loader image

Free trade initiative between North Africa and Russia

Home > Blog > Economic > Free trade initiative between North Africa and Russia

Free trade initiative between North Africa and Russia

Russia aims to strengthen its ties with Africa by establishing a free trade zone with North African countries. This free trade agreement aims to boost commercial exchanges between Russia and the Maghreb nations, fostering economic growth for both parties. It’s worth noting that trade between North African countries and Russia has steadily increased over the past two decades.

Objectives of the free trade agreement

Russia aims to enhance its collaboration with Africa by creating a free trade zone with North African countries.

The Russian President states that free trade agreement projects are currently ongoing. The primary goal is to strengthen bilateral relations between the two sides. Russia views African nations as « friends » and seeks to deepen this relationship in political and economic domains. For instance, during the Russia-Africa summit. H.E. Aziz Akhannouch, Morocco’s Prime Minister, confirmed Morocco’s commitment to strengthening its ties with Russia.

Russia is known for its robust diplomacy, relying on its military power to establish connections with other countries. More precisely, they provide military training, services, and equipment. From 2018 to 2022, Russia’s arms exports to Africa accounted for approximately 40 % of its total exports, making it the largest arms exporter to Africa from Eastern Europe.

Pros and Cons of a Free Trade Agreement

On one hand, a free trade agreement will boost trade between Russia and North Africa, logically supporting economic growth for both parties.

Investments will be encouraged due to the absence of tariff barriers, which will also contribute to an improvement in the business climate. This can lead to foreign currency inflow and expertise transfer, especially in Africa’s mining operations. Technology transfers will also benefit local companies.

On the other hand, challenges may arise. One of the biggest criticisms is the overexploitation of Africa’s natural resources. Africa is rich in natural resources but needs more expertise in their exploitation. Another concern is Africa’s trade deficit. The continent imports more than it exports, and free trade agreements could worsen this situation.

The advantages or disadvantages of a free trade agreement heavily depend on the agreement’s terms and conditions. North African countries must be able to well-negotiate to ensure a sum-positive game. Like the vast privatization project in Egypt which will allow the sale of assets for nearly 1.9 billion USD.

Russia’s bilateral relations with Maghreb countries

Russia maintains different relationships with each North African country.

For example, trade between Russia and Tunisia is still in its early stages. Among the Maghreb countries, Algeria has the most substantial ties with Russia. Their collaboration began before Algeria’s independence when Russia supported Algeria’s revolution. The relationship between the two countries has improved significantly. In this regard, Russia and Algeria have signed 120 strategic agreements in various fields.

Primarily in the military domain, Algeria seeks to enhance its exchanges with Russia further, especially considering that Algeria allocates 5 % of its GDP to military spending. Furthermore, Algeria places great importance on diversifying its imports, with the majority coming from Russia, China, Turkey, France, and India. Relationship with Russia extends into various areas, including economics, technology, energy, and culture. For example, Algeria is currently operating two nuclear reactors with the strategic potential of Russia’s expertise. In return, Russia recently inaugurated a square in Moscow in the cultural realm in honor of a national Algerian hero, Emir Abdelkader.

In 2021, Russia’s exports to Algeria were valued at 1.48 billion USD, with navigation equipment being the main product exported. Over the past 20 years, exports to Algeria have grown at an annual rate of 12.1 %. In the same year, Algeria’s exports to Russia amounted to 17.3 million USD, with fruits and hydrogen being the main products exported. Exports to Russia increased by 7.54 % over 20 years.

Following Algeria, Morocco ranks second in the number of agreements signed with Russia. The annual trade between Morocco and Russia reaches an impressive average of 1.71 billion USD. During the Africa-Russia summit, Russia mentioned that its relations with Morocco extend across many areas, including the economy, finance, tourism, and other strategic sectors. A Russian representative at the summit, Mr. Zakharova, stated that Morocco is one of Russia’s leading partners in Africa. Looking ahead, she indicated that Russia is interested in expanding exchanges in energy and technology.

In 2021, Russia exported 1.61 billion USD worth of goods to Morocco, coal briquettes were the main product. Russia’s exports to Morocco have increased at an average annual rate of 7.43 % since the 1990s. In comparison, Morocco’s exports to Russia were valued at 383 million USD in the same year, citrus fruits and textiles were the main products. Trade with Russia increased by 13 % annually over the past 20 years.

For Egypt, the largest trade partner with Russia in the region, Egypt is the top partner for Russia in terms of trade. In 2021, Russia exported 5.3 billion USD to Egypt, wheat is the main product. Conversely, Egypt exported 554 million USD to Russia. Over the past 20 years, trade between the two countries has increased at an average rate of 11 %.

Share this article
Share this Article:
Join our newsletter

Join the latest releases and tips, interesting articles, and exclusive interviews in your inbox every week.