Cameroon and Cote D’ivoire among the top 10 largest economies in Africa
“Francophone Africa is just too important to ignore and makes up 17 per cent of the population of Africa,” Victor Lopes, economist for Sub-Saharan Africa at Standard Chartered Bank told CNBC Africa.
He added that countries such as Cote D’voire and Cameroon are among the top 10 largest economies in Africa and the region also received 20 per cent of Africa’s total foreign direct investment (FDI).
According to reports, francophone Africa received a total FDI of 47 billion US dollars between 2003 and 2011.
“What investors see is the huge potential in the region,” said Lopes.
The language barrier would have been a deterrent for foreign investors in the past however in recent times; English training has become quite prominent in the region’s corporate world.
“A lot of the businessmen that you deal with can communicate in at least two business languages, which are French and English. If they don’t speak English, they usually have an associate who can so I don’t think that it’s an obstacle that can’t be overcome,” added Sarah Warren, Structured Trade Transactor from RMB Private Bank.
While a significant French influence still exists within the region, many of the countries are diversifying their trading partners, especially with emerging economies such as Brazil, China, and India.
“There is still quite a significant French influence in francophone Africa but the influence is declining year by year,” said Lopes.
“It seems corporates from the emerging world are strongly competing with the French corporates in the region.”
Warren pointed out that although these French speaking countries are grouped together, there are certain factors that do differentiate them such as their primary sources of income as well as trading partners
“Those kinds of things will make people view them as a region rather than looking at them as individual countries but certainly the growth potential in each of those jurisdictions, allows you to single those countries out,” she explained.
For instance, the Ivory Coast is the world’s largest cocoa producer whereas Cote D’voire is known for its palm oil plantations and Togo for its Robusta coffee beans.
This, Warren added, proves that each country within the region boasts major investment potential.
On the other hand, francophone Africa’s poor infrastructure has been quite challenging when exporting products to other markets intra-regionally as well as globally.
“There is a desperate need for funding for infrastructure projects. The cost of getting that product to the market prohibits them from really expanding their exports to the amount that it could really reach,” said Warren.
She therefore proposes that when companies invest in the region, they spend on infrastructure projects first.
“Opportunities do exist but if you don’t have the infrastructure to move those goods, you’re really not going to come right,” Warren concluded.
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This article first appeared in http://www.cnbcafrica.com