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Russia Ready To Abolish the Dollar From Its Deals With Africa

Increasingly active commercially in Africa, Russia intends to put in place non-dollar transaction settlement systems. But the financial instability of some of its customers is problematic.

“I think it’s possible to use other currencies in Africa [than the dollar],” Dimitri Mazepine, co-owner of Russia’s largest fertilizer manufacturer, Uralchem, told Reuters. Uralkali Russian fertilizer. “We know that the VTB [Russian public foreign trade bank] plans to expand its activities in the region. We could therefore switch to settlements in the currencies that best suit the lender. “

Earlier this month, the Russian authorities announced plans to take all necessary measures to reduce the dollarization of the country’s economy. “Russian companies are ready to find an alternative to the dollar in mutual agreements with countries on the African continent,” said Dmitry Mazepin, who is also the chairman of the Russia-Zimbabwe Business Council. The main objective of this project is to make the use of rubles instead of dollars by the major Russian exporters more profitable.

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This measure would aim to protect the country’s economy against impending sanctions imposed by the United States, which threaten to ban investment in Russia’s sovereign bonds, as well as to cut off the country from dollar transactions.

The head of the bilateral structure also explained that Russian companies still face difficulties in doing business in Africa, logistics being one of their main problems. “Not all African countries have access to the sea or the ocean. All the territories do not have railways, “explained Dimitri Mazepine.

In his view, financial guarantees are considered another important problem. “It is important to put in place payment guarantees, because most countries are very unstable from a financial point of view,” he said. 

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Written by MT

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