Africa-Europe: State of Play and Prospects
Thank you, Minister de Charette, for having invited me to introduce this exchange on a subject that, for a long time, was reserved for a few specialists but whose relevance is gradually proving to concern us all, whether Europe or Africa, whether for good or less good reasons.
It is a doubly topical topic.
First of all because we are starting a new five-year political cycle with the recent European Parliament elections and thus, with a new European governance. An initial, significant change to note: the titles of the Commissioners’ portfolios. Since the creation of the European Commission in the 1950s, there has been a European Commissioner for Development in charge of relations with Africa. Mrs von der Leyen decided that there would no longer be a Commissioner for Development, but rather a Commissioner for International Partnerships as a way of advertising a paradigm shift in the Euro-African relationship.
Second, because another chapter is coming to an end, this one by twenty years. The institutional framework that organises our relationship, the Cotonou Agreement, expires at the end of 2020 and will have to be replaced by a new framework under negotiation. This new framework will distinguish more clearly – and rightly so from my point of view – three pillars: Africa, the Caribbean and the Pacific.
I will first look at the challenges that the new Euro-African partnership must address; then at the responses to address these challenges; and finally at the difficulties that we will have to overcome.
The challenges to address
I see three: trust, growth and governance.
I begin with trust because, at the end of the day, it is perhaps the most complicated of the three. Relations between Europeans and Africans are unmistakably influenced by the colonial past, its realities, its memory, and its diverse interpretations. Relations are also affected by the Cold War period, when both sides were fighting over our continents. But even more influential has been the recent past; the great geopolitical upheavals of recent decades, and the shift of the world towards Asia, which once again makes Africa a geopolitical issue. Our respective visions of these episodes are all marked by the unspoken, taboo, and political correctness so that we only speak frankly to each other in private, and certainly not during the rites we have invented to celebrate our relations – these summits with their weighty decorum and flowery statements. This disposition must change if we are to move forward together. To disprove for ourselves what we hear is happening on the other side of the Atlantic; « poor Mexico, so far from God and so close to the United States ». Building trust and getting out of this thick gangue in which we find ourselves trapped will take time. But we need to want it.
The second challenge, that of growth is a more obvious, significant and perhaps a more essential one. Taking into account the evolution of the African population, if Africa is to have a GNP per capita in 2050 equal to half the world average, which is a reasonable objective, the GNP per capita on the continent must increase by 4.5% per year over this period. This would mean an average annual growth rate of 6% – 7%, 50% higher than what has been observed in recent years. This is the framework we need to keep in mind to understand what is being talked about. This challenge is unquestionably great; it is probably remains feasible.
The ship race between economic growth and demographics that characterizes the African continent differs greatly from one region to another, and from one country to another. As we know well, there is not « one Africa”, but many. The major challenges, however, remain common to the continent, starting with the infrastructure deficit that constrains growth and which itself originates in insufficient investment, whether in hard infrastructure or human capital. In order to understand the magnitude of the problem, one must simply compare it with decades of Asia’s growth performance.
Underpinning this challenge is a glaring lack of financing capacity of the supply side, which is in logical contrast to Africa’s tremendous potential for consumption, and therefore, growth in demand. This is alongside issues that are pending at the macroeconomic level, dividing experts and politicians alike on subjects such as industrialization. Some say that industrialization is a necessary step that must be taken in Africa, as demonstrated in the past elsewhere; others say this is old fashioned thinking for the digital age. Some say that industrialization is the source of productivity gains; others say that it is a way of wasting capital resources that are too scarce. There is one certainty, in my opinion: it is up to Africans themselves to decide how to attune their growth path.
As if to add to Africa’s difficulties, growth will have to be much cleaner than that of historical Europe’s. Firstly, because of the environmental threat unchecked growth poses to our planet, which must henceforth now guide our conceptions of economic development. Secondly, because the African continent is particularly exposed to the effects of climate change due to its geography and geology.
Environmental sustainability, but also social sustainability. In Africa, as in other emerging regions as well as 19th century Europe, economic development is accompanied by a rapid rise in inequalities that generate political tensions which, combined with other more traditional factors of division, could lead to outbursts, some examples of which we can already see happening.
The third challenge is governance. I have been working with people who try to address this matter for a long time, whether with Transparency International, or within the framework of the Mo Ibrahim Foundation whose main purpose is to improve governance in all areas of public life. In particular, this is done by publishing a composite index that makes it possible to locate the trajectory of each African country. In short, let us say that several positive developments (in the field of health, for example) coexist with more erratic and worrying developments in the business sector, or even public freedoms. Nevertheless, although seemingly paradoxical and thought-provoking, this does not prevent a sometimes-breathtaking entrepreneurial efflorescence.
I should also include security issues as a fourth major challenge. I am not doing so in the name of a conviction, which I acknowledge is questionable. That these issues (including the religious component) find a large part of their origin in socio-economic tragedies due to poverty, and more recently, in competition for natural resources that are becoming scarcer in rural areas. Security issues are a reality, though. The Minister for Foreign Affairs of Mali, who honours us with his presence, will probably speak on this much better than myself.
The responses to be brought forward
In my opinion, the main responses to be provided are in the fields of investment, security and mobility.
Investment shortcomings are largely due to risk, in the broad sense of the term. Ultimately, if you are an average investor in this capitalist world in which we find ourselves, you invest in a company or project and ask for a 10% return on your investment (ROI). In Africa, the stipulated ROI is 15%. A risk premium of 5%.If you select your investments by setting the bar at 15% instead of 10%, there is a huge amount that would been done elsewhere and that is not being done in Africa. This concern is even more blatant when considering infrastructure, which by nature are very much long term, therefore posing an even bigger investment risk.
Therefore, the first response: reduce the risk premium to mobilize more private and/or public financing, including from local resources as recommended by Lionel Zinsou or Jean Michel Severino. On top of finance from abroad, which in any case will remain essential. This is the turn that the Juncker Commission has taken with the European Investment Plan, which has begun to mix guarantees with loans. This is what we are aiming for in Brussels for the new generation of financial instruments in support of the next Euro-African partnership. A large amount of grant resources will be provided since the next five-year European financial perspective provides for an increase, but will be deployed differently by increasing their leverage effect on other financial resources that are less costly for the taxpayer.
The second response regarding investment is economic and trade integration in Africa, which for the most part, lies in the hands of our African friends. Whatever the benefits or damages of colonization, having divided this continent by multiplying borders has left a legacy that is all the more destructive because it has been reinforced by independences with a narrative that is at least as national as pan-African. With a few exceptions, the size of African markets is not in line with today’s or tomorrow’s standards, which seriously affects their attractiveness, and therefore investment. The cure is known. It is decided. It is the gradual opening and integration of markets and economies, more or less practiced in different African regions, with successes in the East and slower progress elsewhere. It will be necessary to ensure that the decision to create AfCFTA, which is welcome but will require considerable long-term efforts, does not prejudice integration within the sub-continental economic communities, which must remain the priority and whose institutional and expert apparatus remain very inadequate. This is an area in which the European Union can provide valuable support and know-how in view of its own experience of economic and trade integration. As for the trade regime with Europe, which has long been controversial and which remains important since it represents 35% of African trade, it seems to me that it has taken the rather steady course of a market opening that will remain asymmetrical for a long time.
In terms of security, the responses are as complex as the causes. The current crises in the Sahel, Central African Republic, Somalia and Cameroon, to take a few examples, are currently being dealt with in partnership with the European Union or its Member States, starting with France and often involving military operations with severe casualties. These partnerships must evolve towards a greater African political and operational authority, the modalities of which are still uncertain but will have to be negotiated in the post-Cotonou framework, given our linked interests.
Lastly, the challenge of mobility. I am not the type to have nightmares about Stephen Smith’s « Rush to Europe »; nevertheless, I do not think that advancing economic development in Africa will make this issue disappear. I do not believe in the trendy idea floated at summits according to which some kind of Marshall Plan for Africa will stabilise a middle class tempted by a better life elsewhere and which will have reached the standard of living allowing for a desired migration to Europe, or to other destinations. On the other hand, I do believe that there are still joint opportunities to organise legal mobility, and to do a better job of cooperatively controlling refugee movements. Last year, the Jacques Delors Institute dedicated an important and innovative study on this subject.
The difficulties to be overcome
The difficulties to be overcome are many, on both European and African fronts. We must look them in the face together so that we do not delude ourselves about the importance of the efforts to be made.
On the European front: because Europe is 27 or 28 countries and, for understandable reasons linked to history and geography, whose thoughts on the African continent are extremely heterogeneous. If you go around the COREPER table discussing the agenda of a renewed African partnership for the future, do not expect a rapid conclusion! Say you do succeed and move on to the phase of who should do what, and how to divide the work; you’d do well to plan for an long night session! This is also because our institutional set-up remains overly complicated and complex for many of our interlocutors. Just in Brussels, for security: dial 1, the number of the High Representative, for the Maghreb; dial 3, the Commissioner in charge of the neighbourhood; for the rest, dial 2, which I have already mentioned manages a huge budget. Regarding the famous summits, please do not forget to carefully divide the interventions between the Presidency of the Commission and the Presidency of the European Council. As for the procedures concerning the management of projects and actions, it is indisputable that we have an appalling bureaucratic burden to carry, reflecting not only the paranoia of the Member States who pile up regulatory precautions, but also the qualms of the European Parliament’s Budgetary Control Committee and the Court of Auditors.
On the African front, the institutional apparatus is also complicated and unfortunately much weaker in its authority and expertise. Contrary to what it seems, the African Union is nothing like the European Union due to its limited competencies. The same goes for the African Union Commission, whose mandate, authority and expertise vary greatly from one area to another. This means that key interlocutors are most often African heads of state whose modalities of interaction are less than transparent. There also remains much to be done to deal with dissimilar approaches between countries or regions, an example being between North Africa and sub-Saharan Africa, or even among Maghreb countries on possible axes of regional integration, such as Morocco’s ambition to join ECOWAS. It can also include alignment between heavyweights such as Nigeria and South Africa among others, or between heads of state heavily invested in continental affairs such as in Rwanda, and others more passive.
I will briefly mention several other difficulties of a different nature in the more or less short-term:
- the reoccurrence of over-indebtedness, partly due to Chinese activism, and coupled with capital flight out of the continent, which unfortunately do not seem to be decreasing;
- an insufficient tax base (of about 15% – 20% of GNP) which will have to double in order to finance essential public goods while progressively normalising the informal economy, while recognizing the many benefits it brings.
- the taboo of specialization involved in economic and trade integration. We are far from fully recognizing how profoundly it will reshape the distribution of comparative advantages along with the social and political problems that will follow. On a related matter, let us mention the necessary reassessment of what intra-African integration implies in terms of harmonising norms and standards, which in turn must be connected to European norms (among others’) whose severity will continue to increase.
I will conclude these remarks by taking a step back to the geopolitical dimension to tell you what is on my mind, even if it comes as a shock: when it comes to the future of European-African relations, we Europeans have no choice, unlike our African friends.
Demography and geography are forcing Europe to make profound changes in its relationship with the African continent. We can neither change the geography that makes us neighbours, nor change the demographics that decree our population shrink. This is the meaning of the Euro-African « vertical » that crosses through the Mediterranean, as proposed by our friend Jean-Louis Guigou.
Africa, on the other hand, is now an attractive geopolitical target for many other powers due to its growth potential. It therefore has more choice for its global alignments. Other offers, different from ours on many levels, are available to Africa.
Africa’s choice will be a choice of values, of fundamental principles of political, economic and social organization underlying our human communities. It is up to us to weigh in that we want what is best for the continent while, of course, respecting the African perspective of the world, which is gradually reappearing, particularly in intellectual circles. To do so, let us be bold enough to open the development of our future partnership to more than just diplomats, whatever their merits. Let us organise this partnership on the basis of initiatives that provide solutions; from civil society, to the business world, major academies, or the world of the arts; let us proceed as we have done since last year at the Paris Peace Forum by practising what I call « poly-governance ».
And finally, since we are in Paris, let us not forget the responsibilities that will probably weigh on France with Brexit in order to map out the way forward for a Euro-African partnership in line with both continents’ values and interests.
Thank you for your attention.