2019 Tutu Fellow Ronak Gopaldas has written a paper for the Centre for African Studies at Nanyang Technological University titled Africa walks a tightrope - Economic implications of the Russian invasion of Ukraine. He begins by saying that Russian President Vladimir Putin’s decision to invade Ukraine has thrown global markets into disarray and threatens to derail what was an already fragile post-Covid global economic recovery. Beyond the global geopolitical and humanitarian implications his actions also have some serious ramifications for the global economy. He continues by saying that the question for Africa is whether policymakers can tactfully navigate the crisis.
He says African countries stand to benefit enormously from surging commodity prices, but whether the windfall will be enough to stem the global currency, inflation and interest rate shocks will depend on their willingness to make bold political decisions.
He continues: "Being on the wrong side of the geostrategic calculus could have devastating long-term economic and political consequences. Nigeria, Egypt, and South Africa are in the spotlight."
The article examines exchange rates in the wake of extensive sanctions against Russia, including implications for Africa as well as the flight of capital and expertise from the country. Ronak also looks at the implications for Africa as a result of commodities being affected: Russia was one of the world’s leading producers of fossil fuels, aluminum, nickel, platinum, and gold. But it is the increase in the price of wheat that is set to affect Africa most - African countries bought as much as $5 billion from Russia and Ukraine.
While the African Union denounced Russia's war, many African countries abstained from the UN General Assembly draft resolution; and many more were not present for the vote. Ronak looks at African relationships with China, too, which has strong ties to Russia and also abstained.
But, he notes, Africa does have some leverage. It is an important alternative provider of commodities Russia exported and can replace gaps in the market that it should use to their advantage.
You can read the full article at the Centre for African Studies site.
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