Because of the sheer magnitude of their exports, Russia and Ukraine are key players in the global economy, which means the conflict between the two is already having a significant impact on the region's trade with Africa.
Africa Already Has a Bread Problem
Because Russia and Ukraine are major exporters of wheat and other grains to Africa, there has already been a significant drop in exports, with more expected as the conflict disrupts farming. The North African countries import over 50% of their wheat from Russia and Ukraine. The impact is already being felt with the rise of the price of bread in Egypt and its neighbors.
Bread prices have also risen in Cameroon as a result of the war. Sanctions imposed on Russia, the world's fourth producer of fertilizers, will have an impact on fertilizer prices, transportation, and shipment to Africa. Sunflower oil, another important Ukrainian export, is becoming more expensive as well.
Russia’s Financial Investments in Africa
The amount of foreign direct investment from Russia might not be significant yet, but Russia’s influence in Africa is increasing. Russia is an investor in the African Export-Import Bank, Afreximbank. Russia’s nuclear energy giant Rosatom has deals in place with South Africa, Ethiopia, Nigeria, Zambia, and other countries to invest in nuclear energy. It will also be important to keep an eye on African exports to Russia, such as fruit and coffee from countries like Rwanda and Kenya. Moreover, Russian infrastructure partnerships in Africa, such as Nigeria's $8 billion Ajaokuta Steel Plant, are at risk.
Opportunities for African Exports
Despite the negative impact of the war, some African countries that compete with Russia in the oil and gas sector may benefit from it. Nigeria, Africa's largest oil exporter, along with Angola and Congo, could be among the biggest winners. Algeria, Europe's third gas supplier, will also look to increase exports to fill the void left by Western sanctions against Russia.
SWIFT Payments for Small Businesses and Corporations
Lastly, Russia’s expulsion from the SWIFT payments system will also pose difficulties for African banks, corporations, and SMEs trying to buy or pay for goods and services between Russia and Africa.
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