Business always finds opportunities in the face of adversities.American industrialist John D Rockefeller is quoted as saying: “I always try to turn every disaster into an opportunity”.For non-French companies, the opportunity could be the country’s waning inf luence in Francophone Africa. These are countries which include French as an official language and which trade using the CFA Franc.Foreign Policy columnist has written: “There is a remarkable uprising against French inf luence under way in the Sahel, one of the African regions where French domination has been most thorough over the decades. “One after another, the leaders of three states in this semi-arid region – Niger, Burkina Faso, and Mali – have spoken out against French sway in West Africa and moved to reduce or eliminate the presence of French soldiers, corporations, and diplomats in their countries.”In its response, Fitch Ratings said the exit of French banks from West Africa “gives emerging pan-African banking groups significant space to grow, either organically or through mergers and acquisitions. “This should stimulate competition and benefit local banking sectors despite some short-term challenges".This could impact trade f lows. A lower rating, or the exit of a foreign shareholder, could make access to the global financial system and correspondent banks more difficult, potentially disrupting cross-border remittances, payments, and trade finance activities. “In many sub-Saharan markets, where FX liquidity is tight, it could also make access to hard currencies more difficult without the FX liquidity lines that French parent banks typically provide to support trade finance activities.“However, these are short-term hurdles and banks typically have good access to funding from development finance institutions,” states Fitch.French banks have curtailed local investment through tighter credit controls than local banks, it adds.An investment policy review of the West African Economic and Monetary Union (only available in French) states that, despite a succession of regional and international crises, West African Economic and Monetary Union (Waemu) Commission members, including Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo, “have seen increasing economic growth in the last years”. However, it adds, high levels of investment coupled with social and economic reforms are required to overcome development challenges, including education, infrastructure, and food security. “While foreign direct investment (FDI) has increased over the last decade, it remains below comparators and concentrated in few Waemu member states,” it adds.The International Monetary Fund predicts that growth will rise to 6.8% in 2024-2025, due to new hydrocarbon production, and hover near 6% in the longer term.
