Economic War in Africa: Will the Franco-German Battle take place?


Economic War in Africa: Will the Franco-German Battle take place?
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At a time when the French lose their market share in Africa, Germany wants to become more offensive. Her Chancellor Angela Merkel announced the color at the "Compact with Africa" ​​forum with the creation of a € 1 billion fund to support investment by European SMEs on the African continent. And if the fight would take place …

Berlin plans to invest more than a billion euros in Africa to support European companies, while France has lost market share on the continent for several years. This allocation is used to provide loans and equity to European and German SMEs intending to invest in Africa. Can the device, as seen by companies, remix cards between Paris and Berlin?

Africa has enormous growth potential for Berlin

"We have been very focused on Asia for many years and I think that in the future we need to focus more on Africa," said the German Chancellor during this initiative, which was launched during the German Council of Europe's G20 last year 12 African countries were involved. Angela Merkel believes that the African continent has "enormous growth potential". If the smile is heard in Paris, the analysis shows an inevitable fight with Berlin.

Paris had already set up a similar fund for SMEs. More …

This new interest of Germany in the African economies is found in France again. In 2017, President Emmanuel Macron announced in Ouagadougou, Burkina Faso, the launch of a similar € 1 billion fund for African and French SMEs seeking to invest in Africa. However, unlike the Germans, France was for a long time an important economic player on the continent, especially by large historical groups such as Total in hydrocarbons, Societe Generale in the bank or Peugeot in the automobile.

French market shares lowest in Africa in 2017

Over the past fifteen years, French market shares have continued to decline across the continent, reaching their lowest level in 2017. According to a study by the French foreign-exchange insurance company (COFACE), the French export market shares to Africa published in June 2018 were "halved," from 11 % in 2001 to 5.5% in 2017 ", as Guy Gweth, an expert on intelligence, notes economy and founder of Kowdy's company Lionel Zinsou, commercial banker and president of PAI Partners, on 6 May 2015 on RFI, despite the tenacity the latter … Emission here to be heard again: Africa – France: Towards a new partnership? … These losses benefited China and India, whose cheap products reached the continent thanks to an increasingly aggressive economic strategy.

Turks and Chinese have rolled French exports to Africa

In the machinery and equipment sector, for example, France's share of exports to Africa halved between 2001 (12%) and 2017 (6%) due to the EU's competition from Turkey, and above all China COFACE says that "a quarter of total exports of machinery have been multiplied." There are major differences in some French-speaking African countries such as Algeria, Côte d Ivoire, Cameroon and Senegal.

India has plagued the pharmaceutical industry by injecting generic medicines

In the field of electrical and electronic equipment, France's market share fell to 3% by 2006 (up from 16% in 2001). The same applies to the pharmaceutical sector, where the export market share was almost halved over the same period (from 33% in 2001 to 19% in 2017), benefiting India, whose weight has increased. Growth of 5% to 18%, driven by the low-cost generic sector. Moroccans and Tunisians are also not excluded, adds the founder of Knowdys Consulting Group.

The decline in French exports favors new players

"French exports to Africa have not lost in value, but they have not increased," less alarmingly, "Étienne Vauchez", president of the Association of Specialized International Trade Organizations (OSCI). However, the development of the private consumer market on the continent partly explains the decline in French exports to the benefit of new players. "The French failed to capture the intricacies of the African economy, which was over 80% dominated by the informal economy," says Etienne Vauchez.

French products are expensive for a clientele and not necessarily easy

"The French wanted to trade with the emerging economies," the big companies said, "having trouble understanding the African distribution network, which is not very structured, it bothered them." So French products are expensive for a clientele, which is not exactly easy is. In contrast, Chinese, Indians or Turks with cheaper products came very close to expectations. "Above all, they found an African distribution that is still strict enough in their countries," explains Étienne Vauchez. There is generally a shortage of French exports that does not leave the reality of the market … "

In the car, the French did not know how to adapt to demand

The automotive sector is not excluded. Competition from China and India (now Africa's fourth largest supplier in this sector) led France to move from third place in 2001 to seventh place in 2017 (with a market share of 5% versus 15%). % in 2001). But long before the massive arrival of Chinese manufacturers, French brands like Peugeot were already battling Japanese like Toyota or South Koreans like Hyundai. "In the automotive sector, French brands did not adapt to demand, and they return to low-cost vehicles for the African middle class, such as the Renault Duster brand whose cars are manufactured in Morocco and sold throughout sub-Saharan Africa "

French companies score points in services

However, analysts believe that the statistics on French foreign trade with Africa must be nuanced. ASCI expects French companies to score points in services, such as Orange's services on the continent in Telecom, Canal Plus is doing well, the Bolloré group in the ports is doing well, as well as construction companies These are data that are not included in the customs statistics. "

French companies seize South Africa better

Good to know, if the blue-white-red companies on the continent are left behind behind China globally, they will not know the crisis in South Africa. Almost 370 Tricolor companies are installed there and almost all emancipate themselves in the CAC 40. South Africa is now France's first economic partner in sub-Saharan Africa with a volume of 2.9 billion euros in 2017. "The South African market is for the economy The country is rich, it's a market that the French can understand, unlike economies like the DR Congo, Angola or Nigeria, whose heart is informal. "However, French analysts have a good back, they do not say whether German companies will better understand this African reality, "said an expert from the African Center for Business Intelligence and Intelligence (CAVIE).

Started in cooperation with IMF, World Bank and AfDB

An analyst at Knowdys Consulting Group's Public Affairs bureau points out that the "Compact With Africa" ​​program is officially aimed at supporting private investment to create jobs in Africa, thereby reducing Africa's emigration to Africa. European Continent "It is a program he has cleverly launched in collaboration with the International Monetary Fund (IMF), the World Bank and the African Development Bank (AfDB)." "


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