Settlements in national currencies are key to boosting commerce, an African studies professor says
Western sanctions have prompted Russia to develop stronger economic ties with African countries, and switching to national currencies instead of using the dollar and euro in mutual trade will further boost cooperation, the head of the Institute for African Studies of the Russian Academy of Sciences said in an interview with RT.
According to Irina Abramova, Russia-Africa ties gained momentum last year, after Western countries sanctioned Moscow over the conflict in Ukraine. Around 30 large Russian companies are already working in Africa on different projects, including a nuclear power plant in Egypt. However, smaller companies and businesses are still cautious in dealing with the continent, having “no assurance that they won’t lose money” due to the lack of legislation and trade tools that would support their projects.
“We need to be more proactive in amending our legislation, introducing new tools to ensure that our businesses can safely operate on the African continent, starting with the issue of payment systems, switching to payments in national currencies, but also clearing and barter trade,” Abramova said.
According to the academic, Russia needs to “foster public-private partnership” with African companies, with the government creating conditions for businesses to operate on the continent by absorbing some of the risks, reducing taxes and providing guarantees.
“We need a strong push to gain momentum and kick-start the whole thing. There was a push when our Western partners turned their backs on us and we started searching for new opportunities in terms of both exports and imports. I also think we gained an appreciation of who is our friend and who is our enemy. In this respect Africa is ready to help us,” Abramova said.