How can Africa’s continental free trade agreement be moved forward from talk to action? An eventful week in Ghana ended with new promises from ... African governments and state parties to speed up processes towards the full realisation of the world’s largest free trade area – AfCFTA.
Within a few months, the adventure of BNP Paribas in French-speaking sub-Saharan Africa will come to an end, with the cinching of the sale of its last two major subsidiaries – in Côte d’Ivoire and Senegal. The heir to the Comptoir National d’Escompte de Paris – former sponsor of the “colonial banks” created in the 1850s to “transform into cash the bond indemnities granted to owners who had lost the ‘ownership’ of their slaves”, according to French historian Hubert Bonin – has followed the pace of a certain French capitalism in Africa, both in its advances and in its eventual decline.
From Senegal to Zaire
In the 1930s, the bank’s clients included the general government of Algeria and the general government of French Equatorial Africa. With the arrival of independence, the bank boasted its holdings in Mékambo’s iron ore and the manganese of Franceville, in Gabon, managed by the young company COMILOG.
In the mid-1970s, its vice-president, Pierre Moussa, said with pride: “We are involved in phosphates in Senegal, iron and copper in Mauritania, manganese in Gabon, and alongside our friends at Péchiney in bauxite, alumina and aluminium, mainly in Guinea and Cameroon. We are involved in a major copper project in Zaire”.
In late July, the French bank promised, more modestly, to maintain “privileged commercial relations” with BICIS and its buyer, the Franco-Senegalese financier Pathé Dione. Despite the denials of its management, three years ago, at the time of the sale of five subsidiaries – including those in Gabon, Tunisia and Guinea – the strategic choice to leave the continent had already been decided for a long time by BNP Paribas CEO Jean-Laurent Bonnafé, a fellow École Polytechnique graduate of Tidjane Thiam and Frédéric Oudéa (the future ex-CEO of Société Générale).
A whole piece of French history in African finance is coming to an end with these divestments
“BNP has historically taken strong positions to support French companies in Africa. In particular, it opened a subsidiary in Niger to support French mining companies. It is a bank with very rigorous positioning, not to say elitist. It is voluntarily restrictive in the type of clients it chooses”, says Paul Derreumaux, co-founder of Bank of Africa. While he does not rule out the fact that the decline of French companies in these markets may have played a role in BNP’s decision, he does not believe that this is the only factor.
Others point to the stiff competition from Moroccan, Nigerian and pan-African banks, the low share of Africa in BNP’s revenues and the fines imposed by the United States for violating the embargo against Sudan, as well as the reputational, human and economic costs of complying with banking compliance rules.
A short reprieve
Other observers see the three-year reprieve granted to the Abidjan and Dakar branches as acquiescence to pressure from Paris, which was only sufficient for a short time. “It is clear that a whole piece of French history in African finance is coming to an end with these divestments,” says Derreumaux. The Franco-Malian financier warns of the danger of favouring a banking activity reduced to large-scale fund-raising on the international markets – one of BNP’s specialities on the continent – to the detriment of the “major role” that local banks must play in financing the local economy, SMEs, the local population, and the provision of banking services.
Without commenting on the situation of BNP, of which he is a director of the Ivorian subsidiary, Etienne Giros, President of the French Council of Investors in Africa (CIAN), recognises that new players have arrived on the African markets and have shaken up the positions of certain historical operators.
“However, we must not bow our heads and beat our chests. Our job is to explain that there are certainly risks — as there are everywhere – but also to measure them objectively and to provide answers, to ensure that the perception of risk is not excessive”.
This is a battle that will be waged without BNP Paribas, which is determined to be “the bank of a changing world”, and in the case of Africa … without it.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options