The Presence and Problem of Russian Oil Companies

Earlier this year, Russian oil companies were present across Africa. However, countries in the Gulf of Guinea — Cameroon, Nigeria, the Democratic Republic of Congo and Equatorial Guinea — would be most affected if the war in Ukraine becomes a prolonged battle as exploration activities by key Russian companies such as Lukoil and Tatneft are at risk. 

Before the Russian attack against Ukraine in February, Tatneft was testing as an outpost well in the Ghadames Basin; however, there are fears that drilling operations may halt due to financial challenges.

Moreover, in sub-Saharan Africa, where Russian company Lukoil is very active, final investment decisions and development projects are expected to be delayed in Cameroon and Ghana because of possible international sanctions against Lukoil. 

In Equatorial Guinea, Lukoil has already withdrawn from operating the giant and deep water Fortuna underdeveloped gas project, even as the contract remains valid. And in Libya, Congo and Egypt, crude oil and natural gas production also stands to suffer from the sanctions — including, for example, delays at loading terminals in Libya's Zueitina Port. 

Impending Food Scarcity in Africa

Russia’s war in Ukraine threatens both global and African food security, as Russia and Ukraine are essential grain exporters to the continent. The recent spike in food scarcity and price hikes, especially in countries reliant on imports from Russia and Ukraine, is of great concern. 

In 2020 alone, Africa imported $4 billion and $2.9 billion worth of agricultural products, respectively, from Russia and Ukraine. With the ongoing war in Ukraine, prices of corn, wheat and soybeans have surged. About 20 million people in the Sahel and West Africa do not have access to sufficient food. 

In Egypt, wheat is the main food item, representing about 39 percent of caloric intake per person. Also, the Egyptian government imports about 50 to 60 percent of its cereal from Russia and Ukraine, despite the government's efforts to diversify imports following the global food crisis of 2008. 

With the ongoing war stifling Ukrainian and Russian exports, Egypt needs urgent policy options to cut down dependence on Russian and Ukrainian wheat, at least for the short term. However, global wheat prices hit a 10-year high in March, posing a severe threat to the Egyptian government budget. The pressure and prices will likely increase further as the war continues, raising food security concerns, with citizens beginning to feel the impact. In Kenya and Sudan, high bread prices have already provoked anti-government protests. 

Additionally, rising fertilizer costs further compound these increasing food prices. According to the U.N., Russia is the highest exporter of nitrogen fertilizer and the second-highest exporter of phosphorous and potassium fertilizer globally. 

Several African countries rely on importing these Russian fertilizers, including Cameroon, Ghana, Senegal and Kenya. But following tough economic sanctions against Russia, its ability to ship fertilizer globally has taken a nose-dive, precipitating a major shortage. 

In Kenya, corn and cabbage farmers are scaling back on farming because of the exorbitant fertilizer prices that would certainly affect their profits. Others plan to skip fertilizing their farms, especially olive and orange groves farmers. This will lower production and, of course, the quality. 

Not All Negative: Opportunities for African Countries

With oil price volatility, compounded by fears of fuel scarcity and the European Union's decision to phase out the EU's dependency on Russian oil by May, Africa is looking for new energy sector investors in Europe who will soon no longer depend on Russian natural gas. 

According to the International Energy Agency, the EU buys 45 percent of its imported gas from Russia, offering African governments a huge potential energy market now that the EU is interested in Africa's abundant natural gas. 

Africa has started to embrace this unique opportunity. Algeria, Nigeria and Niger recently revived the proposed Trans-Saharan gas pipeline to Europe. The pipeline is expected to transmit about 30 billion cubic meters a year from Nigeria — through Niger and Algeria's strategic Mediterranean coast — to Europe while also supplying inland stations. 

Meanwhile, countries with substantial natural gas capacity like Senegal, Nigeria, Mozambique and Tanzania stand to benefit as well. Senegal alone has 40 trillion cubic meters in energy reserves, and Tanzania has the sixth-largest gas reserves in Africa. Tanzanian President Samia Suluhu Hassan sees the Russian-Ukrainian fight as an opportunity for the East African country to sell gas and reap enormous profits. 

Europe can directly tap into Africa's natural gas and diversify its supply in the wake of the current energy crisis. Importantly, it also enables Africa to generate critical and much-needed revenue sources for the continent's gas markets. 

When it comes to agriculture, Nigerian business mogul and Africa's richest man Aliko Dangote has taken advantage of the shortfall in Russian fertilizer exports by opening a $2.5 billion fertilizer plant in Nigeria's main economic hub, Lagos, with the intent of selling fertilizer to the continent as well as to the United States, Brazil and India. 

Dangote also plans to launch an oil refinery that would produce 650,000 barrels per day. Currently, the Dangote Group is the second-largest employer in Nigeria after the federal government, and a new plant is a tremendous opportunity to replace Russian fertilizer imports with Africans jobs that create warehousing, transport and logistics infrastructure that help to reduce poverty. 

Openings for Russia?

Ninety-three U.N. member countries voted to suspend Russia’s membership on the U.N. Human Rights Council on April 7. However, over 20 African countries did not vote, abstained from voting or voted no on the suspension — signaling that Russia may be able to continue its relationships with different governments in Africa based on economic, political and security cooperation. 

The Russian government and Russian private military contractors are providing varying levels of security support to Mali and the Central African Republic, while the Sudanese government remains open to a Russian naval base on its coast. Additionally, Russia continues to ship wheat to Sudan, Senegal and Mozambique among other countries.

Beyond this cooperation, Russia’s justification for its aggression is also gaining traction in different parts of Africa. South African President Cyril Ramaphosa blamed NATO expansion for the conflict and the Ugandan president’s son, Lt. General Muhoozi Kainerugaba, argued that there is strong support for Russian justifications of its aggression toward Ukraine. These statements come as Russian disinformation is targeting the Global South — including Africa — by using NATO expansion into eastern Europe and Western invasions of countries in the Middle East to garner support for Russia’s actions in Ukraine. 

Whether the war ends soon or becomes a prolonged battle, Russia will continue to cultivate economic, political and security relationships with countries across Africa. Without significant resources to address the challenges facing many African countries such as governance issues, poverty and terrorism, Russia will continue to focus on using low-cost tools at its disposal to exert influence. 

What Can the United States Do?

To reduce the effects that the Ukraine situation has on African countries and to curb Russian influence efforts, the United States and wealthy countries could make sure they maintain funding for organizations that are providing assistance to offset rising food and fuel prices.

The United States might also consider creating and implementing policies that incentivize relations between Africa and America, including in business sectors — such as support for bridging the infrastructure gap while advancing trade and investment for mutual growth. 

The African Continental Free Trade Agreement provides a unique opportunity for the United States to strengthen strategic partnerships with Africa by driving growth, especially with small- to medium-sized investments. Instruments such as the Africa Growth and Opportunity Act, Power Africa, PROSPER Africa, the Millennium Challenge Corporation and facilities through the U.S International Development Finance Corporation can be strengthened, promoted and leveraged more effectively and strategically to support Africa.