Sotiris Mousouris : Please explain for those that are not familiar, the purposes and the action of European Business Council for Africa EBCAM since you took over the function of Secretary General.
Alexandros Spachis: The European Business Council for Africa-EBCAM is a European Federation (non-profit organization) promoting economic development in Africa through private sector initiatives. Headquartered in Brussels, it is located at the heart of the EU & International institutions and the hub of diplomatic community.
We are the only organization that comprehensively represents the range of business activities undertaken in Africa by European companies. We are structured and divided into a large network of 10 national African Business Associations, where we, EBCAM, act as the umbrella organisation representing the combined national interests of our members through advocacy in (and information from) the European institutions, international organisations and African diplomatic missions in Brussels. Our members are Africa-targeted business councils from European countries and they in turn have some 4000 companies on their respective membership lists. Our members are therefore only national chambers, not specific enterprises. At our Brussels based office, as well as during our business travels, we intensively promote private sector engagement in Africa on a regular basis.
S.M : How do you assess the political and economic significance of Africa for the countries of the European Union?
A.S. : The political and economic significance of Africa is central to the interests of the EU. In the 21st century we face global challenges that can be addressed only in conjunction with an African perspective. To take just one example, the projected African population growth is huge. People living on the continent are expected to double from approx. 1 billion today to 2 billion people by 2050. By then, it is estimated that more than 50% of Africans will be younger than 18. They will need jobs, a lot of jobs and it is projected that Africa will need to create 20 million jobs annually to cater for the basic needs of the young African generation. This represents a very significant labour force, which could potentially be harnessed by the European private sector. Labour on the continent will be cheaper than anywhere else. In addition to the human capital potential for European companies there is also a growing African market within the continent due to an expanding and increasingly wealthy middle-class.
According to the McKinsey Global Institute, increased consumption by Africa’s growing middle class means consumer spending will hit $1.4 trillion by 2020. The economic significance is increasing and represents huge potential for European private sector activities in many different areas such as retail, to name just one example.
The political significance of Africa is also a major consideration. Without stable political conditions that will have to go hand in hand with the economic development, millions and millions of people could potentially leave their African homes in search of betterment in Europe. Consequently, for the European Union it is vital that support is provided for improved political stability in Africa and some broadly positive political developments are to be seen on the horizon. An increasing number of countries can now be considered as democracies, where old-fashioned, authoritarian politicians and presidents have had to depart. The previously mentioned growing middle-class has become the driver for real democracy in Africa and there is mounting evidence that the momentum is gaining traction.
S.M: How do EBCAM members view the prospects of economic relations with Sub-Saharan African countries?
A.S. : This is exactly what we discuss in our three General Assemblies each year.
An essential part of the agenda is the sharing of assessments, information and experiences among members in an informal and confidential manner.
I would say that most of our 10 members are principally interested in Sub-Saharan African countries.
S.M: In which sectors and in which countries in Sub-Saharan Africa have EBCAM Members found significant investment opportunities
A.S. : We especially see sectors like energy, infrastructure, agri-business and food and the service industry as the most important industries at the moment. Nigeria, Ghana, Kenya, Uganda, Rwanda, Ethiopia are among the countries that attract most attention at this juncture of time. On the negative side, South Africa is facing political upheavals and the decline in the global oil price has had a negative impact on the economies of Angola and Nigeria.
S.M : What impact, in your opinion, will the developments in the Chinese economy have in sub-Sahara Africa and also the fall in oil prices?
A.S. : On balance, the business activities of Chinese companies have provided significant opportunities for African countries to grow, notably with regard to infrastructure development. Investments in all relevant sectors provide employment and today China contributes substantially to the GDP growth in several African countries. Its influence varies from country to country but China is in many areas ahead compared to Western nations. Nevertheless, we must bear in mind that this is still quite a new phenomenon and we will see how it will develop in the upcoming decades.
Sustaining high economic growth is a policy priority for most countries on the continent. The oil-price decline highlights the need for oil exporters to diversify their economies, building up different kinds of industries and not only relying on the resources available. The fall in the oil price should be seen as an opportunity to do this and it should not be forgotten that many African countries are in fact net importers of oil so their economies stand to benefit quite considerably from the current low prices. Industry experts believe that there is an optimum price for oil that stimulates a rebalancing of the economies of the oil-exporting nations whilst at the same benefiting those whose economies currently gain from the lower global prices. In the long run, this is the main way to maintain sustainable growth, in particular in the two largest African oil exporters, Nigeria and Angola. To achieve such a transition will require policies to remove impediments to private sector activity and to improve the general business environment.
For many policymakers on the continent, the fall in oil prices reduces the need for fuel subsidies, which have largely been ineffective in benefiting the poor and the more vulnerable groups in society. Although Angola and Nigeria are large net crude oil exporters, they import most of their fuel requirements due to limited domestic refining capacity. In Angola, the government ended fuel subsidies as part of efforts to alleviate pressure on the budget. In Nigeria, the on-going fuel shortage crisis has highlighted the need to overhaul the energy sector, including the inefficient fuel subsidy system. There is therefore the need to strengthen resilience to external shocks through counter-cyclical fiscal policies to build buffers.
S.M.: What advice can you give to Greek businessmen and traders related to Africa?
A.S. : We think that there are some notable business opportunities for Greek companies to do business in a wide range of African countries, particularly in those where have been political and economic improvements. Compared to European and North American markets, many African markets are young and promise dynamic development with above-average growth rates. They are not saturated and there is space for new international players. In all relevant sectors we see scope for investment, especially in the services sector, as well as in the infrastructure and energy industry. Oligopolies are rare and that itself implies very important opportunities. However, doing business in Africa is closely connected to understanding the cultural and historical context of the various nations. Their business cultures are often very different from ours, relying more on interpersonal relations. It is therefore crucial to know and understand the conditions and cultural variables when investing in Africa, which is where the expertise and experience of EBCAM members can be very beneficial. We recommend not only dealing with the hard-economic facts of African economies but also to focus on African traditions and local business relationships. The willingness to be patient and accept local conditions is very important to succeed. Another piece of advice is to start in a relatively small way and not investing large amounts from the beginning. Such an approach enables potential investors to observe the processes and adjust working methods accordingly. Investments in Africa are often more risky but returns tend to be higher, if you operate in hands-on way.
S.M: What would be the benefits of EBCAM membership for the Hellenic African Chamber of Commerce?
A.S.: The benefits are already broadly spelled out in the questions above so
I will only summarise below:
Sharing of assessments, information and experiences among members
S.M.: Could you tell us in greater detail about the principles and activities of EBCAM?
A.S.: I will highlight below some important aspects of the work of EBCAM:
What we do
- Daily succinct newsletter
- Facts about African macroeconomic trends,
- Identification and analysis of dynamic sectors,
- Updates on developments in European regulatory environment (including financing opportunities), UN system, OECD, ACP
- Updates from African Embassies in Brussels
- Relevant trends as seen in conferences, seminars and business events in Brussels
How we manage our business & Organizational matters:
Annual rotating presidency, chaired by the President of the national Association in charge
We are not in the business of competing with our members but in working through them, encouraging them to do business together
Who are our partners and regular contacts in institutions?
- The Economic Commission for Africa (ECA)
Offering quality information and service to our Association members
AFRIKA-VEREIN DER DEUTSCHEN WIRTSCHAFT,AFRICAN/ASIAN HUNGARIAN ECONOMIC ASSOCIATION FOR DEVELOPMENT, BUSINESS COUNCIL FOR AFRICA WEST & SOUTHERN,, CONSEIL FRANCAIS DES INVESTISSEURS EN AFRIQUE, DANSK INDUSTRI, NORWEGIAN-AFRICAN BUSINESS ASSOCIATION, NETHERLANDS AFRICAN BUSINESS COUNCIL, SWEDISH - EAST AFRICAN CHAMBER OF COMMERCE, ECONOMIC CHAMBER
S.M : Thank you Alexandre, we are so pleased to see a Greek diplomat in charge of EBCAM. I hope that our Chamber will join again EBCAM and be an active member as it was for more than ten years before.