The African continent remains among the most attractive regions for investors around the world – both in terms of local market volumes and future growth potential. African countries boast a total population of over 1.4 bln people as of today and by 2030, half of them will be below the age of 25. Russian investors are also seriously considering the region. Participants in the African Path conference in Moscow, focused on regional opportunities for private investors and companies from Russia, discussed sectors of the economy that may be particularly appealing for launching new projects, as well as preferences available for foreign market players. The conference was organized by the Russian Chamber of Commerce and Industry’s Council on Financial, Industrial and Investment Policy, the Investment Networking Club, and the Bankovskoye Delo magazine.
Era of African projects
The African continent is indeed becoming an interesting and important region for Russian investors, the conference participants agreed. Cooperation between the countries will only become closer as an era of Russia-African investment projects is coming, according to Vladimir Gamza, Chair of the Russian Chamber of Commerce and Industry’s Council on Financial, Industrial and Investment Policy.
“I have a feeling that Russia is truly returning to the African continent. I remember the remarkable cooperation between our countries really well,” Vladimir Gamza noted.
He also stressed the role of the Chamber of Commerce and Industry’s Council on Financial, Industrial and Investment Policy in this process as the council consists of senior managers of various business associations, major companies, including those with enormous experience in investment project management.
“As the world order is changing and economic ties are transforming, regional unions are being created and new logistic links are developing, direct cooperation between Russia and Africa is extremely significant and the continent’s importance is growing every day both economically and geopolitically,” Vice President of the Moscow Chamber of Commerce and Industry Suren Vardanyan agrees.
Not dark, but golden
The consumer potential of the African market is really huge, and the opportunities for business development make the continent golden, says Zenebe Kinfu Tafesse, president of the Ethiopian Community and president of the Union of African Communities in Russia. According to Tafesse, now it is worthwhile to invest in almost all areas of the region’s economy, from agriculture and water supply to transport, education and medicine.
There is all the more reason for this as many countries of the continent have adopted measures to support foreign investors. For instance, Algeria offers preferences for those willing to invest in agriculture, pharmaceuticals, petrochemicals, renewable energy, as regulated be the 2022 law on investment. It includes tax and customs concessions, said Ambassador Extraordinary and Plenipotentiary of Algeria to Russia Smail Benamara.
The Republic of South Africa is also attractive with its special programs for motivating investors, as well as a developed transport infrastructure, growing industrial sector, mature business sector, and most importantly, the highest purchasing power on the continent, as well as low risks, says its Ambassador to Russia Mzuvukile Jeff Maqetuka.
The Republic of Uganda also offers favorable conditions for business: the country is known for its diverse nature and resources, notes Moses Kizige, Ambassador Extraordinary and Plenipotentiary of Uganda to Russia. According to the Ambassador of Democratic Republic of the Congo to Russia Ivan Vangu Ngimbi, investors could be interested in projects related to hydroelectric energy and petrochemicals, as well as large deposits of lithium and cobalt in the country.
Support at the start
Russian companies are also seeking to launch new projects in Africa, the conference participants noted. The efforts involve various initiatives in different sectors, such as the development of the TenChat new business social network which looks promising for the African market, the project founder Semyon Tenyaev noted when speaking about the network’s advantages. Alexei Bogdan, founder of the Onpoint Sustainability Technologies company, shared about opportunities for launching new energy projects. The CAV-ECO research and production association, a Russian developer and manufacturer of innovative municipal and industrial wastewater treatment equipment, also seeks to enter the African market, the company’s promotion director Alexander Shulgin said. Albert Dyabin, Director for Africa and the Middle East at Rusatom Automated Control Systems (part of Rosatom State Corporation), spoke about prospects for containerized mini-hydropower plants.
Entering new markets is obviously not always an easy process. As regards Africa, government support for business would be essential, Suren Vardanyan emphasized, adding that projects can be implemented as public-private partnerships. He specified that it is now particularly important to both thoroughly analyze areas of prospective cooperation and monitor the challenges that companies face, including as part of their efforts to implement investment projects.
Obviously, it is worth remembering that currently any business model can be adapted and implemented in Africa, according to Investment Networking Club founder Sergei Orekhanov. It is now most essential to convey this message to medium and even small businesses to open new opportunities for the sector on the golden continent.
By Olga Blinova