Sanctions against Russia: what impact for Africa?

United States, European Union and soon G7… Economic sanctions against Russia are increasing. A majority of African countries that have energy, agricultural or military cooperation relations with Moscow are worried. Right or wrong ?

Confiscation of Russian financial reserves abroad, cutting of the SWIFT international financial circuit for seven Russian banks, censorship of the media Sputnik and Russia Today (RT)... European countries have responded to Russia's military operation in Ukraine by drawing a series of penalties.

For their part, the United States, which has already prohibited its airspace to Russian planes, indicates that sanctions targeting Russian hydrocarbons “are not ruled out”. And this, despite the explosion in the prices of gas, oil, cereals and other products because of the sanctions already in place.

On the African side, the various countries are watching Russia from afar, whose currency – the ruble – has fallen. But it is in reality above all the “de-dollarization” provoked — by the United States — of Russian trade which risks having harmful consequences for all of Moscow's partners.

Twenty-two African countries have military cooperation agreements with Russia, which range from arms to military assistance. Twelve countries on the continent have nuclear cooperation agreements and seven states have agricultural agreements with Moscow. Finally, Russia has invested in the electrification of eleven countries in Africa.

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- Kamal Louadj (@LouadjSputnikFR) March 2, 2022

Commercial transactions between Russia and African countries are mostly carried out in Western currencies. But if Russia were to try to circumvent economic sanctions to continue its trade with Africa, what methods could Moscow use? Above all, what would African countries stand to gain?

How to circumvent economic sanctions?

Embargoes are a reality that several African countries know well, especially since the Cold War and the first alliances between certain States of the continent and the Union of Soviet Socialist Republics (USSR). And even if the Eastern bloc has since crumbled, a majority of the economic relations that Russia maintains in Africa are in the continuity of the agreements concluded in the 1960s.

However, modern Russia has demonstrated, notably in 2014, that embargoes are not a hindrance to its international diplomacy. After the sanctions imposed after the annexation of Crimea, Moscow invested heavily in agriculture, rapidly approaching food self-sufficiency. And thus becoming one of the leading cereal exporters in the world.

Now, with sanctions on Russia even tougher than in 2014, analysts are pondering the future of Russian economic exchanges.

Among the solutions considered: barter, which has shown its effectiveness in the past. For nearly three decades, Iran has been practicing it. But the exchanges can also be based on different financial circuits. According to Brazilian journalist Pepe Escobar, “Russia could compensate at least 50% of commercial losses” by relying on barter and borrowing alternative financial circuits to SWIFT.

Indeed, several companies already use the Russian SPFS or even the Chinese CIPS. So, “if someone wants to buy Russian oil and gas with CIPS, payment must be made in the Chinese currency, the yuan. CIPS is independent of SWIFT”, assures the journalist.

A Russia-China alliance in Africa?

Above all, it is a potential Russia-China tandem that could reassure African states, but also threaten the omnipotence of the dollar. The leading creditor of Africa, Europe and the United States can boast of rock-solid economic resilience.

Among the 248 armed conflicts that occurred in 153 regions across the world from 1945 to 2001, 201 were initiated by the # U.S., accounting for 81% of the total number. pic.twitter.com/Kjn81VIVXP

- Chinese Embassy in Russia @ 驻 俄罗斯 @ (@ChineseEmbinRus) -

Wall Street's reaction speaks volumes. As Russian banks were suspended from the SWIFT circuit, US financial empires Citigroup and JPMorgan Chase warned that sanctions against Russia could backfire on the global banking system.

“The ousting of Russia could backfire, driving up inflation, bringing Russia closer to China, and shielding financial transactions from Western scrutiny. It could also encourage the development of an alternative to SWIFT that could ultimately undermine the supremacy of the US dollar,” reads a Bloomberg article.

In addition to a rise in the yuan, now irreversible since the introduction of sanctions against Russia, other European interests are also threatened in Africa.

Read: The African Union opens a permanent mission in China

The Chinese model of investment in Africa is quite simple: China encourages its companies to build on the continent and to buy its products there, by financing the operations through customs clearance of goods or zero-rating.

Russia, on the other hand, largely finances investment projects, especially in the energy sector, through loans on preferential terms. But unlike Beijing, Moscow offers more flexible conditions, due to massive, exclusive and long-lasting arms contracts signed with African countries.

What if China and Russia allied themselves in Africa, to dislodge the Western powers there? It should be remembered that the two countries skilfully avoid crossing paths on the same African markets. Quite nameless give-and-takes take place, for example, when China invests in infrastructure and new technologies. Russia monopolizes the energy and armaments sectors.

Bullying, a Western strategy

If it is not certain that the uninhibited Western strategy of financially sanctioning Russia will succeed, there is one question that remains: is the Western model for seizing economic positions in Africa still really effective?

In the UN General Assembly, the vote of condemnation of Russia, after the start of the war in Ukraine, proved two things: first, that African countries are cautious and prefer, for the most part, abstain from taking a position rather than condemning the Russian intervention. Then, the West, in particular Europe, succeeds less and less in having control over the choices of African countries.

Read: Mali: China and Russia thwart France's plans

Already before the Ukrainian crisis turned into a war, the military power in Mali, targeted by a panoply of sanctions and by an embargo decided by ECOWAS, probably under the influence of France, held firm and turned to Russia. If the former colonial power France has succeeded in proving anything to Africans, it is that its military intervention in Mali has been aborted and that its African hegemony is increasingly fragile.

Goethe said: “The man who has nothing to lose is formidable”. And, from this point of view, Western sanctions are no longer the formidable weapon that they once were. From another point of view, if the European Union and the United States risk, by sanctioning Russia, inflicting unprecedented financial hara-kiri on themselves, how far will the West go to avoid losing its last -African squares?

Read: Libya: Gas and Egypt's Thucydides Trap

For the moment, Africa observes the situation without really intervening. But there is also an opportunity for some African states to capitalize on the widespread economic and diplomatic conflict. The gas crisis, for example, has made it possible to create improbable African alliances, with for example the creation of the G4. But the latter, which brings together Algeria, South Africa, Ethiopia and Nigeria, has not yet decided on its major objectives, while several gas and oil exporting countries have managed to make themselves indispensable to the western eyes. A first step for Africa, which is in a position to be able to negotiate with Europe in particular.