The French government has urged business leaders and investors at a key summit last week to be bold about investing in Africa. Paris is banking on the potential of small to medium enterprises (SME) to catch up in the race with China. But investors are reluctant to follow suit.
When France launched its flagship Ambiton Africa business event last year celebrating opportunities on the African continent, Finance Minister Bruno Le Maire was absent. This year, Le Maire lost no time in attending the 2019 edition of the forum, which wrapped up last week, to hammer home an urgent message.
"We need to raise private sector capital, because the public sector alone cannot deliver Africa's transformation," he told business leaders and investors gathered at the French finance ministry.
An estimated €300 billion is required to fund small business projects across Africa, which are drawing investment interest from every corner of the globe.
Le Maire wants Paris to play an active role in raising the necessary funds as France looks to position itself as a trade and investment hub for the continent.
Race against time
A private equity fund run by the French Development Bank has already pledged €2.5 billion for entrepreneurs and small businesses, and Le Maire is encouraging private investors to also chip in.
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"We must move quickly. We're in a race against time to tackle poverty, unemployment and hopelessness among young Africans whose entrepreneurial talent is not being harnessed due to a lack of funding," Le Maire insisted.
The French strategy in Africa is thus focused on coining solutions that meet the continent's needs, in areas such as urbanization, demographic growth and climate change.
The national agency Business France, organisers of Ambition Africa, is offering French companies an envelope of €5 million to come up with smart city projects for Africa, a key theme ahead of next year's summit, due to take place in Bordeaux.
Dwindling trade and jitters
"To remain a major partner of African countries, we must bring together French solutions and African people," Christophe Lecourtier, head of Business France told RFI.
Trade between the two partners stands at €48 billion according to the French Council for investors in Africa. It is dwarfed by China's trade relationship with the continent, which was worth €150 billion last year.
"I have witnessed that in some African countries there's already tensions between companies coming from Far East countries and local people," continues Lecourtier. "This is something that we want to avoid. These tensions are often based on the fact that local African people are not part of the structure," he said.
France invited more than 500 African business leaders last week to network with their French counterparts. But its push for influence in Africa is being sapped by the jitters of its own investors, reckon some industry experts.
"French businesses come with so many pre-requisites, so many more compliances," than the Chinese, comments Mossadeck Bally, CEO of Azalai Hotels, which spans ten African countries.
The Chinese are not going to ask "do you have a good judiciary system, do you have a good banking system? Is your investment safe? Yeah, maybe they have these types of questions, but these questions do not refrain them from coming and investing," he told RFI.
Other obstacles to French investment are false stereotypes.
"I think sometimes not just in France but in many countries, Africa still has this very romantic notion of poverty reduction," says Robert Ahomka-Lindsay, Ghana's deputy Trade Minister.
"I don't know anybody who likes being less poor, I don't even want to look at the word poverty reduction. We want to get rid of it," he told RFI, urging France to consider Africa as a real business partner.
Tapping Anglophone market
Increased competition for business on the continent has seen countries like France venture into new markets, such as Anglophone Africa.
In 2017, President Emmanuel Macron became the first French president to visit English-speaking Ghana in 60 years. This year he organised state visits to Ethiopia and Kenya.
For Nairobi, there are opportunities to be had, on condition that the French adopt the right mindset.
"We're finding a lot of interest coming from different places. I think for France, it is about establishing a relationship that will work," comments Charles Hinga, Kenya's Housing Minister.
"I think the French people have also discovered that Kenya has a good workforce, so it's not about shipping 100 people from France to Kenya, it is a bit about helping Kenyan companies to scale up," he told RFI.