Valdai Club

The development of cooperation with third countries and partners from leading international organisations is a priority among the international activities of the Eurasian Economic Union (EAEU). In particular, one of the points of the Strategic Directions for Developing the Eurasian Economic Integration until 2025 is “Positioning the EAEU as one of the most significant development centres of the modern world” (Direction 11), which provides for strengthening ties with partners “beyond the external perimeter” of the EAEU.

African states and their associations are among the most promising counterparts of the EAEU. The relevant issue was the focus of the participants’ discussion at the session titled “EAEU - Africa: identifying key points of interaction with countries and integration associations of the continent”, organized by the Eurasian Economic Commission (EEC) and the EAEU Business Council. It was held on November 9, 2024, as part of the First Ministerial Conference of the Russia - Africa Partnership Forum The session participants discussed the current situation and assessed the prospects for expanding cooperation between Eurasian businesses and African countries.

The largest export goods from the EAEU to the African market are wheat, oil, vegetable oils, rolled steel, vehicles for transporting goods, coal, and telecommunications equipment. Fruits, citrus fruits, cocoa beans, mineral ores, and vegetables are typically among the bloc’s imports from African countries. 

At the same time, the EAEU plays a much more important role in African imports than in African countries' global export markets: the EAEU's positive trade balance in 2023 amounted to almost $13.5 billion. Of course, the African partners are interested in balancing trade.

Russian business plays the "first violin" in the development of relations between the EAEU and African partners. However, companies from other Union member states are gradually catching up.

From 2018 to 2023, other EAEU member countries besides Russia increased their share in trade with Africa from just over 6% of the bloc’s total to almost 20%.  This is largely due to the results of the group’s integration and the growing international opportunities enjoyed by Eurasian business.

Over the years of their presence, Russian companies have made a significant contribution to the implementation of strategies and African priorities: the African Union Agenda 2063 and the 2030 Agenda for Sustainable Development.

Russian enterprises invest in solving the most important social issues, developing infrastructure, vaccinating the population, and strengthening human potential in such countries as Egypt, Guinea, Botswana, Burkina Faso, Cameroon, Chad, the Central African Republic, Djibouti, the Democratic Republic of Congo, Ethiopia, Ghana, Zimbabwe. The list goes on and on.

Among the companies actively working in African markets, we can highlight the producers of fertilisers (PhosAgro, Uralchem) and grain (Aston, United Grain Company), which help solve the problem of food security. Geological exploration and the extraction of mineral resources are actively carried out by such companies as Lukoil, Rosneft and RENOVA.

Nordgold and Severstal are developing their metallurgical business. RUSAL is one of the largest foreign investors in Guinea. Yandex is strengthening its position in the African IT market. High-tech production involving Russian participation is developing. For example, in South Africa, Russian companies carry out the assembly and maintenance of rolling stock for various purposes, and a line of commercial vehicles is being promoted in Morocco.

With regards to other EAEU member states, we would like to note the active work of Belarusian business in African markets: Belaruskali, BelAZ, Belshina, and Gomselmash export their products. Over the first eight months of 2024, Belarusian exports to African countries increased almost fourfold, reaching a record high of $497 million. 

MAZ and the Minsk Tractor Plant not only export their products, but also assemble trucks and tractors in Egypt. Kazakhstan works with more than two dozen African countries, and Kyrgyzstan and Armenia are developing their trade ties.

In order to strengthen the position of Eurasian business in the international arena, the EAEU Business Council, in which Russian business is represented by the Russian Union of Industrialists and Entrepreneurs (RSPP), is actively developing a system of business dialogues with partners "outside" the Union.

Business dialogues help diversify the contribution of the business community to the development of Eurasian economic integration, and also open up new opportunities for attracting business representatives from the EAEU and third countries to cooperation in multilateral and bilateral formats. Organisations which are members of the Business Council can act as “entry points” for foreign partners to the EAEU markets. In addition, the goal of business dialogues is to stimulate the development of business ties between the EAEU member countries and partner states. A wide range of tools is used: from establishing information exchange regarding regulation and conditions for doing business to practical assistance in eliminating existing restrictions, organizing business events, promoting the exchange of technology and know-how, and stimulating investment.

At present, the EAEU Business Council is holding consultations on the creation of such a dialogue with businesses from the Economic Community of Central African States (ECCAS). It is interesting that the African continent has found useful the experience of multilateral business integration within the EAEU for organising its own formats for business cooperation. In particular, consultations and the exchange of information with the ECCAS leadership on the organisation of work in the EAEU Business Council following the results of SPIEF-2022  and SPIEF-2023  were developed through the creation of the ECCAS Federation of Chambers of Commerce, which began work in December 2024. Together with the EAEU Business Council, it will act as a co-founder of the business dialogue "EAEU - ECCAS".

At the same time, we consider it important to offer several thoughts on how to strengthen relations between the EAEU and its African partners.

1) It is necessary to develop a network of trade and other agreements.

Additional opportunities for increasing our trade were provided by the launch of the African Continental Free Trade Area (AfCFTA) in January 2021, which unites 55 countries and 8 regional economic communities.

It is advisable to work out the issue of mutual simplification of trade procedures between the EAEU and the members of the AfCFTA, as well as the prospective conclusion of a preferential trade agreement. It seems absolutely necessary to ensure the “coupling and harmonisation of integrations”.

At the same time, operational results in the development of a network of trade agreements can be achieved by concluding them between the EAEU and key subregional associations, such as the Economic Community of Central African States.

2) It is necessary to form harmonized approaches to technical regulation and standardisation.

Standardisation and metrology are a necessary tool for the development of trade and economic relations and technological cooperation, contributing to a radical reduction in transaction costs. We see great potential in promoting cooperation in this area through the EEC. Thus, a lot of work was done in 2023 and 2024 by Rosstandart together with the standardisation and metrology bodies of African states on a bilateral basis. It is important that the EEC also take part in this work.

We believe it is important to use a flexible approach to the development of regulations, adapting standards to the realities of our partners where possible. For example, in order to increase agricultural exports to Africa, it is better to adopt adjusted requirements for manufactured products while unconditionally observing the safety of manufactured products. A mandatory condition for this may be a ban on the sale of relevant products on the territory of the EAEU, as well as the creation of a special register of exporters of adapted products which have the right to manufacture and supply products according to simplified requirements.

3) It is important to increase the involvement of regional businesses in trade and economic cooperation with Africa.

Thus, during the First Ministerial Conference of the Russia-Africa Partnership Forum, an initiative was presented to "secure" the supervision of foreign economic activity with individual African countries for Russian regions. It received the support of Dmitry Volvach, Deputy Minister of Economic Development of the Russian Federation, who oversees the foreign economic activity of Russian regions.

4) In conditions where an information deficit exists, business can effectively work through the largest business associations as "entry and assembly points" of mutual interests.

The EAEU Business Council and its member organisations are ready to act as such "gates" for African business in the EAEU. The development of cooperation with key African financial institutions, such as Afreximbank, also seems very promising. The RSPP and the EAEU Business Council are ready to help Eurasian and African businesses “find each other”. In particular, relevant issues were discussed on the sidelines of the First Ministerial Conference of the Russia-Africa Partnership Forum during a meeting between Eldar Alisherov, member of the Board (Minister) of the EEC, and George Elombi, the Executive Vice President of the African Export-Import Bank (Afreximbank), with the participation of representatives of the EAEU Business Council. The parties agreed to work out issues of forming a plan of joint events, within the framework of which it will be possible to offer business platforms for direct communication. 

5) A more active use of the Unified System of Tariff Preferences (USTP) of the EAEU will help increase African exports to the EAEU.

In the 1960s, the USSR became one of the initiators of the creation of a global system of preferences, which provided for the provision of asymmetric benefits to partners from developing countries. Within the framework of the USTP of the EAEU, when importing goods to the EAEU from 29 developing countries and 48 least developed countries (LDCs), special benefits are provided in the form of reduced customs duties for products from developing countries and their cancellation for LDCs. In total, tariff preferences within the EAEU are provided for 63 groups of the Eurasian Economic Union's Commodity Nomenclature of Foreign Economic Activity of the EAEU for developing countries and 91 groups of the Eurasian Economic Union's Commodity Nomenclature of Foreign Economic Activity for LDCs.

A distinctive feature of the USTP of the EAEU is that it applies not only to raw materials, but also to products with high added value. It is important to continue developing the USTP and raising business awareness of its capabilities. It makes sense to extend it not only to individual categories of countries, but also to take into account their membership in integration associations when providing benefits.

6) To reduce the potential negative impact on trade from unfriendly countries, it is necessary to strengthen the role of national currencies in payments and settlements, as well as to develop alternative payment mechanisms.

Trade imbalances complicate the use of national currencies in foreign economic activity involving African countries. A possible solution could be “trade concentration” in subregional country hubs that consolidate Africa - EAEU trade flows. This will make it possible to ensure greater balance in the use of national currencies in trade settlements. In addition, it seems important to use the opportunity for countertrade to avoid the potential negative impact of third countries on our cooperation.