Moroccan banking giant Attijariwafa Bank co-hosted the sixth edition of the International Africa Development Forum (FIAD) under the theme ‘When East meets West’. This was not about China or Asia meeting the West but rather, about the continent doing business with itself. Guillaume Weill-Raynal was in Casablanca to find out more.
Attijariwafa Bank has a footprint in 14 African countries. Alongside a number of business champions from Morocco, it launched an aggressive expansion plan into West and Central Africa a little under a decade ago and, more recently, into East Africa.
Still, intra-African trade accounts for only 15% of trade on the continent, compared to 70% in Europe, and the reasons are well-documented – poor infrastructure; closed borders; weak manufacturing base; amongst others.
With the International Africa Development Forum, the bank has created a platform to broker deals and accelerate business amongst African entities.
This year’s guest of honour was the President of Sierra Leone, Julius Maada Bio but a number of countries, including Senegal, Cameroon, Gabon, Egypt and Kenya were represented at senior ministerial level or equivalent. The objective: get African companies to partner, co-invest and expand beyond their borders.
The event brought together 2,000 participants from 34 countries and the organisers said over 7,000 B2B meetings were organised during the two days of the Forum.
Co-host was investment fund Al Mada, one of the major shareholders of Attijariwafa Bank, and a driver of Morocco’s African investment strategy.
In his remarks, Mohamed El Kettani, President of Attijariwafa Bank, said that this year’s Forum was held against a challenging global economic backdrop that required African countries to make the necessary structural reforms and accelerate economic integration.
Moulay Hafid Elalamy, Morocco’s Minister of Trade and Industry, echoed this call, calling for greater action and greater coordination amongst African states: “It is up to us to take the initiative and make things happen. We cannot expect others to do it for us.
“The private sector have understood the benefits of globalisation before we have in government, and these economic operators, be it in cement, in telecoms, in pharmaceuticals, they don’t have borders and boundaries. Globalisation can be a great opportunity for us if we manage to organise ourselves.”
Morocco takes a lead
Given the attendance and conduct of the Forum, one can clearly see that Morocco is serious about the continent and about becoming a platform to drive investment and intra-African trade.
With its major banks implanted in a number of countries, they are directly invested in the economic fabric of those countries. But it also means they have a vested interest to ensure these countries perform strongly in terms of economic growth and develop a strong economic base and diversified economies.
In many respects, Morocco is showing the way and has a head start when it comes to industrial transformation. It has managed to develop a strong industrial base and today produces 700,000 vehicles a year, with a strongly integrated value chain. Fifty per cent of goods for the auto industry are supplied locally. The sector accounts for $7bn of export revenue through the export of vehicles.
According to Elalamy, who is also the founder of one of the country’s most successful enterprises, industrialisation did not happen organically, but was rather the result of an integrated industrial strategy that took many years in terms of planning and execution.
It is thanks to this strategy that the country has been able to move up the value chain and into more sophisticated industries, such as manufacturing aircraft engines for Airbus, Safran and Boeing.
But while it has taken 50 years for Morocco to get to this point, there is no reason, according to Elalamy, why other countries on the continent should not achieve the same end in a decade, especially with the restructuring of the Chinese economy that is taking place today.
According to Kelvin Tan, Executive Committee Member of the Africa South East Asia Chamber of Commerce, this will also require the right infrastructure such as ports – “92% of trade is moved by ships” – even if he did agree that reducing the time and cost it takes to move goods within Africa is also a key priority.
Growth without development?
African countries, except for a few outliers, are still beating global averages when it comes to economic performance and GDP growth.
However, for Lionel Zinsou, former prime minister of Benin and founder of SouthBridge, a financial and strategic consulting firm dedicated to the African continent, African growth is somewhat of a mystery: “We have strong growth, we see the emergence of a middle class, but at the same time we seem to be caught in a poverty trap, from which we cannot escape. And it’s because our growth cannot seem to create jobs.”
He added, somewhat regretfully: “Europe is succeeding in creating jobs with growth rates of 1.5%, but not Africa, despite rates of 5% or 7% that would make many developed countries pale with envy.”
“You cannot expect governments whose budgets amount to 15% to 20% of GDP – against more than 40% in developed countries – to do everything. The private sector must take the lead.” NA