FRANCK RIESTER, Minister for Foreign Trade and Attractiveness, France
FRANCK RIESTER, Minister for Foreign Trade and Attractiveness, France, was recently in Nigeria and in this interview with CALEB OJEWALE of BusinessDay.ng, he talks about areas of opportunities for increased trade between the two countries. He also reiterated the French commitment to helping Nigeria achieve some of its economic objectives, particularly in backward integration. Excerpts:
Nigeria has been described as France’s leading trading partner in sub-Saharan Africa, and the fourth in Africa, behind Morocco, Algeria and Tunisia, can you give an insight into what is driving the relationship between both countries?
It is true! Nigeria is a strategic economic partner for France in Africa, and France is deeply committed to further developing our growing trade and investment relationship. French President Emmanuel Macron, who is keenly familiar with Nigeria and its potential, has made it a priority of our economic diplomacy.
Energy has traditionally been the driving force of our economic relationship, but our bilateral trade is not limited to the oil sector. In 2020, although oil price collapsed, our market share in Nigeria remained stable, around 2%, yet under its potential.
Rather than trade, the dynamism of French direct investments to Nigeria better illustrates how deep our economic ties are. Nigeria is indeed the first recipient of French direct investments in Sub-Saharan Africa. There are around 100 French companies in Nigeria employing more than 10,000people, mostly Nigerians, and contributing to vocational training as well as the “backward integration programme”, a priority of the Nigerian government.
Beyond oil industry (Total, Spie, ponticelli, Cegelec…), French companies’ presence is remarkably diverse: from the pharmaceutical industry (CFAO, Swipha), to microfinance (Lafayette), insurance (Axa), logistics (CMA-CGM shipping Bolloré), dairy production (Danone, Nutriset), energy (Schneider), infrastructures (Bouygues, Ringardas) to name just a few. And new industrial projects in strategic sectors are on the way! Last August, I witnessed in Paris the signing of an agreement between Mr Abdul Samad Rabiu, CEO of the BUA group, and the CEO of the French firm Axens, for the design of its future oil refinery in Akwa Ibom State.
We also want to support Nigeria in shaping the best possible future and help Nigerian companies be part of that ambition. We launched in 2017 the Choose Africa initiative, to help Africa make full use of the tech revolution. This French initiative dedicates 3.5 billion euros to financing and supporting 10,000 African start-ups, micro-businesses and SMEs by 2022. In Nigeria alone, it’s already 240,000 jobs created or retained thanks to this initiative.
We believe that with Nigeria, we can have successful long-term partnerships as we want to build win-win partnerships.
It was interesting to note that with disruptions by COVID last year, resulting in a 55% decline in what Nigeria exported to France, on the other hand, exports from France to Nigeria actually increased 14%. What insights can you share on what drove this outcome?
The decline in Nigerian exports to France in 2020 is mostly due to the brutal drop both in oil prices and in demand for oil products. But it is also interesting to note in particular that our trade in agro products has increased during this period. France imported more than 70 million euros of products from the Nigerian agro-industry, which is a 147% increase in a single year! That is in line with the relationship we want to nurture with Nigeria, supporting the country to increase its food production, developing projects in the agricultural sector, through private investments, and therefore contributing to Nigeria’s self-sufficiency in food products.
What new directions should trade between the two countries be exploring, outside what has been dominated by hydrocarbon (crude oil) at least in terms of exports from Nigeria?
That is a very good point you are making here. I really want France and Nigeria to increase their trading relation beyond the already central oil and gas exchanges, and this is one of the reasons I am here in Nigeria. As I mentioned earlier, agriculture is for us a key cooperation sector. We wish to work more closely with Nigeria to contribute to the country’s backward integration strategy. We also want to contribute to the modernization of the wholesale food market network in Nigeria, since you have in France, next to Paris, the biggest wholesale food market in the world. Nigeria is a big country with a big population; it is important that food could reach every corner of the country, preserving the cold chain, and also helping farmers to distribute their products.
We are also cooperating with the Federal government as well as several states in this strategic field. I might add that we are currently working with the Federal Government to develop “geographical indications” for Nigerian products. This is a Label very much used in France, which protects the unique nature of a local production. It provides a guarantee of quality to the consumer and it adds value to the product, insuring better incomes for the farmers and craftsmen. I sincerely believe that Nigerian producers would hugely benefit if such a concept were to be implemented here. Our wine and spirits sector, and more generally our food products and industry have seen their productions protected thanks to that concept.
Furthermore, we are sure the future of Nigeria is hinged on industrialization and production. France has many companies that can tend to the needs of Nigerian companies that want to invest in different sectors. An example is the refinery project between BUA and Axens. We want to build partnerships where French expertise and talents will be used to help Nigerian companies implement new projects.
On the flipside, what other areas of value in terms of imports from France, can Nigeria get from this trade relationship, but perhaps, under-explored?
France has well recognized know-how in many industries. Developing sustainable cities is a priority for France as it is to Nigeria, a key partner of COP 21 commitments. As the population of Nigeria grows, so does the demand for sustainable infrastructure and, being the biggest country in Africa, Nigeria has needs to match.
I am convinced that we could do more together in the transport sector and in train transportation in particular, where the expertise of French companies is well known. France is also a world leader in water and sanitation management and we are already involved in several projects, financed by the private sector, the French Development Agency (AFD) or the French Treasury.
Finally, the global pandemic we are going through has highlighted the how important it is to develop new cooperation in the health sector. We have been meeting a lot of interest from many States in the country. We are engaged in a significant project in healthcare in Oyo State, which could pave the way for a stronger involvement in the future.
What is being done in the area of knowledge transfer; for science and technology in particular, for Nigeria to develop some local competencies in some areas France has excelled?
If we’re looking at it long term, transferring knowledge is best done through fostering scientific collaboration and encouraging young researchers from both countries to work together. We are working on it through different means: financing short stays in French labs and research centres, encouraging French and Nigerian universities to develop academic partnerships, financing research projects, offering workshops on research methodology or innovation. We also have seed projects on specific topics benefitting selected universities. For the last two years for instance, we had a project focusing on adapting to Climate Change: we donated five “fablabs” and funded three research projects conducted by multidisciplinary, inter-university teams from the universities of Lagos, Ibadan, Jos, Bayero university of Kano and Alex Ekweme Federal University at Ndufu Alike (AE-FUNAI). This year we will be launching another seed project on Health, innovation and AI with six Nigerian universities. We are also working on providing more support and expertise to fablabs both in universities and in local communities, as well as providing ad hoc support to local projects aimed at developing technical competences in electronics design, additive manufacturing and entrepreneurship. An initiative we are doing hand in hand with French companies such as Schneider Electric or Dassault Systems.
Also, the French Development Agency, together with the World Bank, is supporting 15 African Centres of Excellence based in 10 federal and 2 state universities, aimed at helping train locally the next generation of young West African scientists. Its contribution to the scheme is of 40 million USD.
With AfCFTA, which has now started, where on the continent are French investors looking to pitch their tent (as production base) to better serve the new African market?
We welcome the AfCFTA. Increasing trade between African countries will contribute to long term prosperity to the continent. I really believe that Nigeria made the right choice in joining the agreement, not only for itself but also for the entire continent; considering the weight of Nigeria.
For French investors, traditionally more present in the French-speaking countries, AfCFTA offers a wide range of new mutually beneficial opportunities, and Nigeria is of course a top priority. Indeed, Nigeria represents a wide market of over 200 million dynamic mostly young people where so much can be achieved, in a win-win strategy. During my visit in Lagos, I met with very talented and enthusiastic young entrepreneurs who confirmed my conviction that we have much to build together.
Nigeria has hosted a number of French investors like Peugeot, Air France, and CFAO. What have been their major limitations in doing more?
French companies in Nigeria have chosen this country because they know it is a land of promise and opportunities. As I said earlier, nowadays, there are more than 100 French companies or subsidiaries of French companies in Nigeria employing more than 10,000 people and mostly Nigerians. French companies have invested on the long run in Nigeria and are continuing to invest. French companies are reliable partners. They are here to stay and have demonstrated their resilience: we do not abandon our partners, we remain committed, even when facing an unprecedented health and economic crisis.
However, to do business on the long run, investors need a predictable, stable and transparent business environment. This rule applies to any country, including France of course. Nigeria faces some challenges in terms of business environment, of intellectual property rights, of quality of infrastructures, for instance, which I have raised with Otunba Niyi Adebayo, Minister of Industry, Trade and Investment. I am confident that the federal government is committed to preserve and enhance a business-friendly environment.
Generally, I would identify three issues; first, security issues, second, taxation issues, and it was the same in France, we are conscious we had similar problems but businesses need stability in taxation. The third are barriers that restrict importation of certain products. While we agree that domestic backward integration is important for a country like Nigeria, but at the same time, blocking any importation is blocking the ability of creating strong value chains in the country.
Even if you have the major part of your value chain setup in the country, you need certain components from outside the country and if you don’t have these components or raw materials, you cannot create the value chains in the country so you will have to import all the products. In summary, security, stability of taxation and ways to put market protection at a reasonable level to ease creation of value chain but not too closed, otherwise no possibility to create value chains.
From the foregoing, what conditions need to be in place for Nigeria to attract more French investors?
Investors, no matter where they come from, are looking very closely at the security situation of the country and I commend the efforts that the Federal government is doing on this matter in the country.
I think that one of the most important things foreign investors are also looking at before taking any investment decision in a country is the state of the infrastructure especially for logistics. In this regard, I am glad to know that, besides existing infrastructures, a deep-sea port is being built in Lekki that will allow more shipping companies to come to Nigeria. And I am delighted that one French company would be in charge of the container terminal operation. Access to stable electricity power, should it be on-grid or off-grid, is also key. Together with logistics issues, it is instrumental to Nigeria’s competitiveness and attractiveness.
Have there been recent policies or pronouncements in Nigeria that may impede trade and economic relations between the two countries?
We have no bilateral friction or issue with Nigeria. We have regular talks with the Federal Government of Nigeria and we are working together to improve the situation in Nigeria after this terrible crisis that hit all of us. Moreover, Nigeria has been working very hard with international partners to improve the business environment. I was impressed to see that it was part of the countries with the biggest improvement in the last Doing Business rating, which proves that the Federal government’s efforts are paying off.
France knows that our African agenda can’t be achieved without having Nigeria on board. In this regard, France is honoured of the interest shown by Nigeria regarding President Macron’s initiative to host a Summit on the Financing of African economies, which will be held in Paris on May 18th. As the continent’s leading economy and the most populous country in Africa, Nigeria’s voice will be indeed listened to carefully. With this Summit we hope to find new solutions to finance the recovery and the long-term growth of Africa.
What is the value of investment by French companies in Nigeria over the past decade? Also, which are the top five companies, how much have they invested and which sectors of the Nigerian economy.
French companies have invested over 10 billion euros in Nigeria in many different sectors. Indeed the activities of the French companies in Nigeria are remarkably diverse, ranging from pharmaceutical industry to microfinance, insurance, logistics, dairy production and energy.
During the Covid crisis, French companies decided to stay in Nigeria and continued to invest in the country to modernize and develop their activities in the country. With the rebound of the Nigerian economy now anticipated at 2.5% in 2021, I am convinced that more French investors will be willing to invest in Nigeria in the coming months or years as the country is really essential for any development in Africa.
What possibilities exist to have Nigerian investors or businesses setup in France? Or is this by any chance a tall order?
As you noticed my portfolio also includes Attractiveness matters and the French government is also committed to improving the business and investment environment in France. And as a matter of fact, in 2019, France was the first destination in EU for foreign direct investments.
So it is also part of my job to bring investment to France including Nigerian investments. We are indeed in talk with different Nigerian entrepreneurs and CEOs to build partnership and offer them the best opportunities in France. I am confident that we will be able to make some announcement at the next Choose France Summit that President Macron will hold on the 28th of June of this year in Versailles. France will always be open to foreign investors and will do its best to attract them.
Any other thoughts you’d like to share….
I would like to congratulate the Nigerian people for the appointment of Dr Ngozi Okonjo-Iweala as the 7th World Trade Organization’s Director-General. It is a wonderful achievement both for Nigeria and Africa and for women in general as well. France and the European Union have been supporting her from the very beginning and we are very happy that she has finally been chosen for this position. There is so much to do in the coming years in the field of global trade. She has a lot of work to do and she can count on us to support her!
