Interview with Babacar Ngom, President of the Investors Club of Senegal (CIS) and Jean-Marie Ackah, President of the General Confederation of Enterprises of Côte d’Ivoire (CGECI)
What are the immediate measures that African states, in particular those of WAEMU, will have to take to encourage the emergence of national and regional champions?
Jean Marie Ackah: Companies that have the potential to be national and regional champions need to be specifically supported by the states as they play a fundamental role in economic transformation and the creation of prosperity for their countries. country. As has been done by the emerging economies (Malaysia, Morocco, …), it is a question of supporting the development of these companies through, in particular, an ambitious local content policy, the implementation of an appropriate tax system, support for access to the national and regional market (regional preference), particularly in the case of public procurement, capacity building, access to technology and support for obtaining financing necessary for their growth through the establishment of guarantee funds, dedicated credit lines, sovereign wealth funds.
Babacar Ngom: On that, we must have fewer complexes because we see even how the first world power gives priority to its companies today. Reconciliations and mergers should also be encouraged to favor the birth of large national groups. But in the end, the key is above all the political will; that of having a strong national private sector capable of supporting the ambition of emergence.
What are the main obstacles facing your companies in the regional expansion phase?
Jean Marie Ackah: First, the business environment that does not facilitate business development. Indeed, to create a company, to acquire an industrial ground, to obtain a license or a title of property, may be part of the obstacle course. Second, despite regional free trade agreements, some countries in the region do not apply the rules that the region has adopted or introduce non-tariff barriers that make it difficult or even prevent trade. The last obstacle that could be mentioned concerns procedures or documents that are not sufficiently harmonized.
Babacar Ngom: First of all, let’s remember that we are primarily responsible for the expansion of our businesses, the quality of our management and the relevance of our strategic choices. That said, moving to another country in the subregion should actually be much easier for free trade zones. The truth is that we face the same administrative obstacles as in our own countries, multiplied by cultural and logistical constraints, so much so that we sometimes wonder if doing business is not easier for a Frenchman from far than for the company of the neighboring country. On this, we have work to move minds, especially in our respective administrations.
In the past, financing was an obstacle for African businesses. Is this problem outdated?
Jean Marie Ackah: Access to finance remains a constraint to business development, especially SMEs, in Africa. For micro and small enterprises, access to finance and the cost of credit remain the major obstacle to their growth. To this must be added a financing offer that is not very diversified. Alternative financing mechanisms (leasing, factoring, private equity, etc.) are still little known and used, while the investment needs, to equip ourselves with a powerful production tool and to develop our supply capacity, are important.
Babacar Ngom: Funding may be easier for companies of a certain size like ours, but the financing of the economy, especially SMEs, remains a significant drag. In particular, we need more instruments to support entrepreneurs, and probably in part with solutions from the private sector. For this reason, for example, the Senegalese Investors Club is considering setting up an investment fund.
The ZLECA is seen as a sign of hope for some, a fear for others. What is your feeling for this future African single market?
Jean Marie Ackah: The ZLECA is a great growth opportunity for companies. Indeed, it will help to give them access to a vast continental market of about 1.2 billion consumers. In addition, intra-African trade will be facilitated by the gradual elimination of customs and tariff barriers, which will result in increased trade between African countries. The implementation of the African single market will be facilitated if the existing regional economic blocs are effectively integrated. The main challenge will therefore be to accelerate regional integration, otherwise goods will flow better to other African countries than to our West African neighbors. But the negotiations remain difficult because the countries or companies that produce the same goods will compete more and this explains some reluctance.
Babacar Ngom: With 55 member countries of the African Union (AU) and a cumulative GDP of $ 2.5 trillion, it is clear that our businesses need the vast market of the CAFTA to grow, scale up and compete. World. Intra-African trade is indeed much too low, and moving it from the current 16% to 60% in 2022 is a formidable goal. You just have to do it in a planned way so that champions emerge from all parts of Africa. In this area, West Africa in particular has a lot of catching up to do and this must be a constant concern, not only of the private sector, but also of the WAEMU and ECOWAS Authorities.
Protectionism is in full swing between major economies. Should Africa continue to open its markets or, on the contrary, should it advocate a kind of reciprocity?
Jean Marie Ackah: I think it’s not true to say that protectionism is in full swing, based on the fact that two or three countries, important as they are, opt for this policy. Choosing a policy of openness or protection must be guided by choices and not by fashion or mimicry. Open markets are good for Africa, which does not have the means to self-suffice at the moment, nor the right technology in all areas. Today, few products are manufactured from A to Z in the same country. How to integrate into global value chains without this openness? However, this must be done in an informed and strategic way to ensure that it will actually benefit our States. Free trade agreements still provide the opportunity to protect some sectors. This is to promote market opening that promotes the structural transformation of our economies, the emergence of national champions, technology transfer, skills development, inclusive growth and win-win partnerships.
Babacar Ngom: it is true that opening our markets at once would not make sense, because our big competitors are now more competitive. You have to open up intelligently. There are areas where we want to become strong actors and others where it is less so. Openness must be linked to this, and be progressive, with accelerated strengthening of regional markets to help our businesses scale up and better prepare.
Is it easy for an Ivorian company to settle in Senegal and for a Senegalese company to settle in Ivory Coast?
Jean Marie Ackah: UEMOA and ECOWAS common membership, quasi-similar business regulations, the sharing of the same currency and the same language facilitate the installation of Senegalese companies in Côte d’Ivoire and vice versa ; even if difficulties related to internal administrative procedures and habits persist. With regard to Côte d’Ivoire, President Houphouët has always advocated a policy of openness that has facilitated the establishment of many Senegalese home.
Babacar Ngom: We have to admit that it’s getting easier, but we have to go further. My feeling is that our entrepreneurs in different countries must develop joint ventures, joint ventures and joint projects to bring out regional champions. For this, we must strengthen the spaces of exchange, dialogue and sharing between businessmen of our countries, in particular UEMOA and ECOWAS, in order to strengthen synergies.