The Ambition Africa Summit will open on Tuesday 19 November 2024 in Paris. This important annual event in Franco-African economic and trade relations has one ambition: to support French businesses on the African continent.
Investing in Africa is a real challenge for French companies. Today there are 5,000 on the continent and last year they generated a turnover of 100 billion euros. There France it is the second largest investor after United Kingdom. THE UNITED STATES complete the podium, Chineseshe is fifth. However, France is seeing its economic presence on African soil shrinking. Its trading positions are crumbling. Between 2000 and 2020, France saw its market share on the continent halve. However, foreign direct investments by French companies doubled in the same period.
African demand has exploded
So how can we explain this paradox? The African market has expanded and has fully entered economic globalization. There is full global competition. This is due to the explosion of demand from Africans but also the emergence of new competitors who satisfy this demand. But there is a peculiarity: the vast majority of French companies invest in Africa and operate there. In value, between 60 and 65 billion euros are invested there every year.
Where do companies invest?
It is easy to think that most investments take place above all in what was called the pre-neighborhood of Francophone Africa. But according to Cian, the French Council of Investors in Africa, they are the top three countries in which French companies investSouth AfricatheEgypt and the Nigeria. But Paris remains attentive to its historical relations. Last example to date, in Morocco not even three weeks ago, with the signing of an exceptional strengthened partnership for a variable total amount up to 10 billion euros.
Some companies are avoiding the African market
Example of a real difficulty: French banks are withdrawing little by little. The last one still very present on the continent is Société Générale. The SG as it is called now he disengages. This decision is motivated by the low profitability of its African subsidiaries or very high risks. In concrete terms, banks are much more cautious and therefore no longer want to take these risks.
There is therefore new demand for French companies. Should they continue to invest in the continent with the same ambition while French banks, their preferred partners, withdraw? And then there is also a significant element which is simply the worsening of the economic situation. French companies suffer from increased competitiveness. Result: their leaders do not always intend to invest in Africa, preferring to concentrate on the markets they know and which seem to them to be the most priorities. This is also the reason why public authorities organize meetings between French and African masters to strengthen these economic ties!
What are the main objectives of the Ambition Africa Summit?
Interview between Time.news Editor and Economic Expert on the Ambition Africa Summit
Editor: Welcome, and thank you for joining us today to discuss the upcoming Ambition Africa Summit set to take place in Paris on November 19, 2024. It’s an exciting event that focuses on strengthening Franco-African economic relations. Can you tell us why this summit is particularly significant this year?
Expert: Thank you for having me. The Ambition Africa Summit is crucial because it arrives at a time when France’s economic footprint in Africa is being challenged. Although France remains the second-largest investor on the continent—with approximately 5,000 companies generating a staggering 100 billion euros in turnover last year—there’s a clear trend of declining market share. In fact, between 2000 and 2020, France’s market presence halved, highlighting an urgent need for dialogue and strategy.
Editor: That is indeed striking. Despite this decline in market share, you mentioned that foreign direct investments from French companies have doubled during that same period. How do we reconcile this seeming contradiction?
Expert: It’s an interesting paradox, isn’t it? While French companies are ramping up their investments—around 60 to 65 billion euros each year—the market is expanding even faster, fueled by an explosion in demand from African consumers. This increasing competition, not just from traditional partners like the UK and the US, but also from emerging players, means that French firms are encountering stiff rivals. This summit aims to help French businesses adapt and innovate in this globalized marketplace.
Editor: That leads us to a crucial question: Where are French companies choosing to invest within Africa? Is it concentrated in certain regions?
Expert: While many might assume that investments are primarily directed toward Francophone nations, the reality is more nuanced. French companies are diversifying their investments across the continent. New markets are emerging, and businesses are seeking opportunities in various sectors, from technology to renewable energy. The summit will likely address how to better navigate these opportunities and challenges tailored to different regions.
Editor: With the backdrop of increased competition and changing market dynamics, what strategies do you think French companies should consider to maintain and grow their presence in Africa?
Expert: Collaboration is key. French companies should explore partnerships with local businesses to gain insights and enhance their market presence. Adapting to local consumer preferences is another vital strategy. Companies should also invest in technology and innovation to offer competitive products and services that meet the evolving demands of African consumers. Engaging in sustainable practices will also resonate well, as there is a strong focus on social responsibility and environmental stewardship on the continent.
Editor: Those are valuable insights. As we look ahead to the summit, what are some of your expectations regarding the discussions and outcomes?
Expert: I anticipate a renewed commitment to fostering long-term partnerships between French and African businesses. There will likely be workshops focusing on overcoming barriers to trade and investment, as well as sessions dedicated to showcasing successful case studies. Ultimately, I hope the summit will catalyze actionable strategies and foster an ongoing dialogue that benefits both French companies and their African partners.
Editor: Thank you for sharing your expertise. It sounds like the Ambition Africa Summit will be a pivotal event for shaping the future of French investments on the continent. We look forward to hearing more as the date approaches.
Expert: Thank you for having me. I look forward to seeing how these discussions unfold and to the potential avenues for stronger Franco-African ties.