Our basic objective consists to encourage 15 north-african and sub-saharan countries to develop competitive export manufacturing activities, with the following potential impacts:
- Improving political, economic and military stability of these countries
- Relocating to Africa part of the production of goods and services currently performed in asian countries, resulting in a significant decrease of greenhouse gas and pollutants emissions of international maritime transport
- Allowing european enterprises to improve their value chain.
Several African countries are rapidly changing
We often tend to consider all African countries monolithically. This generalization is misleading. While many countries continue to be penalized by an unstable political and institutional environment, binding taxation, poor infrastructure and inefficient logistics services, several other African countries such as Morocco, Ivory Coast, Ethiopia and Benin have entered a rapid period of change towards an economy being fully integrated in the world trade. These countries have indeed understood that they cannot rely exclusively on their own raw materials to ensure their successful long-term development. The emergence of competitive exporting activities in these countries would allow to fight the unemployment, to foster the economic and political stability and would contribute to prevent military conflicts.
Increasing attractiveness for foreign investors
These countries have many assets to attract European companies wishing to improve their value chain:
- Their unit labor costs are very competitive with “low cost” Asian countries
- Language and cultural barriers are low, which promotes responsiveness in terms of organization and decision-making process, and therefore short delivery times
- Maritime distances between these African countries and European markets are lower than between Asia and Europe. This reduction in distances carries potential cost savings and reduction of greenhouse gas and pollutants emissions
- Several “Special Economic Zones” are successful
- Western entrepreneurs who invest in China are suffering the illusion of moving to a capitalist country which would operate as “normal” rules of the West. But accounting is completely opaque, one can hardly rely either on local officials , nor on the ever changing workers, nor on a market which would be controlled by the rules of supply and demand.
Develop alternative industrial strategies
The common way of thinking of European entrepreneurs can be summarized as follows: “I wait it actually moves in Africa before starting to address the issue.” Thus, Europe may miss the train of change.
Just like what is done already with Morocco and Tunisia, European companies should bet on countries as Morocco, Tunisia, Benin, Ethiopia or South Africa.
Objectives of the Observatory
The Observatory provides key information by:
- Comparing and benchmarking the key factors of attractiveness of 15 countries in Africa, on the basis of objective criteria and structured and updated information
- Proposing the use of economic and environmental simulation tools
- Promoting the exchange of experiences.
In this sense, it is a real decision support tool for European and African entrepreneurs who think about these issues. It brings economic and institutional actors a strategic vision of medium / long-term and insights needed to judge the opportunity to develop industrial partnerships in Africa.