Last week “The Ukrainian Review,” wrote about Russian propaganda in Africa. For Russia, the importance of its influence in this region, among others, lies in its economic potential for cooperation. But what about Ukrainian-African economic connections, what do they look like at the time of the war, and what perspectives do they have? About this and other issues, we have spoken with an expert in business and export development in non-standard markets Artem Gudkov.
Editor’s note: there are many various sources that provided information on the Russian influence in Africa. For example, BBC writes about Russia’s role in Africa and its private military contractor Wagner operated across the African continent and committed a lot of war crimes. A lot of articles are devoted to the analysis of the Russian propaganda machine in Africa, so we hope our readers understand how important it is to stand against it.
Ukrainian exports to African countries before the full-scale invasion
“Unfortunately, the export of Ukrainian goods to Africa is not characterized by diversity. A total of four commodity groups of goods, namely cereals, ferrous metals, ores, and fats of animal or vegetable origin, account for 87% of Ukraine’s exports to the countries of the continent. The specific weight of goods with a high added value or high-tech goods, on the other hand, tends to zero.
Our main trading partner in Africa remains to be Egypt, which accounts for 35% of exports. It is also worth noting that almost 70% of Ukrainian exports go to North Africa, where only about 209 million people live. Accordingly, about 1.2 billion people of Sub-Saharan African countries are almost not covered by Ukrainian exports.
Prospects for Ukrainian exports were and remain, but the focus needs to be shifted from the export of raw materials to high-tech products. Ukraine possesses the base of knowledge, know-how and experience of all technologies existing in mankind. Yes, maybe some of them are not the newest in the world, but due to their low cost and ease of repair, they should interest our African partners.”
Current situation in export to Africa
“As of now, it is extremely difficult to assess how much trade with African countries has fallen, since international trade data will not be available until the beginning of April. The Customs Service of Ukraine, for obvious reasons, only updated the information until March 2022 inclusive. Therefore, there is no complete picture yet.
The concentration on raw material exports has led to the fact that trade in low-margin goods outside the grain corridor (more detailed about this you can read here, — author’s note) is almost completely blocked. Buyers of goods do not want, and in fact should not, overpay for Ukrainian-made goods. They are looking for other, cheaper options in other countries.
Of course, logistics became a key problem. Even when you find a buyer, after laying the delivery route and calculating the cost of the product for the end customer, taking into account the delivery, the product becomes economically unprofitable either because of the price or because of the waiting time. We are not even talking about the fact that almost no one wants to make a prepayment to a country where there is an ongoing war, and then wait for 2-3 months for their goods, with rare exceptions.”
The potential of Ukrainian-African economic ties
“The continent’s potential is catastrophically underestimated by Ukrainian manufacturers, because Africa accounts for only 8% of our exports. We need to be inclusive in building our relations and trade with African countries. We should not focus on our own desires, but focus exclusively on the needs and expectations of our African partners. This approach will not only significantly simplify and speed up communication, but also bring mutual cooperation to a qualitatively new level.
Will the war affect all these processes? Definitely yes. The government is focused on military operations, economic stability and reconstruction of the country. This is a matter of our survival. Currently, it objectively does not have the opportunity to systematically build relations with the countries of the continent, especially Sub-Saharan Africa. At the same time, the business experiences a lack of working capital, unpredictability of work, power outages and is forced to solve the problems of complex and expensive logistics. All these factors will have a negative impact on Ukrainian-African trade in the near future.
However, no matter what, I am sure that Ukraine has a unique chance to significantly increase its post-war production potential by exporting goods with high added value, technologies and knowledge to the African continent.”
Russian influence on Ukrainian trade
“Historically, Ukraine has always been aloof from the processes taking place in Africa. No one sees us as a competitor or a powerful partner in the region. Of all the countries that are now actively fighting for African markets, Russia poses the greatest danger. Their production range, quality and price are practically identical to Ukrainian counterparts.
Russia has much better relations with Africa than we do, this is the result of history, their activity in the region, and them being more familiar to the Africans as a player. Yes, the aggressor interferes with our activities on the continent: previously simply by the fact of its presence and activities, because we compete with them in the supply of all goods and services. And now, realizing that Africa is our focus, they are using all available resources to prevent us from establishing relations and increasing economic cooperation.”
How Africans see Ukrainian goods
“Reputation is developed and formed over years. It is a complex, heterogeneous and non-linear process. If we are not talking about raw materials, where the buyer is only interested in the price and speed of delivery, then as of now we have not yet earned our reputation.
The more quality Ukrainian goods will go to Africa, the longer Africans will use them and consume them, the better the attitude towards the brand «Ukraine» and «Made in Ukraine» will be, and the higher consumer loyalty will be.
The old approaches no longer work. The concept of bilateral trade is morally outdated. New, progressive concepts of cooperation with African countries are needed, which would be productive and expedient for all parties. I believe in breaking stereotypes, I believe in Africa and in our common development.”