Information is key to reducing the perception of risk associated with investing in Africa

Ana de Vicente Lancho, Director General for Mediterranean and MENA Countries at the Spanish Secretariat of State for Trade, gave a presentation on the strategic partnership between Spain and Africa.

De Vicente noted that “progress has been made, things have moved forward compared to a few years ago. Spanish companies started investing abroad in the 1990s, a bit late, and they mainly looked to Latin America. Only recently have they expanded to Africa, and in this case, government support was key.”

The Secretary of State stressed that “Our exports to Africa have grown exponentially over the past 20 years, to €34,000 million in 2023, although most of them are concentrated in North Africa. This continent accounts for 5% of what we export worldwide, meaning we export more to Africa than to Latin America.”

The head of the Department of Trade explained that there is a need for improvement in the field of investment: “in 2022, only 1% of total Spanish investment will be allocated to Africa, for various reasons such as risk perception, lack of interest, lack of information…”

De Vicente also mentioned the Horizon Africa initiative, launched by the ministry three years ago, which aims to increase interest in the region, “because our geographical position is privileged, as a bridge between Spain and Africa. Spain was not present in Africa like other countries, so meetings and visits were organized, which led to new alliances, which strengthened relations with our partners. We launched a non-repayable fund for financial technical assistance to projects of Spanish companies…”

One of the barriers that investors have to overcome is the belief that there is very high risk in Africa, “but once the companies are there, that belief is reduced by 50%. We have to discover Africa, we have to travel, we have to speak French with them, we have to visit West Africa”

According to De Vicente “Information is key to reducing risk perception and it is not acquired through virtual conferences but on the ground, because trust is a key aspect in Africa.”

Transformational industries lead Africa’s promising sectors

The next session was devoted to the manufacturing industry, which is at the forefront and can significantly improve trade and investment between Africa and Spain.

The panel, moderated by Javier Fernández Arribas, Director of Atalayar, included François Mbongo Rafemo Bourdette, Minister of Industry of Gabon; Khaled Kaim, Senior Advisor to the Presidential Council of Libya; Mohammed Abdul-Razaq, Senior Vice President and Head of Capital Mobilization and Partnerships at Africa Finance Corporation; and Solange Amichia, General Manager of CEPICI in Côte d’Ivoire.

For Solange Amichia: “Côte d’Ivoire is the gateway to the West African market. The government’s goal is for the country to become a facilitator of the development of the digital economy. Digitalization is key to Africa’s dynamism. Looking ahead, by 2025, Côte d’Ivoire is expected to develop industry and create social health insurance, as well as better energy distribution.”

Referring to the processing industry, Solange stressed the importance of exporting mineral resources, which is a lever for the country’s economic growth and is included in the National Development Plan worth millions of dollars. Its implementation will require the private sector, including the private sector in Spain.

“Spain has opened the doors of Europe for us, from seed to end product. Ivory Coast’s ambition is to prioritize food security and be a country exporting fruit and vegetables to other regions,” he concluded.

Like Côte d’Ivoire, Gabon has also mobilised more than $3 billion in investment for the private sector to benefit, according to the country’s Industry Minister, François Mbongo Rafemo Bourdette.

To develop Gabon’s potential, the minister prioritized the development of the industrial sector by creating thousands of jobs: “The Gabonese industrial zone is net zero. We are the first exporters of oil in the region, the first producers of gold in the region and pioneers of transformation. All within the framework of the national plan. We hope that we will also be able to improve the transport and rail infrastructure to make it a strategic sector of the country, which is so badly needed.”

For his part, Khaled Kaim, senior adviser to the Libyan Presidential Council, stressed that “Libya is the gateway to the Mediterranean and Europe, a country with more than 30 years of union. Africa’s problem is based on the production system and the manufacturing industry. Without trade, Africa will not be able to improve in the industrial sector. The concerns of the African people are palpable”

Another problem that also affects the image of African countries is corruption. For Kaim, “The problem of corruption is very serious. Communication skills must be improved. We have the resources, but the problem is structural.”

The Minister also stressed that “Libya has many Spanish companies. The only thing missing is a direct flight between Madrid and Libya. Agriculture, along with minerals, are two key sectors in Spanish-Libyan relations. But it is essential that they are accompanied by infrastructure.”

For Mohammed Abdul-Razaq of Africa Finance Corporation: “Europe and Spain together are stronger as partners of Africa. Africa suffers from a process of relocation that can only be alleviated by investments from foreign partners.” For Abdul-Razaq, Africa suffers from competition from Southeast Asian countries that, in addition to industries, have investors: “African countries currently only have industry, we need investors.”