Brics summit: Russia’s bid to reclaim African influence and challenge dollar dominance

Following Russia's invasion of Ukraine in early 2022, the Kremlin has stepped up its efforts to actively woo African governments and business leaders away from 'Western interests' and into the Russian Federation’s camp, both politically and economically.

The Kremlin's move comes alongside the Wagner Group's ongoing mercenary operations in several African states, mainly in the form of propping up governments against internal armed opposition in return for access to and exploitation of precious and rare metals and minerals, as well as gemstone deposits such as diamonds and rubies.

Russia's stepped-up efforts to make real friends with more African states have intensified in the wake of Russia's 'Ukraine adventure', as it became increasingly clear to the Kremlin that the 'African lobby' among the 'non-aligned states' would be crucial in avoiding an even more severe curtailment of Russia's dwindling international influence.

Not only has Russian Foreign Minister Sergey Lavrov made a series of almost non-stop visits to African capitals, including two recent visits to South Africa, but a number of high-level summits and meetings of business and political leaders have taken place or are planned. 

Vladimir Putin to skip event

Upcoming and top of that list are the Second Russia-Africa Summit, due to take place in St Petersburg's Expo Forum, on July 27-28, and next month’s heads of state summit of the Brics (Brazil, Russia, India, China and South Africa) bloc.

The Brics meeting has avoided the spectre of Russian leader Vladimir Putin being arrested on arrival in host country South Africa, due to an arrest warrant issued by the International Criminal Court for alleged war crimes, over the abduction to Russia of tens of thousands of Ukrainian children.

Having been invited to attend in person by South African leader and current Brics chair, President Cyril Ramaphosa, Putin had been asked to reconsider attending, both by Ramaphosa during the recent effort by African leaders to broker a peace in Ukraine, and again more recently, but was insisting that he “come as usual”, like other Brics leaders attending the summit.

The issue came to a head this week as the official opposition and civil society groups in South Africa took legal measures to have Putin arrested if he set foot in the country.

The issue is a touchy one in that former Sudanese leader Omar al-Bashir avoided arrest in South Africa, also while on a formal state business, and while under similar indictment to Putin’s.

Responding to the bid to get a court ruling requiring no such repetition and Putin’s arrest, Ramaphosa said Monday that arresting the Russian leader risked war with Russia, and as a protector of South Africa’s security, he could not allow that to happen.

But courtroom disputes were rendered moot when Putin told Ramaphosa that he would agree to a prior proposal from the South Africans that he attend the summit virtually, with his Foreign Minister Lavrov in personal attendance.

The problem for Putin, and the reason he held out for a personal visit to South Africa for so long, is that the Brics summit is vital to his plans for the Russian Federation’s expanded realm of influence. 

Russia-Africa Summit

The second Russia-Africa Summit, due to start later this week, is direct evidence of that drive.

Russia is pushing hard at these upcoming summits, as well as bilaterally, to build diplomatic and business bridges in Africa, which Moscow had treated as anything but urgent before its invasion of Ukraine.

In effect, Wagner's extraction of what it could from Africa's wealth reserves represented the Kremlin's major push on the continent — before its current charm offensive.

With the potential 'Putin problem' now out of the way, the issues within Brics remain complicated, with Russia and China increasingly at odds over Africa's rich reserves of resources needed for both industrial and digital technologies.

Before bowing to the impossible position he put Ramaphosa in by insisting on attending the Brics summit in person, Putin had been "desperate", say seasoned diplomatic sources here, to put a "business as usual" face on his visit to Johannesburg.

There, he wanted to personally cement relations not only with current Brics members such as South Africa, but also with the several other African states that have shown interest in joining the Brics, most notably Ethiopia. 

Cohesive global strategy

The Chinese, for their part, see the Brics and their Belt and Road development projects as elements of a cohesive global strategy, most intensely focused on Africa, but where, as in Mali recently, Wagner agents have attacked and killed Chinese nationals competing for the extraction of gold reserves.

Notwithstanding mounting on-the-ground tensions with Russia, the Chinese are determined to expand Brics by bringing new African and other developing nation states into the bloc.

The idea is to make Brics not merely an ‘alternative politico-economic nexus’, in competition with the ‘West’, in general, and the USA in particular, but the next global leadership grouping of states.

China has articulated its long-term goals in different ways: it wants its yuan to be declared an "alternative international reserve currency", a role that the dollar has virtually exclusively played since the end of the Second World War.

Russia agrees, but also wants its ruble currency to be included in a basket of Brics currencies that together act as alternatives to the dollar.

Both countries therefore have an interest in seeing as many other states as possible join the Brics in order to move away from dollar-denominated trade in oil, gold and just about everything else on the international market. 

Political power bloc

While the dreams of both Beijing and Moscow for Brics to become a viable global economic and political power bloc are evident, it is far from clear that this goal is achievable.

This is not least because in much of Africa and the developing world, Russian and Chinese interests are not aligned, with each seeking its own hegemony and advantage in client states dependent on military and technological support, as well as economic investment and development finance.

This undercurrent of tension was why it was considered important in Russophile circles for Putin to attend the Brics summit in person, if possible, in order to counter what is likely to be the dominant presence of Chinese leader Xi.

Instead, Putin has settled for a virtual presence and the personal efforts of the seemingly indefatigable Minister Lavrov to paint a positive picture for current and future Brics members of the grouping's envisaged future global role, while moving closer to Moscow.

Whether or not he attends the summit in person, there is a clear determination on the part of Putin to put Russia firmly back on the African map where European nations historically held sway in the colonial era, and to return to a time when Russia and China together armed and supported almost all the 'revolutionary' and anti-colonial or 'anti-West' guerrilla and political movements that emerged in Africa.

Ironically, even then, decades ago, there were ongoing tensions and competition between Russia and China, each supporting selected and different 'revolutionary' liberation movements.

This is another reason why this week's 2nd Russia-Africa Summit — the first having been held in the Russian city of Sochi in 2019 — places such a strong emphasis on mutual 'economic and humanitarian' cooperation. 

Era of global change

As part of the summit's business programme, representatives from relevant Russian ministries, Russian and African business leaders and international relations experts will discuss the challenges facing Russia and African countries "in an era of global change".

The intention is to discuss "the most pressing issues and ways of solving them in order to promote the development of Russian-African relations in the economic, cultural and humanitarian spheres".

The forum's business programme consists of four major thematic areas covering all areas of cooperation between Russia and the African continent, including "The New Global Economy", "Integrated Security and Sovereign Development", "Cooperation in Science and Technology", and "Humanitarian and Social Sphere": Working Together for a New Quality of Life'.

“The Second Russia-Africa Summit and Russia-Africa Economic and Humanitarian Forum is set to become a unique platform for direct dialogue between business, government, and representatives of the creative and cultural communities of Russia and Africa,” the organisers of the forum said.

“I am confident that in the foreseeable future, all the forum events will lead to a strengthening of the ties between our regions and to effective co-operation,” said Anton Kobyakov, advisor to President Putin and Executive Secretary of the Organising Committee for Russia-Africa Events.

While the list of topics is comprehensive, most focus will be put on what the Russians are calling ‘The New Global Economy’, which will also cover the topic of ‘Doing Business in Africa: Risks, Market Conditions, Opportunities’.

Speakers are to tackle the issues of expanding business co-operation between Russia and African countries, and to discuss export potentials, in the face of “new challenges”.

This discussion includes Russian industrial heavy-hitters and will be moderated by Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, indicating directly that Russia is ‘wheeling out the big guns’ to make inroads into Africa, diplomatically and economically.

Another key event of that summit will be the ‘Integrated Security and Sovereign Development’ element, wherein the goals of the Russians are spelt out up front, with a planned discussion on ‘Russia and Africa: Partnership for Food Sovereignty’.

Russia having initially blocked crucial Ukrainian agricultural exports in the wake of the Kremlin’s invasion of its West-leaning neighbour – these being mainly staple cereals exported to food-insecure African and other developing states – and doing so potentially again from this week, this issue is bound to come up for hot debate as some African states attending will be directly affected by any new food blockade imposed by Russia.

Nevertheless, Russia says it intends to help Africa “develop agricultural infrastructure, mainly through the provision of Russian mineral fertilisers and agricultural machinery”.

While both China's long-discovered action programme in Africa and Russia's more recent renewed drive are predicated on the weakening - and perhaps even the demise - of the mighty US dollar as the world's trading and reserve currency, it is far from clear that either country can achieve this, even with plenty of help.

For one thing, the Russo-Ukrainian war has severely damaged the Russian economy, with the ruble falling to a fraction of its pre-war value, while Russia's domestic economy has slowed dramatically, with numerous shortages of consumer goods and critical technology industries apparent 18 months into the conflict, many due to sanctions but also to the sheer cost of the war.

Russia tried to counter this by forcing European countries dependent on Russian oil and gas to buy their energy resources from Russia in rubles.

This move failed, and most European countries, especially Germany, have since almost completely weaned themselves off their dependence on Russia for energy resources.

On the face of it, therefore, China appears to have the best chance of proposing and establishing another reserve or global trading currency.

But that is seemingly possible only on a superficial assessment – the Chinese economy, post disastrous Covid-19 lockdowns, is severely weakened and has slowed to a virtual standstill, with adjustment for inflation.

Compared with a year earlier, China's GDP in the April-June period was 6.3 per cent higher, that country’s national bureau of statistics said on Monday this week.

While this is an improvement from the 4.5 per cent annual growth pace for the first three months of 2023, it was well below expectations, with economists having forecast growth to accelerate to 7.3 per cent.

Worse than a sluggish economic recovery, which has seen China experience much-reduced post-Covid global exports, is the vast ‘internal debt’ being carried by local authorities that had been given almost free rein to incur debt to fuel the wildly expansive building boom in China over the past But the office and housing boom is now well and truly over, and the major companies involved are facing default.

As a result, China is saddled with an unserviceable collective debt of US$23 trillion, according to international investment bank Goldman Sachs, while vast swathes of newly or partially built apartments, offices and factories remain unoccupied.

While China, ironically, is one of the largest holders of US government treasury bonds – the means by which the USA funds its annual budgetary shortfalls – it holds barely $1 trillion out of a total sovereign US debt of $7.6 trillion.

That is far too little, on its own, to be able to seriously pressure the dollar through a Chinese sell-off of treasury notes, or even to meaningfully alleviate the self-inflicted Chinese collective debt.

This means that neither Russia, nor China, nor the two together, are in any position to offer the world a reserve currency, or even be part of a basket of currencies, since both ruble and yuan are inherently weak, and weakening.

Therefore, this week’s efforts by Russia to entice African states into closer ties, political and economic, plus China’s unrelenting pursuit of its long-term goal of challenging and overcoming America’s global economic dominance through the expansion of Brics, are vital initiatives for both states’ expansionist plans.

The more countries they can bring into a 'non-aligned' grouping offering a common collective of currencies with which to trade, the more likely such an alternative reserve currency system and trading bloc will become a reality.

But Russia and China alone cannot compete with the collective power of the 'global West', cannot replace existing Western-funded aid and development plans and programmes in Africa and elsewhere, and so even if another dozen or so states joined Brics, the grouping would still be a long way from being able to compete practically with dollar hegemony.

None of these realities seem to have affected the top leadership in either Beijing or Moscow — at least not yet.

But the economics of the global situation are such that, while neither country seems willing to adopt an approach other than 'opposing the West at every turn', neither country has the power, even with the help of numerous acolytes, to force the geopolitical and economic systemic change it wants to see.

Whatever comes out of this week's Africa-Russia summit and next month's Brics event — and with the 'Putin dilemma' no longer likely to dominate attention — it is already clear that a series of diplomatic forays, 'make nice' gestures to African leaders and stated intentions to change the global economic structure will not, taken together, be enough to achieve the desires of those who want to end the dominance of the dollar and the continued global power and influence of America and the West.