Of all the qualities that the former French leader Napoleon Bonaparte valued in his generals – or so it is said – luck was the most important. French President Emmanuel Macron has his share. For example, the implosion of the center-left and center-right candidates in the 2017 elections, which gave him a clean shot at the presidency. His first term coincided with another “fortune”; The nativist inward turn brought about by Brexit and former US President Donald Trump has left France more space on the world stage, especially in Africa.
Macron has a special vision for France’s relationship with the continent. First, a more open approach to French abuses during and after the colonial era. In 2018, for example, France officially admitted the murder of Maurice Audin – a member of the Algerian Communist Party who was tortured to death by the French army during the War of Independence. In Rwanda, Macron recognized France’s role in the 1994 genocide in May.
Macron is also promoting activist economic diplomacy. It is linked to a criticism of France Inc., which he considers to be too shy in dealing with global markets beyond their comfort zone. “Forty years ago, France had a prominent position in Nigeria,” President Macron told The Africa Report. “Large French companies hold leading positions in the construction, manufacturing and logistics sectors. At that time there were more than 10,000 French nationals living in Nigeria. “
But in the early 2000s, French companies got lost due to the challenge of newcomers.
Michelin and Peugeot, for example, had iconic factories in Port Harcourt and Kaduna, respectively – both have since closed. Today less than a thousand French citizens are registered at the embassy in Abuja. “The irony is that many are successful overseas [non-French] Companies now employ French nationals in Nigeria, ”says Macron.
No inferiority complex
Emmanuel Macron’s relationship with the continent began in Nigeria. In 2002 he spent half a year as an intern at the French embassy in Abuja and discovered a country that has little in common with more famous Françafrique meeting places such as Abidjan, Dakar or Libreville.
“[Nigerians] do not have an inferiority complex with France because the country is not on their radar, ”Macron said in a recent book on Antoine Glaser and Pascal Airault. “I was very glad [in Nigeria]. There was so much to do, with extremely entrepreneurial people, very creative, with whom I could have a relationship at eye level in a very spontaneous and natural way. “
The ambassador found it useful for the young intern to spend time outside the official French diplomatic circles and sent him to Jean Haas, the current executive director of the advisors at Relais International. Haas has been building a network of connections with Nigeria’s private sector since the 1980s.
Certainly, “hard” factors such as increasing insecurity and poor infrastructure make life difficult for companies in Nigeria.
An editorial in Lagos’ The Guardian newspaper in February 2007 sounds incredibly familiar today: “Michelin’s departure brings a number of problems to the fore,” the newspaper said. “The government’s failure to create a favorable environment for tire manufacturers, the energy crisis and the impact on business costs, and the abuse of the president’s waiver by some privileged Nigerians.”
But three “soft” factors also affect French companies in Nigeria – a lack of personal connections, a lack of nerves and a lack of flexibility.
First, networks. In recent decades, French multinational corporations have rotated their foreign employees a lot, and the boardrooms are increasingly lacking a “Monsieur Afrique” to maintain networks. “Doing business in Nigeria is first and foremost a story about people and the connections between them – if you don’t have that, it’s difficult to do business,” says Haas.
Next, nerves. The media house Canal + has invested in the Nigerian streaming service iROKO, which was developed by Jason Njoku, who is known for the worldwide delivery of Nollywood productions. The French media company belonging to Vivendi has a clear Africa strategy: expansion into the metropolitan areas of Ethiopia and Nigeria. But when ROK Studios, iROKO’s production arm, hit the market, even Canal + wavered on its purchase – although it was a very modest amount, according to industry insiders.
“US companies don’t ask questions. Netflix and Disney know that the next Black Panther will be ‘Made in Africa’, ”says Jacques Eliezer, a partner at Procadres International who is being sent by Vivendi to turn ROK inside out. “Look at Disney throwing millions on a Nigerian illustrator who only wrote a few comics,” he says [referring to Iwaju, the series Disney will create with Nigerian-Ugandan Kugali studio].
Of course, not all French companies in Nigeria lose their nerve. Although TotalEnergies had little transparency about the impending change to Nigerian oil laws known as the Petroleum Industry Bill, TotalEnergies commissioned the largest offshore platform ever built, which is now operational on the Egina deep sea field. With a peak production of 200,000 barrels per day, this corresponds to 10% of Nigeria’s total oil production.
For Mike Sangster, managing director of Total in Nigeria, “where Total was brave to continue the $ 16 billion project” after oil prices collapsed in late 2014.
The final soft factor at play is what it takes to crack what is known as “luck at the bottom of the pyramid,” that is, on the small portion of the disposable income of the 195 million Nigerians who are less are wealthy to target rather than focus on the five million who are well off. It requires some flexibility to adapt products or services that might work in one context to another.
Of cows and crossbreeds
For French dairy giant Danone, it was imperative to dip at least one toe in Nigerian water. Affected by the import ban on dairy products, which is part of the Nigerian central bank’s “backward integration” policy, the company sought a more flexible approach. In July 2019, it bought FanMilk, a maker of ice cream, yogurt drinks and juices. That year it announced it would build a flagship dairy farm in Ogun state to supply FanMilk with Nigerian milk.
“We import cows, but we will breed hybrids with native cows,” in order to have a robust but productive cross, says Ferdinand Mouko, managing director of Danone in Nigeria. A metaphor that may be applicable elsewhere.
Macron’s solution to bringing French companies back into Nigeria is to create a new France Nigeria Business Council to be launched on the sidelines of the Choose France Summit in Versailles on June 28th.
This is the reincarnation of a previous initiative that didn’t quite work out. After Macron’s 2018 presidential tour of Nigeria, which included a visit to Fela Kuti’s family’s “Shrine” nightclub, a Franco-Nigerian economic dialogue took place in Lagos. But on the way back to France, French business leaders were reluctant to meet Nigerian CEOs.
“Not a single French CEO has come,” Macron said to Glaser and Airault and complained about the short-sightedness of the French group. “We had to get involved […]. In the end, Abdul Samad Rabiu [BUA Group] signed with us [a contract with French company Axens for the construction of a refinery]. The Americans are angry that we managed to swing it. “
This pendulum has not stopped swinging. For example, the BUA Group is signing a plasterboard factory with the French group St-Gobain. In the energy sector, the financial close of Train 7 from Nigeria LNG will provoke a huge investment in gas from all stakeholders, including Total.
It’s not all one-way traffic either. Access Bank, for example, is opening a bank in France to help its customers in Francophone Africa who need correspondent banking connections.
Nigeria certainly requires courage and real commitment to local partnerships. But it also has a sign that says “Caveat Emptor” in green and white flashing lights around its neck. No one, says Haas, should minimize the risk, even if they reveal the potential. “The challenges are just as you may have heard, only worse.”
South African retailer Shoprite is the newest multinational to pack its bags and grapple with exchange rates, import bans and the rising cost of infrastructure that make its products inaccessible to the middle class who might visit a mall. But almost under the radar in some cases, a number of refineries, free zones, and ports going online in the next two years could unlock the country’s true potential.
You can see some of them if you jump in a car and brave the endless traffic jams of the Lekki Peninsula east of Lagos. For tens of kilometers to Aja and beyond, residential and retail projects have sprung up like mushrooms. Every few hundred meters there is a gas station, a supermarket, a shopping center.
Turn right on Eleko Beach Road and you will meet Lekki Free Trade Zone Road along the coast road. Dangote’s refinery, with a capacity of 650,000 barrels per day, is towering and about 80% complete. In addition, the finished fertilizer plant pumps 3 million tons of urea per year. Together they will help bring Nigeria’s foreign exchange reserves back into balance.
Connect the dots
A factory with red fronts also signals a joint venture between the US grain giant Kellogg’s and Singapore’s Tolaram. Across the street, China Harbor Engineering is well on the way to completing the Lekki deep-water port, operated by France’s shipping giant CMA CGM. For Dinesh Rathi, CFO at Tolaram, the combination of deep sea port and integrated free zone is a “miracle weapon” for those companies that recognize the potential of the region but shy away from the infrastructure roadblock at Apapa and Tin Can Island.
Back on Victoria Island, a city rises from the water, built by the Chagoury Group. In Port Harcourt, another free zone is preparing to open a sugar refinery, which will open up opportunities from the African continental free trade zone and compete with sugar imports from Brazil. In northern Nigeria, sugar plantations and rice mills from Nigeria’s leading conglomerates act as anchors for other investors.
Yes, the headlines in Nigerian newspapers warn of the collapse of the nation, covering ethnic unrest, stagflation, hundreds of kidnapped school children and the national oil company claiming it will “not be able to transfer money to the government’s federal account.” “. All of this is true. But luck favors the brave, as Napoleon might have said.