Russian President Vladimir Putin poses with African leaders at the forum in St Petersburg on Friday. EPA
Russian President Vladimir Putin poses with African leaders at the forum in St Petersburg on Friday. EPA
Russian President Vladimir Putin poses with African leaders at the forum in St Petersburg on Friday. EPA
Russian President Vladimir Putin poses with African leaders at the forum in St Petersburg on Friday. EPA

Putin courts allies with free grain and weapons pledge at Africa Summit


Mona Farag
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Russian President Vladimir Putin on Friday told African leaders that "unipolarity" of today's world no longer works, calling for multipolarity - different centres of power - across the globe.

Since the end of the Soviet Union, geopolitical analysts have talked about a "unipolar" world dominated by US economic and military power. This status quo has shifted with the rise of China, which has built a growing coalition of allies, creating multiple "poles" of power including the US, China, Europe, Latin America and South Asia.

Mr Putin was referring to the rising power of Brazil, India and China, which together with Russia and South Africa, the so-called Brics group, comprise about 30 per cent of global GDP.

Brics countries claim to challenge western economic and military hegemony through a multipolar alliance.

Mr Putin said remnants of colonial influence remained prevalent on the African continent.

His press secretary referred to "blatant, brazen interference by the United States, France and other states through their diplomatic missions in African countries and their attempts to put pressure on the leadership of these countries in order to prevent their active participation in the forum".

Vladimir Putin shakes hands with Mozambique President Filipe Nyusi at the summit in St Petersburg. EPA
Vladimir Putin shakes hands with Mozambique President Filipe Nyusi at the summit in St Petersburg. EPA

Speaking during the opening of a two-day Russia-Africa summit in St Petersburg, with 17 heads of African states in attendance, Mr Putin referred to the long-historically longstanding ties between Russia and Africa.

"We have provided steady support over the decades for African countries in the face of the ongoing presence of colonialist powers," he said.

He went on to list numerous influential African and Arab leaders and figures, whom he said had led the fight for independence from "the West."

He said it was up to Russia and Africa to call for a fairer global order.

On day two of the conference, Mr Putin said Russia was prepared to supply some weapons to Africa for nothing, to enhance security on the continent and to work more closely with African law enforcement and intelligence services.

He said Russia was increasing agricultural exports and would remain a reliable supplier of food, including free grain, to Africa. Moscow has also written off $23 billion of debt, he said, without saying over what time period or naming the countries involved.

Mr Putin said Moscow respected African leaders' peace proposal on Ukraine and was carefully studying it.

African leaders presented their peace initiative last month to Mr Putin and Ukrainian President Volodymyr Zelenskyy but it has failed to gain traction with either side.

The Black Sea Grain Initiative was expected to top the agenda, after Russia terminated the deal last week in protest at western sanctions.

Workers load grain at a grain port in Izmail, Ukraine, on April 26, 2023. AP
Workers load grain at a grain port in Izmail, Ukraine, on April 26, 2023. AP

The agreement, which began last July five months after Russia’s invasion of Ukraine, allowed about 33 million tonnes of Ukrainian grain to be safely exported through the Black Sea during the conflict, from three ports still under the control of Kyiv.

Free grain supply to Africa

Egyptian President Abdel Fattah El Sisi praised Mr Putin's commitment to grain exports during his address on the second say of the summit.

But despite Mr Putin offering to send free grain to the continent, the UN warned it would not make up for Moscow pulling out of the crucial deal.

Mr Putin said Russia was expecting record harvests this year and vowed his country would honour its role in ensuring global food security.

In his welcome address, Mr Putin told African leaders Russia would give “25,000 to 50,000 tonnes of grain aid to Burkina Faso, Zimbabwe, Mali, Somalia, Eritrea and the Central African Republic in the next three to four months, and will ensure free delivery service”.

In the year before the conflict, many of these countries imported significant amounts of Ukrainian grain, including Somalia, which relied on Ukraine for 80 per cent of its grain needs – about 100,000 tonnes of imports.

Mr Putin added that Russia was interested in developing military co-operation with the continent.

Who is attending?

Seventeen African leaders attended the Russia-Africa summit, less than half the number who attended the previous forum in 2019.

African diplomats from Ethiopia, South Sudan, Mali and South Africa arrived in St Petersburg, along with Presidents of the Central African Republic and Uganda, and leaders from Libya, Nigeria, Congo, Cameroon and Burkina Faso.

Zambia, Angola, Benin, Sudan and Algeria also attended.

On the sidelines of the summit Mr Putin on Wednesday met Mr El Sisi, hailing their growing bilateral trade that accounts for about one third of Russia’s trade with Africa.

Mr El Sisi lauded the “special character of relations” between the two countries, referring to Russia building Egypt’s first nuclear power plant.

“I’m sure that the Russia-Africa summit will achieve significant results, " Mr El Sisi said.

Mr Putin also held one-on-one talks with Ethiopia’s Prime Minister Abiy Ahmed, and said Russia would more than triple the number of Ethiopian students it hosts and cover their education costs.

Africa’s 54 nations make up the largest voting bloc at the UN and have been more divided than any other region on General Assembly resolutions criticising Russia’s actions in Ukraine.

The participants plan to adopt a final declaration at the summit and other documents on the main areas of Russia-Africa co-operation.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: July 28, 2023, 11:23 AM