existing international partnerships and investments between a number of countries and Africa and we will be holding two sessions within the forum, addressing trade finance issues and the Russian Industrial Zone in Egypt.
There will be a presentation of both products and technological solutions which we believe have potential in African markets in the agricultural, transport engineering, chemistry, medicine, pharmaceutical and information technology sectors.
In addition, all-terrain vehicles, the latest generation city trams, agricultural machinery, construction and special equipment and mobile healthcare centres will be on display and a special business communication area has been designated for networking between Russian and African businessmen.
At the moment Russia’s presence in Africa is limited. Do you plan to expand your presence and open more REC representative offices in countries where you are not yet represented?
Africa is a major driver in the development of the non-resource non-energy market. We have good historical ties, and in many countries those who comprise the local elite studied in Russia. We can foster dialogue with them and build long-term strategic relations.
Currently, the Russian Industrial Zone in Egypt is under development. It can be considered our export gate to Africa and will be showcased at the forum. It is the first large-scale Russian-African infrastructure project for decades.
We will gradually develop a unique complex on 525 hectares at the East Port Said site of the Suez Canal Economic Zone. Russian exporters and suppliers will be able to locate production facilities there to serve the Middle East and Africa markets. Those who move operations to the zone will enjoy state-of-the-art infrastructure and utilities, a variety of exemptions and incentives and will be able to repatriate 100 per cent of their revenues back to Russia.
Twenty-five memoranda of understanding have been already signed with Russian companies concerning their participation in RIZ. They include manufacturers of biochemistry products and fertilisers, construction materials, metal structures, composite materials, farming machinery, electrical goods, oil and gas equipment and dock facilities.
Egypt meets many of the requirements demanded by such a zone. It has free trade agreements with 72 countries, excellent logistics and is close to the Suez Canal, all factors that help reduce costs for exporters. Strong relations between Moscow and Cairo are also an asset. The potential of RIZ is huge.
Are many agreements expected to be signed during the two-day forum?
The number of Russian companies eyeing the African market is growing and we expect cooperation agreements to be signed by Russian manufacturers and African partners. They will be large-scale agreements covering areas such as infrastructure and energy.
There will be a memorandum of cooperation with Nigeria over the Ajaokuta Steel Plant construction project. It will be symbolic for us. We will be returning to a project that began in Soviet times. There are some hurdles remaining though. The local government, for example, has yet to conclude plant concession agreements with foreign investors. Negotiations between representatives of the Federal Government of Nigeria and the State of Kogi and the management of the Ajaokuta Steel Plant on the one hand, and Afreximbank on the other, have already been held, and there are ongoing meetings backed by the Russian Embassy in Nigeria.
Are the agreements due to be signed at the forum industry-specific?
Yes. Many involve developing railroad infrastructure and railroad equipment supplies. For example, one of the agreements covers the supply of more than 1,000 passenger cars for Egyptian National Railways. Meetings are planned with ministers of transport from a number of African countries to discuss priority projects.
And other bilateral Russia-Africa projects…
First, I would mention the Darwendale mining project in the Republic of Zimbabwe. The deposits are enormous, with a potential of up to 1,350 tons of output. The total project budget is around $1 billion, and it will be financed by a syndicate led by Afreximbank.
We are also signing cooperation agreements to promote Russia’s civil aviation industry, and covering land reclamation. Several memoranda are due to be signed between Russian and Angolan companies.
Will there be funding agreements?
We expect to sign an agreement to create a mechanism for Russian-African trade finance. REC, Russian banks and international partners will join together to create a settlement platform with a $5 billion capacity. The agreement aims to boost cooperation with the African countries and ensure payment of deliveries of Russian goods to Africa. The platform will help absorb trade risks and cover goods that enjoy international demand.
I would also like to mention a memorandum of partnership between REC, JSC and First Bank of Nigeria Limited, which aims to encourage trade between Russia and not only Nigeria, but other countries where the First Bank of Nigeria has a presence, states like Gambia, Ghana, Guinea, Senegal and Sierra Leone.
Al-Ahram Weekly – Egypt
By: Niveen Wahish
Egyptian and African economists, policy-makers, and members of civil society were given a run-down of the 2018 Ibrahim Index for African Governance (IIAG) produced by the Mo Ibrahim Foundation at a seminar organised by the Egyptian Centre for Economic Studies (ECES), a think-tank, in Cairo this week.
According to Yannick Vuylsteke, head of the foundation, governance is defined by the foundation as the “provision of goods and services that a citizen has the right to expect from the state and that a state has the responsibility to deliver to its citizens.”
Governance, he said, encompassed the delivery of many services, from the rule of law and access to justice, to personal safety and security, economic opportunity, the right to equality and to participate in the political process, and human development issues such as welfare, education and health.
“Without good governance, these political, social, and economic goods and services cannot be properly delivered,” Vuylsteke told Al-Ahram Weekly.
The IIAG measures countries’ performances in delivering these services. They are measured across four key components that act as indicators of a country’s overall governance performance, allowing stakeholders such as government, policy-makers, civil society, and academia to assess performance and progress in these areas and identify areas for improvement and highlight areas of success.
“It means policy-making and debates can be based on sound data and evidence,” he said.
Egypt came in 29th position among the 54 countries looked at in terms of its overall governance. It did not do well on safety and the rule of law, an area where 33 countries also showed deterioration. It did not do well in the area of participation and human rights either.
According to the index, the participation and human rights category measures civil and political rights and freedoms by assessing citizen participation in the political and electoral process, respect for basic rights, and the absence of gender discrimination.
However, Egypt was among the top 10 countries looked at in delivering sustainable economic opportunity, which according to the Index measures the extent to which governments enable their citizens to pursue economic goals and provide the opportunity to prosper.
Egypt’s position was also high at 14th in human development, which looks at whether governments provide poverty mitigation and alleviation, educational advancement, healthcare and medical and sanitary services.
In the rest of Africa, performances varied. Mauritius, the Seychelles, Cabo Verde, Namibia and Botswana were in the top five in overall performance, while the Central African Republic, Eritrea, Libya, South Sudan and Somalia were the lowest scoring. But, as Vuylsteke noted, these low performers have also struggled with conflicts.
As for the areas that saw the most improvement, Vuylsteke said that on average health was the most improved sub-category, particularly indicators relating to issues such as child mortality and anti-retroviral treatment provision for HIV.
He added that some data show that many citizens are still unhappy with the provision of some basic health services, however, suggesting that better data is needed to measure issues such as health infrastructure or affordability.
Vuylsteke said during the seminar that data was one of the challenges facing the computing of the Index.
He also said gender equality in Africa had improved a lot over the last 10 years, politically, socially and economically, although wide disparities existed between regions.
Although “infrastructure has really improved, and many countries show large gains in physical infrastructure and also digital and information technology,” scores remain low across many African countries, and a reliable electricity supply is still a major problem across Africa, he added.
Vuylsteke stressed that the foundation works with governments all year round as much as possible and is very receptive to opening debates on governance based on the index. “The index is not meant to criticise or praise anyone; it is just one tool so we can all improve governance together. We are all invested in this,” he said.
The 2018 Index is the 12th to appear thus far, with Vuylsteke saying that at the beginning it only covered Sub-Saharan Africa, and there was not much comparable data available.
The index has grown since it was created, however, and it now has a decade’s worth of data, meaning that important trends can be assessed. However, African sources are still lacking, he said.
At first, there was only one African source of data, but today almost 30 per cent of the data comes from African sources and institutions, Vuylsteke said, adding that there was a need for more African institutions to produce data.
The Mo Ibrahim Foundation, set up by the Sudanese-British billionaire, is an African foundation established in 2006 with a focus on governance and leadership in Africa.