Russia, India to move away from US dollar in their trade exchanges with Africa
Trade exchanges between Russia and Africa should move away from the US dollar and be facilitated by transition to national currencies, Russian President Vladimir Putin has said, just as Tanzania and India have inked an agreement establishing a platform by which their bilateral trade will be carried out in their own currencies, not the dollar.
A more energetic transition to national currencies in financial payments and the establishment of new transport and logistics chains that will contribute to the development of reciprocal exchanges — this is how the Russian leader sees the future of his country’s relations with the African continent. “We are ready to shape the global agenda together, work together to strengthen fair and equitable interstate relations, improve mechanisms of mutually beneficial economic cooperation,” Putin said during the International Russia-Africa Parliamentary Conference that was recently (19-20 March) held in the Russian parliament.
According to the Russian leader, additional opportunities arise from the process of establishment of the African continental free trade zone that is expected to become a continental market with a combined GDP of more than $3 trillion.
In a separate but related development, a process of de-dollarization, meaning moving away from the US dollar as trade currency, is also affecting trade relations between India and Tanzania. The two countries have recently reached an agreement allowing them to trade in their own national currencies — the Tanzanian shilling and the Indian rupee — thus making the US dollar no longer be required for trade between the two nations. This new arrangement is based on the premise of Tanzanian businesses and banks possessing the tools to fully utilize the new framework to enable seamless payment in local currencies. Tanzania exports minerals, particularly gold, and agricultural products to India, whereas the south Asian nation imports petroleum products, pharmaceuticals, and engineering goods from Tanzania.
