The Russia-Ukraine War: Is Africa the Beautiful Bride?

Introduction

Over the last decade, Africa has recorded steady economic growth. However, in 2020, due to the COVID-19 pandemic, the region experienced a 1.9 percent contraction—the worst on record.^[1] 2021 saw 4.5 percent growth, driven mainly by a rebound in commodity prices and easing of social restrictions. Unfortunately, 2022 has become an increasingly challenging environment due to Russia’s war of aggression against Ukraine. This has caused supply chain disruptions and food insecurity, with inflation reaching its worst reading since 2008.^[2] Upwards of 400 million people in Africa are living in poverty, and this situation had already been further exacerbated by the pandemic.^[3] Political instability, conflicts and security issues, food crises, climate change, and environmental degradation present additional challenges. Moreover, fiscal deficits and external financing jeopardize macroeconomic stability.^[4] As a result, economic policymakers are confronted with a multifaceted and complex policy environment with difficult tradeoffs to address current and long-term issues.

The conflict between Russia and Ukraine started in February 2014 when Russia annexed Crimea following a contentious referendum. The conflict has since displaced millions of people and claimed thousands of lives. The conflict grew over a seven-year period as Russians and local proxy groups took land in Ukraine’s Donbas area. The aggression escalated into a full-fledged conflict after Volodymyr Zelensky was elected President of Ukraine in 2019. By September 2020, Zelensky had given his approval to a new national security plan that categorized Russia as an aggressor and listed NATO membership as one of Ukraine’s main objectives in terms of both defense and foreign policy. Between October and November 2021, Russia began a massive build-up of troops and military equipment along its border with Ukraine. As a result of globalization, what could easily be a European-only issue has become an issue of global relevance and concern.

America’s purported obsession with bringing Ukraine into NATO and making it a Western bulwark on Russia’s border has been considered a major source of Russian aggression against Ukraine. There is also a school of thought that believes the war was mainly driven by the imperial ambitions of Russian President Vladimir Putin, whose long-term ambition is to not only conquer Ukraine but other countries as well—all for the purpose of creating a greater Russia that bears some resemblance to the former Soviet Union.^[5] Regardless of what the actual cause of the war might have been, the focus of this article is to understand the position of Africa in terms of economic diplomacy, worldview, and international affairs.

The Economic and Political Impacts of the War on Africa

The Russian invasion of Ukraine has caused a global economic shock. Oil and food prices have increased, leading to external and fiscal balance strains, as well as food security concerns. This shock is compounded by the COVID-19 pandemic, climate change, and other security risks. Economic activity in Africa is expected to grow by 3.8 percent this year, and 4 percent over the medium-term.^[6] However, this is not enough to make up for the losses from the pandemic, particularly the setback to progress toward achieving the Sustainable Development Goals.

Russia is under sanctions imposed by the West. As a result, many Russian contracts have been cancelled, financial accounts in the West frozen, and Russian currency suppressed. However, as the world’s second-largest oilproducing country and a significant wheat-producing nation, Russia also has a financial impact worldwide. For instance, 40 percent of the oil that Europe and America receive comes from Russia. Furthermore, 18 percent of the world’s wheat supply comes from Russia.^[7] The war and the sanctions that followed caused demand for and supply of Russia’s oil and gas to plummet, leading to a rise in global oil and gas prices. Wheat prices in Africa and other parts of the world have also soared, with prices in African countries—which import 50 percent of their supplies from Russia and Ukraine—rising by 71 percent in 2022.^[8] This has caused food and energy prices to fluctuate quickly throughout Africa, particularly in North Africa and the Near East, which are heavily dependent on wheat imports from both Russia and Ukraine.^[9]

For resource-abundant African countries, the increase in oil and gas prices meant they experienced an increased flow of foreign exchange, as more exports of their oil and gas products were sold in the international market. It also meant an expansion of their fiscal space. However, the opposite was the case for resource-scarce African countries, as their imports were more expensive, resulting in an inflation spiral that often culminates in a fast depreciation of their currencies. There are concerns that the pandemic and the war may lead to larger supply shocks and less-anchored inflation expectations among African economies. These risks are biggest for African economies with high debt-to-GDP levels like Cabo Verde, Eritrea, and Mozambique.^[10] As oil prices continue to rise, oil-exporting nations like Nigeria, with huge populations and a highly subsidized petroleum industry, also face major fiscal risks and debt management concerns because of the fiscally unsustainable pricing subsidy regimes they operate.

Table 1: Voting Patterns of African countries in the UN General Assembly on the Ukraine/Russia Conflict

Source: Gopaldas, 2023^[11]

Despite these challenges, many African countries have yet to denounce Russia. The votes cast by African counties on UN resolutions regarding Russia’s invasion of Ukraine in 2022, as shown in Table 1, indicate shifting dynamics in the continent’s relationship with Russia, the rest of EU, and indeed the U.S. In particular, the spread of the votes suggests that while Russia has long enjoyed strong ties with many African countries, such ties may be overstated and are not without conditions. The same interpretation could also apply to China, which has been the most visible ally of Russia since the war began. Furthermore, the abstaining votes cast by some African nations suggest that they were not willing to be used to support the condemnation of Russia by the U.S. and EU, and have instead opted for a nonaligned stance. Finally, the votes also demonstrate that the extent to which Russia or the U.S. or the EU can influence African political elites may be limited and require significantly more consultative approaches in order to co-opt them into patronage.

With the economic sanctions imposed by the EU and U.S., Europe must find alternatives to Russian gas quickly, even if it means going cold turkey and brazenly returning to the use of coal, despite its promotion of green transition initiatives in Africa and elsewhere. It also appears that for new gas agreements, Africa has emerged as Europe’s most dependable option to Russia.^[12] Although there are abundant natural gas deposits on the continent, and pipelines connecting nations in North Africa like Algeria to Europe already exist, producers in other parts of Africa have long been prevented from increasing exports due to a lack of infrastructure and security challenges.^[13] Nigeria has the greatest natural gas reserves in Africa, but has struggled to effectively use those reserves for exports. This is because of a number of obstacles, not least of which are the expenses related to building the infrastructure for gas channeling. Last year, Nigeria exported less than one percent of its enormous natural gas reserves. Since 2009, plans for a 4,400-kilometer (2,734-mile) pipeline that would transport Nigerian gas to Algeria via Niger have been on hold, mostly due to inability to finance the huge $13 billion cost.^[14]

Another element in the conflict equation for African nations is China, the world’s second-largest economy. Despite the recent decline in Chinese investments to Africa—perhaps due to the devastating effects and disruption COVID-19 had on China—China is still exploring ways to consolidate and expand its influence in Africa.^[15] For most African economies, the partnership with China could be considered mutually beneficial, as it doesn’t come with a lot of “baggage” in the form of strict rules and conditionality, as do those from Western nations.

In contrast, the U.S. recently held its first U.S.-Africa leaders’ summit in eight years, since the most recent summit in 2014, with the main goal of fostering new economic engagement.^[16] The U.S. wanted to strengthen its ties to Africa and ensure it was not losing out to a China whose hegemonic influence appears to be rapidly increasing, as we see a much weaker U.S. hegemony emerge. Recognizing Africa’s geo-strategic importance, U.S. Secretary of State Antony J. Blinken noted during the summit that “Africa is a major geopolitical force. It’s one that has shaped our past, it’s shaping our present, and it will shape our future.” More recently, in April 2023, U.S. Vice President Kamala Harris toured Zambia, Tanzania, and Ghana in an attempt to strengthen and revamp the United States’ relationship with Africa.^[17]

How Can Africa Best Leverage this Increased Attractiveness Amid Building Geopolitical Tensions?

The difficult job facing Africa is to strategically take advantage of the greater interest the rest of the world has in it as a result of the current crisis and associated factors. Before the pandemic and the Russia-Ukraine crisis, there was a broad sense that the world had begun to recognize Africa’s potential, maybe as a result of the unavoidable effects of globalization. This fascination with Africa has only grown since then. Due to its wealth of natural resources and human capital, Africa is seen as a market on the cutting edge of capitalist expansion. African markets attract global investments and interests due to their abundance of resources, including minerals, oil, and vast tracts of land.

To fully benefit, however, Africa will need to have an evidence-based strategy for interacting with the outside world by constructing a distinct and well-defined worldview. Few African nations, in contrast to either Western or Eastern nations, have a consistent, native, and well-articulated worldview that permeates how Africa and Africans interact with the rest of the world. Such a worldview is essential to the governance and political economy of Africa because it drives, motivates, and integrates the thinking and activity of society in ways that engender development. Effective leadership across the African continent is crucial for a worldview to be viable and long-lasting. A key tenet of such a worldview should be the conviction that Africans and not outsiders are accountable for the future of the continent. It is a demand for a strategic examination of globalization and how it impacts the interests of Africa. It is also a demand to re-evaluate how foreign aid fits into Africa’s development strategy in order to strengthen institutions and social contracts.^[18]

For this to happen, policy action is required to diversify African economies, leverage the private sector to the fullest extent possible, and address issues like gender inequality and climate change that the pandemic has made worse. In order to promote private sector-led growth and moderate policy interventions in ways that limit the effects of capitalism on inequality and climate change, African countries will need to make deliberate decisions about the type of capitalism that would produce the best results.

The quality of institutions is critical in developing policies that attract the “appropriate type” of investments to Africa that will be both sustainable and value adding. Better institutions will also assist the continent in promoting intra-Africa trade and integration via the African Continental Free Trade Agreement (AfCFTA). The absence of a robust industrial base for the production of finished and value-added goods has continued to be a problem that can only be resolved by increasing the level of economic complexity on the continent. Government policy must proactively construct and coordinate incentives that encourage investment in new opportunities for complex manufacturing in order to create economic complexity. This will help enterprises to move beyond their areas of comparative advantages. According to Harvard University Professors Ricardo Hausmann and Dani Rodrik, “Unless purposeful action is taken to move towards new activities, countries may not be able to overcome the market failures that affect the process of structural transformation.”^[19]

Furthermore, to make sure that their interests are represented and advanced, regional cooperation and integration initiatives like the African Union and the different regional economic commissions need to be strengthened. This will enable Africa to engage in international discourse with a unified voice and manage regional security concerns more effectively. Additionally, it will support regional economic growth and diversification as well as Africa’s geo-strategic position.

In conclusion, the COVID-19 pandemic and the Russia-Ukraine crisis have given Africa the chance to increase its diplomatic contacts and strengthen its international partnerships. To make sure that their interests are represented and safeguarded, African nations should explore new possibilities for collaboration and partnership with other nations, especially those in the West and East. Even as Africa looks inward to refine its strategy of engagement on the global stage, increased genuine international cooperation would be beneficial.

[1] IMF, Regional Economic Outlook for Sub-Saharan Africa: A New Shock and Little Room to Maneuver (Washington D.C: International Monetary Fund, April 2022).

[2] Yaka Hayashi, “Ukraine War Creates Worst Global Food Crisis Since 2008, IMF Says,” Wall Street Journal, September 20, 2022, https://www.wsj.com/articles/ukraine-war-creates-worst-global-food-crisis-since-2008-imf-says-11664553601.

[3] UNCTAD, “Facts and Figures,” United Nations, UNCTAD/PRESS/PR/2021/046, December 8, 2021, https://unctad.org/press-material/facts-and-figures-7.

[4] IMF, Making Debt Work for Development and Macroeconomic Stability (Washington D.C: International Monetary Fund, April 2022).

[5] Tanisha Fazal, “The Return of Conquest?” Foreign Affairs, April 6, 2022, https://www.foreignaffairs. com/articles/ukraine/2022-04-06/ukraine-russia-war-return-conquest.

[6] IMF, Regional Economic Outlook for Sub-Saharan Africa.

[7] Hanna Haddad and Mohammed Duggal, “Infographic: Russia, Ukraine and the Global Wheat Supply,” Al Jazeera, February 17, 2022, https://www.aljazeera.com/news/2022/2/17/infographic-russiaukraine-and-the-global-wheat-supply-interactive.

[8] Chris Muronzi, “Is Africa Still ‘Neutral’ a Year into the Ukraine War?” Al Jazeera, February 26, 2023, https://www.aljazeera.com/features/2023/2/26/is-africa-still-neutral-a-year-into-the-ukraine-war.

[9] OECD, Challenges to International Trade and the Global Economy: Recovery from COVID-19 and Russia’s War of Aggression against Ukraine, OECD Trade Policy Paper No. 265, January 2023.

[10] Business Insider Africa, “20 Countries with the Highest Debt-to-GDP Ratio in Africa,” March 21, 2022, https://africa.businessinsider.com/local/markets/20-countries-with-the-highest-debt-to-gdp-ratioin-africa/8qdmrsq.

[11] Ronak Gopaldas, Will the Invasion of Ukraine Change Russia-Africa Relations? (Washington D.C: Carnegie Endowment for International Peace, April 2023).

[12] BBC News, “Ukraine Crisis and Africa: The Effects on Oil, Students and Bread,” February 24, 2022, https://www.bbc.com/news/world-africa-60507209.

[13] Festus Iyorah, “Analysis: Can African Gas Replace Russian Supplies to Europe?” Al Jazeera, March 1, 2022, https://www.aljazeera.com/economy/2022/3/1/analysis-can-african-gas-replace-russian-suppliesto-europe.

[14] Al Jazeera, “Europe Turns to Africa for Gas as Alternative to Russia,” October 12, 2022. https://www. aljazeera.com/features/2022/10/12/europe-turns-to-africa-for-gas-as-alternative-to-russia.

[15] Uzochukwu Alutu, “Why are Chinese Loans to Africa (CLAs) declining? Opportunity cost, COVID effects on China or Recipient Country factors,” Forthcoming.

[16] United States Department of State, “U.S.-Africa Leaders Summit: United States Department of State,” December 15, 2022, https://www.state.gov/africasummit/.

[17] AfricaNews, “U.S. Vice President Wraps up Visit to Africa,” April 2, 2023. https://www.africanews. com/2023/04/02/us-vice-president-wraps-up-visit-to-africa/.

[18] Kingsley Moghalu, Emerging Africa: How the Global Economy’s “last Frontier” Can Prosper and Matter, 2nd ed. (London: Penguin, 2014).

[19] Dani Rodrik Dani and Ricardo Hausmann, Doomed to Choose: Industrial Policy as Predicament, 2006, https://drodrik.scholar.harvard.edu/sites/scholar.harvard.edu/files/dani-rodrik/files/doomed-to-choose.pdf.