As second or third generations take over the reins of family businesses, they may be more open to outside investment to grow their companies. East Africa in particular has a rich seam of such businesses, which canny private-equity investors should be exploring.
Macron and the Chinese ghosts at the feast
French president Emmanuel Macron’s penchant for anglophone Africa has brought him deals and new friends. But can the self-styled saviour of Europe afford to keep badmouthing the Asian superpower?
“China is a great world power and has expanded its presence in many countries, especially in Africa, in recent years,” said France’s President Macron, stood alongside Djibouti President Ismail Omar Guelleh. “But what can look good in the short term […] can often end up being bad over the medium to long term.”
Macron was referring to the debts racked up by countries like Kenya and Zambia for infrastructure seen as poor value for money, but belies a wider Western insecurity as former zones of influence start to drift beyond their ambit.
That horse has already bolted. Macron’s Djiboutian host has already entered the new Great Game in the Horn of Africa, helping to eject an Emirati port company in favour of a newer bigger port complex paid for by the Chinese.
The French president – clearly not shy to fill a power vacuum – has taken up the role of European leadership with relish. Perhaps to get away from home troubles.
But also, because the vacuum is real, from the giant sucking sound created by Brexit, to the exit stage-right of Germany’s Angela Merkel. Macron has visited the continent more than any other European leader, pledging co-operation on jobs, and keeping the global conversation on climate change alive. Specifically, it’s France 10: UK 1.
- Certainly, the sight of Macron dancing at The Shrine in Lagos in July contrasted with the awkwardness of Theresa May’s own dance steps.
Others are more sceptical about Macron’s pivot to economic opportunity. Bloomberg points out that the French president’s visits to Kenya and Ethiopia – two countries never controlled by France – come against a backdrop of “deepening French military involvement across West Africa, where France has been battling militants since 2013, and recent airstrikes in Chad to support President Idriss Déby.” Djibouti, meanwhile, hosts France’s largest foreign military base.
French commercial activity in Africa has ticked up recently, however. Notably:
- Retailer Carrefour, which has attracted shoppers in malls across West Africa;
- Total, the only energy major to have made a serious investment into Nigeria in the past decade, whose Egina project adds an extra 10% onto Nigerian oil production;
- And Bolloré, whose ports contracts have recently been the subject of a police probe.
The recent trip had some clear wins, too:
- Vinci scored a $1.6bn road-building deal on Macron’s Kenya trip
- The trip to Ethiopia yielded a deal that includes helping Addis Ababa build a navy, as well as opportunities for air cooperation, joint military operations, training and equipment purchases.
Nevertheless, China is the ghost at the feast, and is increasingly hunting in France’s backyard – or “chasse gardée” as the French prefer to call it.
- “For example, Chinese loans to Côte d’Ivoire increased from zero in 2000 to $2.5bn between 2010 and 2015. China also has contracts to build sports facilities, develop a port and construct a highway from Abidjan to Grand Bassam”, writes Landry Signé at Brookings.
Bottom line: African leaders struggle to take advantage of the diplomatic and economic arbitrage opportunities provided by a rising China and pallid West.
But take advantage of it they must, if they are to meet their own urgent challenges; from missing jobs to rising temperatures to weak institutions.