Faith Nyasuguta
Tanzania and Russia are actively working to increase bilateral trade by conducting transactions in their national currencies, according to Tanzania’s ambassador to Russia, Andrey Avetisyan. This initiative aims to reduce dependence on the US dollar, aligning with Russia’s broader strategy to enhance trade with African nations.
Ambassador Avetisyan, in an interview with the Russian newspaper Sputnik, revealed that discussions are underway to expand the use of national currencies, including those of China, India, and other BRICS countries, in trade agreements. “The prospects of transition to trade in national currencies are being discussed between our banks,” Avetisyan noted during the Valdai Discussion Club conference in Tanzania on Wednesday.
He further elaborated on the potential benefits for Tanzania, stating, “If Tanzanians see that Russia’s trade with China and India is almost entirely in national currencies, and India and China are Tanzania’s largest trading partners, then there are opportunities here. Indian rupees, Chinese yuan, and Russian rubles, I think, can be used by Tanzanians for offset schemes.”
The ambassador also mentioned the possibility of incorporating the currencies of other key trading partners, such as the UAE. This could allow the dirham, rupiah, yuan, and ruble to be mutually traded and complement each other in the region.
The Valdai Discussion Club’s second Russian-African conference in Dar es Salaam brought together over 40 specialists from Russia and East Africa. The event focused on exploring the evolving relationship between Russia and African states, building on the discussions from the second Russia-Africa Summit in St. Petersburg. Organizers hope that the insights gained from these discussions will help in the expert preparation of the third summit, which is also planned to take place in an African country.
This move towards using national currencies in trade is not new for Tanzania. In March 2023, Tanzania and India reached an agreement to eliminate the use of the US dollar in their bilateral trade. This change is part of a broader trend, as reported in March 2024, where the use of non-dollar currencies in international trade is becoming increasingly popular. Russia, along with the BRICS group of nations, has been a major proponent of this shift, particularly in its dealings with African countries.
Data from the Central Bank of Russia, as reported by Sputnik Africa, indicates a significant increase in the use of the Russian ruble for trade between Russia and Africa. The proportion of Russian-African trade conducted in rubles more than doubled from 21.9% in 2022 to 48.1% in 2023. Conversely, the share of trade conducted in so-called “unfriendly currencies” like the US dollar and euro has decreased sharply, from 45.1% to 20.5%.
This shift reflects a growing desire among these nations to reduce their reliance on Western currencies and strengthen economic ties through more localized and diverse financial systems.
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