Africa’s Economy and the New Global Order

Kester Kenn

Russia’s “special military operation” that was approved by State Duma and Federation Council, and directly aims at “demilitarizing and denazifying” the neighbouring former Soviet republic of Ukraine has shattered the global economy. The Ukraine crisis and its adverse impact and consequences is squarely blamed on Russia. Beyond that, some experts believe that Russia and China are ambitiously creating a “new world order” to halt unipolar system and the hegemony of the United States.

In the meanwhile, Russia has come under a raft of draconian sanctions imposed by the United States and Canada, European Union, Japan, Australia, New Zealand, and a host of other countries. The sanction-imposing countries are equally under the harsh conditions, equally as many Asian, African and Latin American countries are unbearably suffering from the global escalating prices. Wide-spread social discontent is also deepening against governments that supported war-mongering Russia.

According to the United Nations Food and Agriculture Organization, nearly half of Africa’s 54 countries rely on Russia and Ukraine for wheat imports. Russia is a major supplier of fertiliser to, at least, 11 countries. Reuters news agency reported that Africa is suffering from disruptions in food supply and soaring prices of basic goods and risks “disastrous consequences” if the situation endures, African Union Chairman Macky Sall said during a conversation with philanthropist Mo Ibrahim at the Ibrahim Governance Forum, far ahead before he travelled to Russia.

Early June, Senegalese President and African Union Chairman Macky Sall and the African Union Commission Moussa Faki Mahamat went to the south-western Russian city of Sochi for a top-level meeting with President Vladimir Putin purposely to discuss measures which could alleviate the escalating problems related to the food and agricultural inputs, and to find some strategic solutions within the context of Russia-African relations.

During the discussions, Macky Sall explicitly complained: “Anti-Russia sanctions have made this situation worse and now we do not have access to grain from Russia, primarily to wheat. And, most importantly, we do not have access to fertilizer. The situation was bad and now it has become worse, creating a threat to food security in Africa.”

Sall further explained: “It is also possible to look at Asia, the Middle East and Latin America – we see that the world is closely following the developments, but the countries that are so far away from the hotbed of the conflict are still experiencing its worse consequences.”

Russia, these years, plays a lot driving home Soviet-era sympathy to win the hearts of African leaders. Its traditional links are prioritized mainly on Soviet-era African allies, and its foreign policy is highly state-centered. Worse, it has poor public outreach policies and thus there are still negative perceptions and attitudes among the African public towards Russia.

“We are at a new stage of development and attach great importance to our relations with African countries,” Putin noted. According to him, the development of relations between Russia and Africa has shown positive results. Russia has always been on Africa’s side, has always supported Africa in its fight against colonialism. Though never a colonial power in Africa, Moscow was a crucial player on the continent in the Soviet era, backing independence movements and training a generation of African leaders.

Admittedly, Russia’s ties with Africa unexpectedly declined with the collapse of the Soviet Union in 1991 and China has emerged as a key foreign power, investing in many sectors, on the continent. While Russia’s economic footprints and in developing the needed infrastructures are still parctically invisible, the fact still remains that the United States, European Union and a number of Gulf States are also investing significantly in Africa.

Putin’s meeting with Macky Sall and with the participation of Moussa Faki Mahamat was very significant within the context of Russia-African relations. This high-level meeting shows Russia’s interaction has entered a new stage of development with the African Union, including expanding political dialogue, and possibly bolstering more practical economic cooperation as well as re-identifying cultural exchanges with African countries.

In an article published by the French Press Agency (AFP), it says talks between the AU leadership and the Russian president illustrate the importance of enhancing the bilateral relations. While African leaders are attempting to build international solidarity aims at achieving genuine peace and global security, it also important to initiate a new reform drive to transform agricuture and industry throughout Africa.

With the changing global situation, there is absolutely the need for reviewing policies. In terms of the foreign policy, Africans have to understand that the “new global order” as globe-throtted by Russia and China has limitations. Experts say Russia is highly limited by its own global economic footprints despite its ambitions to lead the world, and here it can only seek alliance with and swim in the glory of China that has spent years expanding and practically setting its economic policies around the world.

Despite criticisms, China with an estimated 1.5 billion population is considered as an economic power. It has collaborative strategic diplomacy with external countries have made it attain superpower status over the United States. The United States influence seems fading away, China has indeed taken up both the challenges and unique opportunities to strengthen its position, especially its trade and investment, and consistently building economic muscles.

There are now three dimensional crisis: food, energy and finance. With the economic consequences of the Russia-Ukraine crisis, it is another signal for African leaders to rethink about designing import substitution policies. Beyond all that, it seems Africans have no other way to reverse their addiction for food imports that take significant part of their budgets, despite the huge arable land. Food deficits are occurring with the potential for causing famine especially in the Sahel and Horn of Africa regions.

Previous months, especially in March and April, a number of reports published by the International Monetary Fund (IMF), the World Bank (WB) and many international organizations and academic institutions show that Sub-Saharan economies are likely to be impacted by tightening of global conditions and reduced foreign financial flows into the region. The analysis noted the high fuel and food prices will translate into higher inflation across African countries. Most of the reports, however, warned the broad impoverished population will further be badly hurt and be vulnerable to the unexpected changing conditions.

Some pointed directly to the increased likelihood of civil strife as a result of food and energy-fueled inflation, particularly in this current environment of heightened political instability. “As African countries face continued uncertainty, supply disruptions and soaring food and fertilizer prices, trade policy can potentially play a key role by ensuring the free flow of food across borders throughout the region. Amid limited fiscal space, policymakers must look to innovative solutions such as reducing or waving import duties on staple foods temporarily to provide relief to their citizens,” said Albert Zeufack, World Bank Chief Economist for the Africa.

On the other hand, Africa countries are indeed struggling with recovery efforts after two years of Covid-19 that locked them behind borders. One notable fact is that recovery remains uneven, incomplete and happening at varied rates of speed across the region. For example, the United States, the German and French have broader plans, not arms and weapons, on food security for Africa.

Ms Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has urged African countries not to close down trade while calling for deeper investment especially in agriculture: “The message the world needs to hear is, keep trade open. Africans can help Africans by urgently investing in more food production in the continent. We are looking for ways to invest with you in resilience to shocks, especially climate shocks.”

Under the article headline “Harness Africa’s Agric potential to feed the World” published in April, Dr Akinwumi Adesina, the President of the African Development Bank (AfDB) Group, has charged Africa countries to harness their agricultural potential and become the global food buffer. His arugemt was based on a basic fact that the continent occupies about 20 per cent of Earth’s total land area, and 65 per cent of uncultivated arable land, unlocking its potential would make it a solution to global food crisis.

Dr Adesina, who is also a former Minister of Agriculture and Rural Development of Nigeria, said: “Africa must become a solution to global food crisis by unlocking the full potential of agriculture sector. What Africa does in agriculture will determine the future of food in the world, because Africa has 65 per cent of all the arable land in the world that is not yet cultivated.”

The AfDB President has urged African countries to ensure quality standards of food produce and export to other countries. The Feed Africa strategy for Agricultural Transformation in Africa (2016 to 2025), was initiated to make Africa a net food exporter and move the continent to the top of export-orientated global value chains where it has comparative advantage. This is aimed at contributing to eliminating extreme poverty in Africa and ending hunger and malnutrition in Africa by 2025.

Dr Adesina has several times atempted explaining a simple fact that the drive for structural transformation of agriculture becomes absolutely necessary as there was no dignity in Africa begging other countries for food. “Africa does not need bowls in hand, Africa needs seeds in the ground and mechanical harvesters to harvest bountiful food produced locally. Africa must feed itself with pride. There is no dignity in begging for food.”

The Bank’s efforts has brought home $1.5 billion for the African Emergency Food Production Facility. During the Bank’s presentation on its financial statement on the sidelines of the annual meeting, indicated that the facility was a bold response by the Bank to revolutionize food production and mitigate a looming food crisis due to the Russia-Ukraine war.

It’s now imperative for African leaders to search for sustainable investments in agriculture and for building industry with their foreign partners. Essentially, investing in agriculture, adding new technologies to help farmers increase their productivity, even in climate change is what should be in the African leaders begging bowls, but it is more descent to fairly negotiate for funding support rather than begging the potential external partners.

The AfDB has encouraged consistently building on higher productivity rather than aid dependency. It has been advocating for expanding social protection programmes, strengthening economic resilience and responsiveness to shocks of Russia-Ukraine crisis, labour market programmes, protecting urban informal workers and helping the population invest in their health and education. The African Development Bank Group is Africa’s premier development finance institution.