Over the past decade, Russia has expanded its interests and presence in Africa by investing in the mining sector and increasing military support to fragile states, mainly through private military contractors and mercenaries. One of Africa’s most prominent private military groups is the Wagner Group, believed to be funded by one of Russian President Vladimir Putin’s closest allies, Yevgeny Prigozhin, who is currently facing sanctions. This group is active in several fragile states, including Libya, Mali, Central African Republic (CAR) and Sudan.
As the war in Ukraine rages on, several countries have imposed sanctions, freezes on the Russian elite and attacks targeted to confiscate their assets. Africa faces two possible scenarios that could materialize as a result of the tightening of these regulations.
As sanctions continue, Russian-backed operations in Africa could find it difficult to continue being funded, leading to a Reduction could result in Russian operations on the continent. This, in turn, could lead to a subsequent reduction in the flow of illicit resources from the continent, as Russia’s arms and military corporate support has been linked to the illicit trade in minerals such as gold and diamonds.
Both rebels and governments in these countries are known to rely on this trade to fund their operations and arms purchases. Despite this, it remains unclear how these mining operations are being funded, who are the leading Russian players behind these operations, and where the funds stemming from these sales are going. In any case, the disclosure and subsequent sanctioning of oligarchs’ assets and wealth could play a significant role in exposing some of the cryptic actors involved in these countries’ mining operations.
Since In the Covid-19 crisis, African countries have changed their borrowing trends and are increasingly borrowing from private sector companies. Civil society organizations have long expressed unease about who these private sector actors are and the source of the funds they lend across Africa. Therefore, greater transparency in the Global North, including through targeted attacks on Russian oligarchs and their wealth, could improve understanding of whether private lenders in Africa have any ties to Russian wealth or other shady money.
Alternatively, however , Russian companies that are blacklisted and sanctioned in other parts of the world could use their operations in Africa to move, launder or continue to hide their funds, potentially leading to an increased Russian presence across the continent could lead. As such, they would continue to operate and find sanctuary in African countries, thus avoiding sanctions. With limited ability to move money and Russian oligarchs locked out of the international financial system, resource-rich African countries could be the next economic battleground that could offer oligarchs a lifeline away from tightening restrictions in the Global North.
As more countries impose sanctions and Russian oligarchs run out of places to hide their money, Africa could become the next option. To prevent this, African countries urgently need to increase financial transparency on the continent.
Francis Kairu is Policy Advisor at Tax Justice Network Africa