Knowledge and experience reduce investors' perception of risk
The perception of risk that Spanish companies have when investing in the African continent and the language barrier are some of the obstacles that must be overcome in order to increase the flow of trade between our country and future African partners.
This is one of the main conclusions that have been highlighted in the online conference Africa Spain Business Live, presented and moderated by the director of Atalayar, Javier Fernández Arribas.
This event, entitled "Paving the way for a new investment dynamic", serves as a preparation for the next edition of the Africa Spain Business Summit, to be held in Barcelona from 9 to 11 June.
The conference was attended by Rita Da Costa, Senior Advisor and Head of Unit at the OECD; Daouda Coulibaly, President of CCR-UEMOA; Ana de Vicente Lancho, Director General for the Mediterranean countries and the MENA region of the Spanish State Secretariat for Trade; Siélé Silué, Special Advisor to the Prime Minister of Côte d'Ivoire; and Anne-Sophie Firion, Associate Professor at the Carlos III University of Madrid.
Change of model
During her first speech, Rita Da Costa highlighted the change that has taken place in recent years in the dynamics of trade relations between Europe and African countries: "we have moved from a dynamic of donors to one of cooperation. Africa is a continent of opportunities, with high population growth, an abundance of critical minerals such as cobalt and many promising business sectors".
Daouda Coulibaly agreed that "Africa is growing, especially in terms of population. We need a win-win approach, with advantages for both sides. Africa can be a great trading partner for Spain".
Ana de Vicente, from the Secretary of State for Trade, stated that "Africa is a priority for the Spanish government, we are neighbours and it is the gateway to the European Union. It is time to change the narrative and investment is the key to participate in the growth of the African continent. We have to share our know-how in the way we do business and it will have a long-term impact on Africa".
Legal certainty
Anne-Sophie Firion, from the Carlos III University, explained that "when we refer to Africa, we are really talking about 54 Africas. And if we want to foster our relations with them, companies need legal certainty. In this sense, there are 17 African countries that have formed an organisation to unify their business legislation, and they encompass a third of African territory and a quarter of its population. It is important for Spanish businessmen to know how it works, as the risk perception of investors is inversely proportional to their knowledge of the legal side".
In this line, Da Costa shared the need to combat the risk perception of Spanish businessmen: "if we want these investments to bring development, we need to have all the information in hand, so that they are also the best investments".
Siélé Silué, from the Ivory Coast, considered that "Spain has the opportunity to invest in Africa, as it is a mutually beneficial relationship. For example, in the tourism sector, which is very important for the Spanish economy and also for that of the Ivory Coast. We have to have a long-term vision of investment in Africa and Spain can contribute its know-how to make this a long-term relationship, in which both parties win".
Risk perception
With regard to the perception of risk, Ana de Vicente said that "the perception of risk is linked to the lack of knowledge and experience. Once a Spanish firm establishes itself in Africa, its perception of risk is significantly reduced. We need much more information on the profitability of businesses and, for example, we need to take advantage of the presence of Spanish companies in Morocco so that they make the leap to sub-Saharan countries".
Anne-Sophie Firion agreed that "we need more information and to publicise an organisation such as OHADA, which harmonises commercial law in almost two dozen African countries and is open to all the others. This organisation establishes two courts, a high court of commerce and an arbitration court, which guarantee companies the resolution of possible conflicts".
In Siélé Silué's opinion, "when it comes to combating the perception of risk in investments, we must emphasise knowledge, which is the key for Spanish companies to have confidence in these new markets and for both parties to benefit".
Sectors highlighted
The speakers emphasised the most important sectors for Spanish investment on the African continent. Rita Da Costa pointed to renewable energies, critical raw materials and the food economy, a sector that will generate 20 million jobs in the period 2019-2030: "we must also work on skills, because one out of every six African workers is untrained".
Ana de Vicente pointed out that "we are open to all sectors, although we are particularly interested in new areas such as green hydrogen; the water cycle, with desalination plants, a sector in which Spain has extensive experience; the agri-food sector, which has undergone a transformation in our country since the 1980s".
From the Ivory Coast, Siélé Silué highlighted sectors such as the transformation of agricultural products such as cotton; the tourism sector, which is key to the GDP of the Ivory Coast; and the agri-food sector, both in terms of production and transformation.
The language barrier
Another aspect that sparked debate among the speakers was the existence of language barriers that hinder relations between investors and African countries. In this regard, Siélé Silué emphasised that "young Africans are increasingly concerned with learning languages in order to be able to relate to companies that come to invest".
Anne-Sophie Firion explained that "OHADA has four official languages: French, English, Spanish and Portuguese. We have to protect communication between people, because knowledge is also a language issue, and in Africa there are well-educated and well-trained young people".
With regard to the issue of language, Ana de Vicente provided a very relevant fact: Ivory Coast has 500,000 students of Spanish, which is the second most widely spoken language in the country, after French: "language should not be a barrier to investment", she concluded.
