Banco Sabadell focuses on Africa at its new Hub Empresa conference

On this occasion, Banco Sabadell organised a webinar to present the investment possibilities in four African countries: Nigeria, Senegal, Ivory Coast and Ghana. The event was moderated by Mireia Pont (Hub Empresa) and presented by Carlos Dalmau, Director of International Solutions at Banco Sabadell. It consisted of three presentations by Roberto Barros, Director of Internationalisation of the Tarragona Chamber of Commerce; Alejandro Arola, President of Arola International; and Begoña Fernández-Costales, CEO & Export Manager of Bepic Trading Spain. 

The Tarragona Chamber of Commerce (Cambra), has extensive experience in operations in Africa dating back to 1994 and 1998 in the case of sub-Saharan Africa, specifically Ghana. Barros, who has a long track record, explained the great investment opportunities that exist on the continent.

Most of the world's uncultivated land is in Africa, so there is huge potential for agricultural, fertiliser and machinery companies across the continent. In addition, those that are cultivated are inefficiently so they need to be modernised. 

As for how COVID-19 has affected the continent, Barros explained that the lower mortality rate caused by the disease compared to other regions is possibly due to the large number of young people and small number of older people. 

One of the effects of the pandemic in Africa is that many countries have realised their extreme dependence on imports from certain countries, and have realised the need to industrialise, which also opens the door to opportunities in sectors such as the chemical industry. 

Barros also highlighted the importance of networking with other Spanish companies already established in Senegal, Nigeria, Ivory Coast and Ghana, which are becoming increasingly numerous in the region.   

Likewise, there are structural deficits common to all four countries: low and deficient agricultural development, low level of industrialisation, high dependence on imports, deficiencies in training, lack of infrastructure (roads, railways, waterways), insufficient and expensive air links, and poor communications within the countries. Barros insisted that these deficits are an impediment to development, but they are also a great opportunity for Spanish companies. 

For those that are interested, he recommended going more than once because they will probably not be able to close the deal the first time. On the other hand, he advised against wanting to meet directly with a minister or the head of a ministry if you are not a large company, and that it would be a better option to look for a local partner who knows how to participate in the administrative circuit. However, he made it clear that contracting with the public sector in Africa, unless you are a large company, can be very problematic, which is why he recommends doing business in the private sector. 

Other countries in the region such as Benin, Togo, Burkina Faso and Mali could also be of interest to Spanish companies. In fact, the Cambra was in Mali last December.

Alejandro Arola, for his part, focused on the logistics and customs situation. He advised companies to be guided by the position of countries in the World Bank's logistics efficiency index, which ranks countries on the basis of different elements thanks to information obtained from the private sector. The quality of trade and transport-related infrastructure, the ease of arranging shipments at competitive prices and traceability, the quality of logistics services, the frequency with which shipments reach the consignee within the scheduled time, and the efficiency of the customs clearance process are the variables taken into account by the World Bank. 

Another useful tool is to know whether a given country has joined the Revised Kyoto Convention developed by the World Customs Organisation (WCO). The convention establishes several parameters, although a country that has ratified the convention does not necessarily have to comply with all of them. These parameters would be: transparency and predictability of customs actions, standardisation and simplification of the declaration of goods and supporting documents, simplified procedures for authorised persons, use of information technology, minimum customs control necessary to ensure compliance, use of risk management and audit-based controls, coordinated interventions with other border agencies and partnership with trade.

Begoña Fernández-Costales wanted to focus on international tenders. Like Barros, she recommended a physical presence in the country of destination for cultural reasons, as a visit in person is highly valued in these countries, and because internet connection is not always optimal. 

If it is not possible to be present in person, she recommended having the support of a local company in the country of destination because sometimes the tender itself requires that a local company be the one to present the project.

Fernández highlighted the contribution of the African Development Bank (AfDB) to the economic and social development of African countries. Spain has been a member since 1984 and is the ninth country with the highest participation. The financial institution offers tenders that may be of great interest to Spanish companies. In addition, companies that achieve the status of approved AfDB supplier will be able to access fast-track tenders. 

Nigeria, with 206 million inhabitants, is the most populous country in Africa and the seventh most populous in the world. Currently its economy is extremely dependent on oil and for this reason the authorities are trying to diversify the economy, especially in the wake of the fall in oil prices. 

Industry and agriculture are the main beneficiaries of this diversification process, creating opportunities for companies in infrastructure, machinery, agriculture and city development, such as water and waste treatment.

The country has applied for admission to the WCO convention and has had the REX certificate of origin since January 2018, a system for certifying the origin of products that the European Union is progressively implementing for the purposes of its preferential trade agreements.

The two civil wars that have taken place in Côte d'Ivoire and the resulting instability and economic problems led thousands of French people living in the country, many of them businessmen, to move to Ghana. As a result, Ghana today has an increasingly strong economy, especially in the agricultural and mining sectors. 

It is also one of the most established democracies in Africa and is in the process of industrialisation, with tenders in the technology sector being frequent. Although there are not many tenders at present, the portal that lists them is usually updated. 

It is part of the WCO Convention and is also REX certified.

Until the end of the 1990s, the country was fairly industrialised, but as the speakers pointed out, the instability suffered in the first decade of the 21st century brought industrial development to a halt. Fortunately, since 2012 they have had a stable government that has once again generated confidence among investors. 

Although the capital is Yamoussoukro, economic activity is concentrated in Abidjan. There may also be business opportunities in the north of the country. On the downside, they have a tender portal that is not very up to date, the most current ones are from 2015. However, they have signed the WCO agreement and have the EU REX certificate. 

Food processing, mining, cement, artificial fertilisers, the chemical industry, the refining of imported petroleum products and tourism are the country's main economic sectors. 

More and more Senegalese companies are daring to take risks in order to develop and in turn open up opportunities for foreign companies. The government, for its part, has launched the Emerging Senegal Plan to accelerate structural reforms for continued growth. 

The country has signed the WCO Convention and has also been REX certified since January 2019. 

Trade relations between Spain and Africa have grown exponentially in recent years. In 2019, 9% of Spanish exports went to the African continent.

Spain recorded a volume of almost 300 million euros of contracts awarded in the period 2013-2018 by the AfDB. In total, more than 20,000 public tenders worth 120 billion euros are tendered each year in Africa. 

For this reason, Fernández-Costales has called on companies to increase their participation in international tendering contracts, with a special focus on the multilateral market.