Tundu Lissu, the head of Tanzania's largest opposition CHADEMA, has called out President John Magufuli and the CCM government for committing electoral fraud. "We didn't have an election. We got a complete fraud," Lissu tells The Africa Report.
France-Africa: Trade romance back on track
It’s been a tough winter for France’s President François Hollande. In November ratings agency Standard & Poor’s downgraded the country’s sovereign credit rating from AA+ to AA.
In December, unemployment hit a record high with 11.1% of the population out of work, while gross domestic product growth trundled along barely above zero.
Ten years ago it was difficult to recruit for Africa. Today, there are very good people who are interested
Though France has heavy-weight economic interests in Africa such as oil giant Total, port operator Bolloré and construction company Bouygues, in recent years French companies have faced difficulties on the continent.
Areva, France’s premier nuclear power generator, is renegotiating its contract with the government of Niger.
The strong engagement of China and India has weakened France’s positions in countries that have long maintained strong ties with Paris and French companies.
The French finance minister Pierre Moscovici argues that France and China are approaching Africa with different goals: “Our strategy differs from China’s in that it is more disinterested and we pay more attention to development objectives.”
Françafrique networks – those personal ties created between French and African political, economic and security elites – have been an important foundation for Franco-African ties since the colonial period.
Several French governments have promised to normalise relations and put an end to such networks, but there has been little appreciable impact.
Moscovici says that Paris “must strive for transparency and good governance”.
He told The Africa Report: “At the last general assembly of the World Bank, I signed a financial facility in the domain of the extractive industries in order to stop the stealing of these rents and to fight against opacity and corruption.”
The economic strategy of looking to Africa to bolster French growth was in part behind the December summit in Paris in which around 40 African leaders were wined and dined as diplomats sought to restore damaged relationships.
The second half of 2013 brought the signing of a spate of lucrative contracts, providing a much-needed fillip to French industry.
Defence contractor Thales penned three agreements worth several hundred million euros in South Africa and Egypt.
In June, construction firm Eiffage won a €26m ($35m) contract for building work at the container terminal in Lomé, Togo.
September brought news of a €200m deal for the Mozambican government to buy 200 fishing trawlers and six patrol boats from Cherbourg-based shipbuilder Constructions Mécaniques de Normandie.
In October, Hollande ended a visit to South Africa by announcing the “deal of the century” – the signing of a €3.8bn agreement for French rolling-stock manufacturer Alstom to provide 600 trains and 3,600 wagons to the Passenger Rail Agency of South Africa between 2015 and 2025.
No sooner had the ink dried on this contract than the champagne was brought out again to toast a €1.5bn deal agreed between the South African government and French energy giant GDF SUEZ to build a €1.5bn thermal power plant.
Trade for aid
France’s economic strategy is not without a price.
In order to achieve France’s goal of doubling trade with Africa from its current level of around €90bn, it has also pledged to increase its aid to the continent, which ran at around €10bn between 2008-2013, to €20bn during the next five years.
Also helping to support France’s soft power are the 171 French schools throughout the region. Teaching a French curriculum, they are a popular choice for Africa’s business and political elite. There are 110,000 students in the institutions’ classrooms.
French exports are moving in the right direction. Between 2004 and 2012 exports to Africa jumped 55% (compared to a worldwide average of 28%), making it the second-largest growth area for French exports after Asia, which grew by 109%.
But these figures can be misleading because trade levels reflect a relatively low base. French export revenue from Africa was worth €44.3bn in 2012, meaning the continent comprises only 11% off French firms’ international sales.
French officials argue that the financial benefits outweigh the costs. The finance ministry calculates that doubling exports to Africa over the next five years could translate into the creation of 200,000 new jobs in France.
However, the news is not all good. Analysis of trade patterns reveals that of the list of the eight largest recipient countries for French exports – which account for about three-quarters of exports to the continent – includes little or no significant change in trade levels in recent years.
Algeria – France’s 14th- largest trading partner, leads the list of African importers of French goods, well ahead of Morocco, Tunisia, South Africa, Egypt, Nigeria, Côte d’Ivoire and Senegal.
The difficulty for France is that it has been complacent and has lost a significant proportion of its market share to up-and-coming emerging economies.
According to a study in May 2012 carried out by the French customs agency, the Direction Générale des Douanes et Droits Indirects, France has seen its market share on the continent collapse from 16.2% in 2000 to 8.9% in 2010.
The number of French small and medium-sized enterprises (SMEs) operating in Algeria dropped 40% between 2005 and 2011, according to France’s foreign trade ministry.
BRICS scoop markets
China is the main reason for this loss of the commercial foothold. It has seen its market share rise from 3.4% to 12.5% between 2000 and 2010.
Companies from India, Russia and Brazil have played their role in weakening France’s position, too.
“The French had virtual monopolies and this was not sustainable. Given the level of growth in this area, it is to be expected that this has led to a decrease in our market share. However, it is essential that this turnover increases,” explains Alexandre Vilgrain, president of the Conseil Français des Investisseurs en Afrique and chief executive of agro-industrial group SOMDIAA.
Faced with competition from other countries, “French companies have to make a particular effort to make their prices competitive, particularly in the construction industry,” he added during an interview at the Club d’Entreprises Bordeaux Afrique.
If some mid-level technology export sectors – such as electrical equipment or computer manufacturers – will suffer, others – energy, telecoms, agribusiness, for example – could do well in the competitive environment.
Other companies will gain footholds in African markets, as digital security firm Gemalto has done. Lafarge, Schneider Electric and Aegys are interested in working on sustainable urbanisation projects.
Focusing on these areas of expertise, French companies are now seeking to leave their traditional spheres of influence and capture a share of the growth of large English- and Portuguese-speaking countries including South Africa, Angola, Nigeria, Mozambique, Tanzania and Kenya.
This has spurred Ubifrance, France’s export promotion agency, to open five new offices around Africa, most recently in September 2013 in Nairobi.
“These new markets can even attract well-established SMEs,” adds a spokesman from the Club d’Entreprises Bordeaux Afrique, which has already accompanied around 40 companies to Ghana, Nigeria, South Africa, Ethiopia and Angola.
The club is on track to add another four countries to the list next year.
France has undoubtedly redoubled its efforts to court African contracts. And analysts are optimistic the country can boost its export revenue in the coming years, pointing to the pro-Africa business strategies of firms such as advertising giant JCDecaux and software developer Dassault Systèmes.
“Ten years ago it was difficult to recruit for Africa. Today, there are very good people who are interested,” continues Vilgrain, who says that the boost in air transport links by firms such as Royal Air Maroc, Air France and Emirates will facilitate trade.
“Finance is also much easier to find through pan-African players such as Ecobank or Attijariwafa Bank, which charge competitive rates,” adds Guillem Batlle, head of the Sub-Saharan Africa and Indian Ocean division of employers’ union MEDEF International.
Today, the organisation provides support to some 5,000 French companies in Africa. Small though this number may be, it is five times the number of firms it helped 10 years ago and gives a clear indication of France’s plans for the future. ●