Russian President, Vladimir Putin, has called for a shift in trade relations between Africa and Russia away from the US dollar towards national currencies. In his bid to promote financial independence, Putin cited the recent agreement signed between Tanzania and India as an example of how bilateral trade can be conducted without reliance on the dollar. The agreement stipulates that trade between the two nations will be facilitated using their respective currencies.
This move by the Russian President marks a significant shift in international trade dynamics and underscores the need for countries to diversify their financial transactions. By advocating for the use of national currencies, Putin seeks to reduce the dependence of African nations on the US dollar and promote economic growth and development across the continent. As African nations increasingly seek to strengthen their economies and boost trade, this shift towards national currencies is likely to become a key feature of future trade agreements.
The pre-eminence of the dollar continues because of the overwhelming advantages of using the most widely accepted currency for business.
However, international sanctions against Russia, led by the US, have begun to erode the dollar’s dominance of the international oil trade.
Indeed, most deals with India have been settled in other currencies.
India’s oil trade is strong evidence that a shift to other currencies could be a sustainable solution and response to the sanctions resulting from the war in Ukraine.
The move away from the dollar has also been embraced by India and Tanzania, which recently reached an agreement to trade in their national currencies, thus making the US dollar no longer necessary for trade between the two nations.