Russia and Africa Yet to Break Multitude of Business Barriers

Date:

By Kestér Kenn Klomegâh
The scramble for entrepreneurial influence in Africa by global players is a
geopolitical reality. In order to be part of this geopolitical arena, foreign corporate
business players have been devising different approaches and pathways for
revitalizing investment partnership and strengthening cooperation with potential
African partners, says Louis Gouend, founder of Hello Africa and founding
Executive Director of the African Business Club.

Thank you for reading this post, don't forget to subscribe!

In this interview taken by Kestér Kenn Klomegâh late May 2024, Louis Gouend
further gives useful insights into the dynamics why Russia and Africa ultimately
have to engage in business and economic sectors, to expand cooperation in both
regions, and seriously address the existing challenges facing entrepreneurs in
Russia and Africa. Here are the interview excerpts.

How would you characterize the level of business cooperation between
Russia and Africa?
Louis Gouend: In recent years, business relations between Russia and Africa have
acquired new dynamics. Russia is actively seeking opportunities to strengthen
economic ties outside traditional Western markets, and Africa is attractive as a
region experiencing rapid economic growth and rich natural resources. In this
case, special attention is paid to sectors such as energy, mining, agriculture and
educational projects. Russian companies are actively investing in mineral resource
development projects, and are also entering the agricultural sector of some African
countries.

ln your expert point of view, what are the basic challenges that
currently confronting businesses on both sides?
LG: There are several key difficulties that complicate business interaction between
Russia and Africa. These are, first of all, differences in business culture and legal
regulation, which complicate the process of doing business. Logistics challenges,
including the difficulty of transporting goods over long distances and across
multiple borders, also pose additional obstacles. The bureaucracy can be sluggish,
and corruption in some African countries makes the situation worse.

Another barrier is lack of knowledge. On one hand, Russian companies lack
knowledge of the environment and available high-quality analytical materials
about the African market, its specifics and risks. On the other hand, African
entrepreneurs and consumers have virtually no knowledge about Russian products
and coroprate business services. The main problem now is not funding, but the
lack of sufficient knowledge and contacts. One of the options for resolving this
issue is to increase Russian business missions to Africa, which will help promote
Russian goods and technologies on the African market. And vice versa, in terms of
bilateral cooperation.

Another factor limiting exports to Africa is the lack of special investment
agreements and lack of regulation in this direction. When we talk about
investment activity, the question arises about the lack of investment protection
agreements. Their absence prevents Russian companies from insuring
investments, which obviously prevents them from exporting to Africa.

Our club members are mainly representatives of various African diaspora who live
or studied in Russia and have been operating businesses in Russia or Africa. They
know the mentality and culture of both sides, and they have strong ties with both
sides, allowing them to be reliable bridges between Africa and Russia.

We work with African chambers of commerce, embassies, diaspora
representatives, as well as other regional associations and export companies.
Stakeholders include large and small businesses from Russia and Africa, various
industry associations, government agencies and diplomatic missions. To improve
business cooperation, the club plans to develop knowledge exchange programs,
conduct business forums and master classes, and create special working groups to
discuss specific issues and problems.

Why the creation of an African Business Club (ABC) becomes
necessary only now and what are its main goals?
LG: The growth of economic activity and the increase in the number of bilateral
projects between Russia and Africa required the creation of a platform to facilitate
these interactions. The African Business Club aims to be a platform where
entrepreneurs can share knowledge, network, explore new opportunities and solve
emerging problems together. The club’s main goals include strengthening trade
relations, stimulating investment and technological exchange.

Our clients value us because, first of all, we help adapt the work of a foreign
company to Russian realities, organize and debug many business processes within
various aspects and support the foreign company as a reliable partner. Companies

planning to invest in African economies will need strong ties to the African
government and partnerships with local businesses. How to contact the right
people? We are ready to help with this issue.

We offer advisory services to small, medium and global companies that want to
invest in the African continent. Thus, we promote entrepreneurship and help
create new trade ties between Russia and Africa. We attract potential investors
interested in financing projects in the African private sector. We create online
access to market research resources and relevant business contacts in Africa. We
publish position papers covering issues related to trade with Africa, investment,
regulation, policy and industry content.

The number of Russian companies wishing to enter the African market is growing
regularly, and this confirms our intentions to promote the development of bilateral
economic relations. On the other hand, we can note an increase in the number of
African companies wishing to develop close cooperation with their Russian
partners.

We offer a wide range of services for Russian companies entering the African
market. This includes market research, selection of partner companies, assistance
in organizing a business, personnel search, including offers for Russian citizens to
work in African companies.

Who are your current stakeholders and members? And how do you
plan to develop a common approach to increasing the level of business
cooperation between the two regions?
LG: Our club members are mainly representatives of various African diaspora who
live or studied in Russia and have operating businesses in Russia or Africa. They
know the mentality and culture of both sides, and they have strong ties with both
sides, allowing them to be a reliable bridge between Africa and Russia.

We work with African chambers of commerce, embassies, diaspora
representatives, as well as other regional associations and export companies.

Stakeholders include large and small businesses from Russia and Africa, various
industry associations, government agencies and diplomatic missions. To improve
business cooperation, the club plans to develop knowledge exchange programs,
conduct business forums and master classes, and create special working groups to
discuss specific issues and problems.

Why is the presence of African business in the Russian Federation
extremely low?
LG: A combination of bureaucratic barriers, lack of awareness of the economic
environment and opportunities, complex legal and regulatory frameworks, and
relatively high market entry costs deter African companies from actively doing
business in Russia.

What complimentary roles can African diplomatic missions and
business associations play here?
LG: The club has already been negotiating to simplify procedures for African
investors and exporters, and assisting in the creation of reliable and effective
communication channels between African companies and Russian regulators. As a
two-way street, African diplomatic missions can also act as a bridge, helping to
overcome cultural and administrative barriers, and actively participate in the
activities of the club, supporting its multifaceted initiatives at various levels.

Kestér Kenn Klomegâh
Kestér Kenn Klomegâh
Kestér Kenn Klomegâh researches Eurasia, Russia, Africa and BRICS. His focused interest includes geopolitical changes, foreign relations and economic development related questions in Africa with external countries. As a recipient of awards and honors, he features regularly in foreign and African media outlets with commentary, articles and insights on Africa's business landscape.

Share post:

Subscribe

Popular

More like this
Related

Tinubu Appoints APC Leaders Akande and Gawuna Appointed to Governing Councils of Universities and Polytechnics

Following President Bola Tinubu's directive to review the list...

Gunmen Attack Anambra State Council Headquarters, Vehicles Torched

Gunmen attacked the Ogbaru Local Government Headquarters in Anambra...

President Tinubu Directs Resignation of Bureau of Public Procurement Chief in Reorganization Effort

President Bola Tinubu has directed the resignation of Mamman...

Sallah: Beyond ram slaughtering by Abdulkabir Muhammed

The Islamic religion recognises two festivals: Eid-al-Fitr and Eid-al-Adha....