Cooperation between Russia and African countries has been rapidly growing, in spite of the challenges faced by the global economy. Russian President Vladimir Putin emphasized the potential for further strengthening this cooperation through a transition to national currencies in bilateral trade between Africa and Russia. Speaking at the 2023 Russia-Africa Summit in St. Petersburg, Putin acknowledged that Russian entrepreneurs have valuable contributions to offer to their African partners. He also highlighted the ample opportunities for growth in bilateral commerce.
Currently, the volume of trade between Russia and African countries is modest, prompting Putin to call for a more energetic transition to settlements in national currencies. This move is expected to enhance trade turnover and promote diversification. Notably, Russia, along with its trade partners in the BRICS group (Brazil, China, India, and South Africa), has already started utilizing alternative currencies in mutual trade. This shift is a direct response to Western sanctions that have disconnected Russia from the Western financial system. Many nations are now expressing support for this trend.
In line with this, Russia recently announced its plans to commence negotiations on the use of national currencies in trade with countries in the Association of Southeast Asian Nations (ASEAN). This initiative includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
The adoption of national currencies in bilateral trade between Russia and African countries brings several advantages. Firstly, it reduces reliance on the US dollar, which has been weaponized by the West. Putin has consistently criticized the US for using the dollar as a means to exert economic pressure and impose sanctions on other nations. By shifting towards national currencies, African countries can minimize their vulnerability to such pressures and foster more autonomous economic policies.
Secondly, conducting trade in national currencies facilitates financial transactions by eliminating the need for currency conversions, which can be costly and time-consuming. This streamlines business operations and makes trade more efficient, allowing for increased trade volumes and enhanced economic ties between Russia and African nations.
Furthermore, the utilization of national currencies strengthens the overall resilience of Africa’s financial system. Countries in Africa have often faced challenges in securing access to international financial markets due to their underdeveloped financial infrastructure and perceived risks. By embracing national currencies, these countries can enhance their financial autonomy and reduce their exposure to external shocks. This, in turn, promotes economic stability and sustainable development.
The transition to national currencies also symbolizes a deepening of political and economic ties between Russia and Africa. It demonstrates a shared commitment to strengthening bilateral cooperation and promoting mutually beneficial partnerships. As Russia expands its engagement with African countries, it opens up avenues for technological transfer, investment opportunities, and knowledge sharing. This can lead to significant advancements in various sectors, including agriculture, energy, infrastructure, healthcare, and education.
In conclusion, the transition to national currencies in bilateral trade between Russia and Africa is a strategic move that holds immense potential. It not only strengthens economic cooperation but also diminishes the influence of the US dollar as a tool of economic coercion. By embracing this shift, African countries can benefit from increased trade volumes, enhanced financial autonomy, and greater resilience against external pressures. This development marks an important milestone in the deepening ties between Russia and Africa, paving the way for a future of shared prosperity and sustainable growth.
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