Africa has sharply reduced the use of the ruble in payments for exports from Russia

In July 2023, African countries almost stopped paying in rubles for exports from Russia. At the same time, the use of “friendly” currencies, which include the yuan, has jumped. A view of the international port of Tangier in northern Morocco

In July 2023, African countries, when making payments to Russia for exports, mainly used the currencies of friendly countries and sharply reduced the share of the ruble, as follows from Bank of Russia statistics on the currency structure of payments for exports and imports with different parts of the world.

Thus, the share of currencies of friendly countries in payments for exports amounted to 78.8%. This is the highest level since January 2021 (earlier data not published).

The share of “unfriendly” currencies (primarily the dollar and the euro), on the contrary, decreased to 8.5 from 12.6% in June and 58.9% in May. In general, this figure has been decreasing since February 2023, but it is very volatile: in some months it was 20–30%, in others it was 50% and higher. Moreover, in January 2021, the share of dollars and euros in settlements reached 98.2%. Such jumps may be influenced by the relatively small volume of Russia’s trade with Africa - according to the Federal Customs Service as of July 2023, the share of this continent amounted to 3.7% of Russia’s total trade turnover. In 2022 it was even lower - 2.3%.

While abandoning the dollar and euro, African countries have predominantly used the ruble in recent months . Thus, its share in February 2023 was 82.4%, in March 2023 - 61.3%, in April - 44.9%, in May 35.2%, in June - 48.3%. However, in July the figure dropped to 12.7%, this is the minimum value for the year. The reduction occurred against the backdrop of a falling ruble exchange rate: just in July, the dollar went beyond 90 rubles.

The share of the ruble in payments for imports from Africa, in turn, amounted to 34% in July, the share of dollars and euros - 47.4%, and the share of other currencies - 18.7%.

Why is the payment structure changing?

“It is quite obvious that the vacant place of unfriendly countries that do not want to work with us is being occupied by states that are ready to cooperate with us, including African countries,” said acting head of the Federal Customs Service of Russia (FCS) Ruslan Davydov, commenting on the growth in the share of trade turnover with Africa from 2.3 to 3.7%.

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According to the latest data from the Federal Customs Service, in January 2023, the volume of exports from Russia amounted to $32.9 billion, imports - $22.2 billion. If in January the share of trade with Africa was comparable to the 2.3% that Davydov spoke about, then we can talk about about trade of approximately $750 million in exports and $500 million in imports. The service did not disclose later foreign trade data.

Most of the largest Russian banks have been disconnected from the SWIFT financial messaging system, which is used for currency transfers, since last year. In addition, transfers in dollars or euros become unavailable to sanctioned banks. Also, since the spring of 2022, foreign credit organizations began to cut off correspondent accounts of Russian banks, regardless of their location on sanctions lists, or increased verification of transfers from Russia.

Leading expert of TsMAKP Andrey Gnidchenko believes that the structure of currencies in trade with African countries is significantly influenced by individual large transactions. This is also evident from the Central Bank’s chart, where in certain months there were sharp spikes in the share of other currencies in exports.

The main currency that African countries can use is Chinese yuan and, to a lesser extent, Indian rupees, while the share of the ruble and the share of currencies of friendly countries can be volatile and change from month to month, Alexander Knobel, director of the Center for International Trade Research at RANEPA, told RBC : “ This is influenced by the geography of supplies and the range of goods, since RussiaIt sells different sets of goods with different conditions to different countries in Africa. In any case, in the future we will see a transition from the dollar and euro to the ruble, yuan, rupees, etc.” Volatility may also be affected by the availability and ease of use of specific currencies. Since the cost of goods in trade contracts is often still written in dollars, it is not only the exchange rate of the ruble or some other currency that is important, but how convenient it is to carry out the transaction in the chosen currency.

Traditionally, Russia’s main trading partners in Africa are Egypt and Algeria, where food and weapons were supplied, Gnidchenko lists. “Recently, the role of other countries, especially those with ports, could have increased - for example, Norilsk Nickel announced at the end of 2022 that it was considering the port of Tangier in Morocco as a new transshipment hub for non-ferrous metals. More active use of such hubs in recent months could have influenced the change in the structure of Russian exports to Africa in all aspects - geographical, commodity, and currency. However, the scale of the changes taking place is difficult to grasp due to the confidentiality of the relevant statistics,” he sums up.

How other countries calculate In total, in July 2023, the share of the ruble in payments for exports was 40.9%, the share of the dollar and euro - 27.6%, the share of other currencies - 31.5%, follows from the Central Bank data. Asia paid for exports mainly in rubles (39.6%) and the currencies of friendly countries (34.9%). When paying with American countries, the largest share is still occupied by the currencies of unfriendly countries, that is, dollars, euros, etc. - 79.3%. Europe, on the contrary, primarily uses rubles (since last spring, gas supplies to Europe are paid through mandatory currency conversion into rubles at Gazprombank). Their share was 49.5%, the share of dollars and euros was 34.6%, and the share of other currencies was 15.9%. The share of the ruble in settlements with Caribbean countries (which includes Cuba) is 66.5%, the share of the dollar and euro is 30.4%, and the share of other currencies is 3.1%.