Dr Cheick Modibo Diarra, former Prime Minister of Mali, sat with Banker Africa to discuss the challenges facing francophone Africa and how to attract international corporates to the continent.
What does the future hold for the African francophone market?
The francophone market is burgeoning. The 31 francophone countries in Africa have traditionally been overshadowed by their anglophone counterparts. However, this is beginning to change because the IMF has stated that the economic growth in francophone West Africa for 2017 will average about six per cent, with growth attributed primarily to good governance and a general improvement in the business environment, that is a very bold statement. Good governance and general improvement in the business environment means that laws are being put into place to make doing business easier into those countries in West Africa.
It’s likely that in terms of investment these jurisdictions will be placed higher than all the more advanced African countries like Kenya, Nigeria or South Africa—a change has also been helped by ongoing economic and political integration. I think that francophone Africa in the next few years is going to be a really big destination for investors.
How do we improve that regional cooperation in francophone Africa, what more needs to be done? What needs to be done is to apply the laws that have already been put into place. For example, under the laws in UEMOA (West African Economic and Monetary Union), it is a custom for anybody that does business with a union of eight countries, regardless of the point of entry, to not be bothered by customs authorities in the entire zone. Meaning, for example, that if I bring a product through Côte d’Ivoire then every product can go from there to Mali, to Senegal, to Niger, to Togo, to Benin. Once I clear all customs in Côte d’Ivoire, that’s it, nobody should ask me anymore questions I should be moving freely with my goods and so forth.
This takes something that is honourable, and it does work to a degree but sometimes the authority and the administrations themselves are kind of lagging behind in information. This slows down the flow of goods and makes it difficult to do business, whilst on the other the end, if for instance I built a factory in Mali, any goods that are made should have the ability to be sold into any of the other seven countries in UEMOA without having to clear any customs.
However, sometimes the people who are working at the borders between those countries themselves are lagging behind in knowledge of the law. The law is already in place, but we need to make sure now that it is implemented to a tee, if we can do that then the improvement will be felt immediately.
How can we bring about this regional rule of law and good governance?
What we will see is that the countries which are sitting at the top in terms of governance, transparency and business improvement are going to contaminate others and pull them toward the higher grounds instead of pulling downwards. This is valuable because we are starting to see standards that are coming out and being adopted automatically by all countries that are a member of this grouping.
It is like an unspoken peer review process that is not necessarily in a book but an understanding that if you want to be part of this group there are some things that are expected of you in terms of governance and the rule of law, such as passing new legislation to be able to join the community and take advantage of belonging to the community as a whole.
What risks do international corporates face when trying to expand into the African continent?
The thing is, Africa is a big continent with over 50 countries, and each of those separate countries has its own risks and associated risk factors, but the core denominator that investors looking at Africa recognise as a common risk is political. However, even now we have seen that this has begun to change: in Kenya the Supreme Court annulled an election, a first on the continent, and we have seen ECOWAS (Economic Community of West African States) in the Gambia making sure an incumbent who lost an election was removed peacefully visibly with the assistance of the economic community. The landscape is changing, many political issues can now be resolved by internal judicial means.
Do we need to change the perception of international corporates that haven’t worked in the African continent before to become aware to the different risks associated with different countries?
The problem is that when you want to actually change the perception of the international community to Africa it makes it look like it is lagging behind. You may remember a time where people used to think that Africa was the hopeless continent, now we are at a moment where Africa is ‘rising’ or Africa is ‘open for business’, etc. However, if you look at it somewhere between the two there is a middle that is very positive but is it not as deliberate as some of the big titles would lead to think.
I think the first way we can address this is in the way the media communicates the risk level of Africa. It is important for the community to look at the GDP growth, in addition to looking at many other factors. The price of commodities going down for example—falling oil and commodities prices has shown a slowdown in development and growth of Africa GDP, these kinds of things will be overcome by the resilience of Africa itself.
What can be done to improve the international appeal of doing business in Africa, as well as improve the perception of the continent?
What must be done for Africa is to really start speaking for itself for it to be heard—for Africa to start telling African stories. For so long the story of Africa continues to be told by others who have sometimes meant well but have very little understanding of the complexities of Africa’s systems and how these systems interact, and not only at the country level, but at the sub-regional level with economic organisations, and at the continent level, with the African Union and others. Until someone starts understanding all of that we will not get a good picture of what’s going on. That’s what I think that Africa needs. Right now, in the last few years, I’ve seen an increase in the number of TV channels being put to work in Africa where Africa is telling its own story and when people start coming based on that story and validating the story that is being told through those channels, I think that will help a great deal.