Doing Business in Africa: Risks, Conditions, and Opportunities

Representatives from 49 out of 54 African countries attended the second "Russia–Africa" Summit.

Participants of one of the main sessions, "Doing Business in Africa: Risks, Conditions, and Opportunities" at the second Russia-Africa Forum, highlighted the difficulties of conducting business on the African continent. "A coordinating center is needed to collect information and define a roadmap," stated Sergei Katyrin, President of the Chamber of Commerce and Industry (TPP). He emphasized the importance of supporting small and medium-sized businesses aiming to enter the African market, as large companies find it easier to manage. The discussion was moderated by Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs (RSPP), who noted the necessity of stimulating the development of multifaceted mechanisms to promote cooperation, involving SMEs and regions through project financing, and so on.

All session participants acknowledged the prospects for Russian businesses in infrastructure development. "The potential for developing relations is much greater than it is now," said Oleg Belozerov, General Director and Chairman of the Board of JSC Russian Railways. JSC Russian Railways is ready to share its competencies with African colleagues – not only in transportation but also in logistics, engineering, railway management, transport engineering, R&D, experience exchange, and personnel training.

Marie-Therese Mfoula Edjomo, Commissioner for Regional Planning and Infrastructure of the Economic Community of Central African States, noted ample opportunities in Africa for potential participants in air, water, and railway transport.

"We see enormous potential for expanding interaction between Russia and Africa, and as the largest transport company, we are ready to serve as a bridge between our economies," said Andrey Severilov, Chairman of the Board of Directors of FESCO. "By the end of the year, we plan to open a direct service to Morocco and are also negotiating with partners in Algeria and Tunisia."

"Currently, we lack a single window for resolving business development issues on the African continent. Many issues are addressed in a fragmented manner. Therefore, it is crucial to create a unified coordination body to promote Russian business and gather requests from African partners," he added.

Viktor Fokin, General Director of the Industrial Technologies Center, noted: "The energy deficit in African countries, including infrastructure shortage, is one of the key obstacles to economic growth. Nearly half of Africa's generation capacity is in Egypt and South Africa, which is in surplus relative to their domestic consumption. For instance, Egypt has 45 GW of capacity and consumes 30 GW."

"One way to address the issue is to optimize the power grid, including within existing energy pools like the East African Power Pool, Southern African Power Pool, and others (five in total), by interconnecting their grids and utilizing surplus capacity."

"This opens up a vast sector for cooperation not only for large businesses but also for innovative companies with world-class products for energy infrastructure, many of which are successfully used in Russia and have international certification. There is a prospect of establishing joint ventures, including based on existing specialized enterprises."

"For example, a conductor for high-voltage transmission lines developed by the Industrial Technologies Center. The technology is unique (40 patents from Germany, France, and Austria), certified for worldwide application in Germany. The product significantly reduces transmission line costs and energy losses. We can offer similar world-class technical solutions for the railway and mining industries. Overall, solutions from many Russian companies covering almost all economic sectors will ensure real technological diversification, and hence independence for African countries.

High-temperature conductors, which provide the required throughput capacity under Africa's climatic conditions without cost escalation, are particularly promising."

"Of course, there are problems that need to be addressed. Sanctions have significantly complicated payments for supplies and logistics, limiting the competitiveness of Russian proposals and creating issues with payment infrastructure under the new conditions. Joint and systematic efforts by the state and business are required."