ABIDJAN (Reuters) - French companies must go on the offensive and fight the growing influence of rival China for a stake in Africa’s increasingly competitive markets, France’s Finance Minister Pierre Moscovici said on Saturday.
France, which once ruled over much of West Africa as colonial master, continued to exert direct and indirect influence over its ex-colonies for decades through a murky system of patronage known as “Francafrique”.
However, that regional reach is now being challenged by a new Chinese investment blitz.
“It’s evident that China is more and more present in Africa...(French) companies that have the means must go on the offensive. They must be more present on the ground. They have to fight,” Moscovici told journalists during a trip to Ivory Coast.
France’s Socialist President Francois Hollande has promised to break with his conservative predecessor Nicolas Sarkozy’s business-focused policy towards Africa and root out the last vestiges of Francafrique.
However that does not mean France will back away from competition with China for economic influence in Africa, Moscovici said.
“Africa is booming. Sub-Saharan Africa will have the second highest regional growth after Asia in 2012 with a rate of 5.5 percent,” he said.
“The new phenomenon is that African growth has the potential to stimulate growth in France. We want to be present there.”
French firms including infrastructure group Bouygues and energy company Areva are on the front lines in the race for markets in former colonial nations from Ivory Coast to Cameroon.
But working in sub-Saharan Africa carries risks that some firms are loath to take, as demonstrated by the kidnapping of seven Areva employees in Niger in 2010.
At the same time China’s trade with Africa reached $166.3 billion in 2011, according to Chinese statistics, and African exports to China - primarily resources to fuel Chinese industries - rose to $93.2 billion from $5.6 billion over the past decade.
China in July offered African countries $20 billion in loans over the next three years, double the amount pledged in the previous three-year period.
Moscovici said the creation of a new Public Investment Bank would boost the competitiveness of French companies on the world stage.
The fund of around 40 billion euros ($52.02 billion) is intended to ease lending to small and medium-sized businesses and inject capital directly into selected companies. The law creating it passed the lower chamber of France’s parliament last week and will go to the Senate later this month.
“It will be the bank for the SMEs. It will be the bank of...the regions. It will also be the bank for exports,” Moscovici said.
“And it’s on this basis that our businesses will head out with more confidence to conquer new markets and be more present in our traditional markets,” he said.
Moscovici was due to sign a debt conversion contract with the Ivorian government on Saturday that will see 630 million euros of the west African nation’s debt to France transformed into poverty reduction projects.
Initial projects will target areas, including infrastructure construction and rural development, aimed at stimulating Ivory Coast’s economic growth. ($1 = 0.7689 euros)
Editing by Keiron Henderson