FrenchCouncilof InvestorsinAfrica.

French Investment in Africa

1. WHO IS THE CIAN AND WHAT DO YOU DO?

Created in 1979, Cian is the oldest French business association dedicated to companies invested in Africa. Open to businesses of all sizes and sectors, it currently has 170 members who carry out 80% of French business in Africa, i.e. an estimated 60 billion euros in turnover.

The Cian has three major roles. First, it leads a network of more than 1500 professional who meet in thematic meeting and conferences but also through personalized exchanges. It also offers expertise to its members, either by experience sharing, or through our geographical experts and our 7 technical committees (European Institutions, Compliance, CSR&SDG, Digital, Health, Human Resources, Legal&Tax and Safety).Andfinally,Ciandevelopsitsinfluencewiththepublic and private stakeholders in France, Africa, and Europe to improvebusinessclimateandpromotetheimpactofprivate sector and its contribution for the countries development.

2. WHY INVEST IN AFRICA?

Africa is one of the world’s last major pools of growth. It has largereservesofnaturalandstrategicresources(agriculture, mining, and energy) that are not yet sufficiently processed domestically. It also has a booming demographic that fuels demand and the development of middle-class markets. These two elements partly explain the economic growth rates of the last 10 years and put Africa at the heart of the reorganization of global value chains. In this context, if you don’t invest today, you will miss out on the markets of tomorrow.

3. WHAT ARE THE PARTICULAR ADVANTAGES FOR FRENCH INVESTORS?

The particularity of French companies in Africa, and more broadly of French investors, is that they have often been establishedforalongtimeandinmorethanjustonecountry which makes them more resilient. They also conceive of their investmentsinthelongrun.Asaresult,theyhavelargestocks of FDI and a good understanding of the local contexts. This occursinalmostallAfricancountrieswithaspecificinfluence in French-speaking Africa, which happens to be the area where we find the most dynamic African countries in terms of growth (DRCongo, Senegal, Ivory Coast, Niger, Benin >6%). However, it would be wrong to assume that they are only in French-speaking countries, since their three main countries of implementation for French investors are the three biggest economies of the continent: South Africa, Nigeria, and Egypt. They are also well represented in Portuguese-speaking countries such as Angola and Mozambique.

4. WHAT ARE THE REASONS THAT GIVE INVESTORS EASE IN AFRICA?

According to Cian’s annual barometer, the business environment in Africa is slowly but noticeably improving, especially in terms of infrastructures and banking systems. African governments are recognizing the role of the private sector in development and are moving toward the implementation of PPPs in their national development and investmentplans.Asaresultofthismomentum,nearlythreequarters of the continent’s established businesses can say they are profitable.

5. HOW CAN CIAN ADVISE INVESTORS IN AFRICA?

Cianorganizesdifferenttypesofmeetings,eitherrestrictedto our members or open so that they can exchange with other spheres. Our thematic committees gather experts from the privatesectorbysectorofactivity,professionalfield,orsubject of expertise. Our lunch debates bring together private sector leaders and political decision-makers to discuss specific topics, and our country meetings allows private stakeholders to meet with country’s official delegations. Finally, the Cian Africa Forum is a meeting that brings together more than 1,000 business and official representatives each year in Paris.

6. WHAT REGULATION REGIMES CAN YOU TELL OUR READERS ABOUT?

Regulation regimes are very heterogeneous in Africa, but it is important to be informed on regimes that are implemented and applied in targeted countries, as well as its regional organizations.TheAfCFTAprocesswillhaveanimportantrole intryingtoharmonizetraderegulationsacrossthecontinent.

Cian is tackling these issues in its Legal&Tax committee, with an annual reunion to discuss the evolutions in fiscal environments for each region and countries for example. Furthermore, with some of our experts being founding members and writers of OHADA, this committee also has a specific interest in the reforms of the OHADA uniform acts which represent another opportunity for the harmonization of regulations.

7. HOW DOES THE CIAN INNOVATE?

Cian innovates to maintain its relevance and help French companies and their African and international partners. It closely monitors the latest trends and frequently updates its services, such as its thematic committees whose core themes are regularly updated, like the Anti-corruption committee which became the Compliance committee. Cian also updates its productions like its publications, which are reissued and always address key and contemporary issues fortheprivatesectorinAfrica,thelastonebeingaHandbook titled “Using intermediaries in Africa”. During the covid-19 pandemic, Cian also adapted to expand its digital services and webinars.

8. HOW DOES THE CIAN DEAL WITH DIVERSITY, SUSTAINABILITY AND ESG?

Cian has a long-standing commitment to these issues, as demonstrated by its CSR and anti-corruption charters dating respectively from 2004 and 2005, and which have since been updated. Cian is also committed to the fight against chronic diseases and to the promotion of vocational training and quality employment in Africa. In addition to its charters, Cian promotes best practices among its members through the CSR & SDO, Compliance and Health committees, and advocates for compliance and ESG principles.

Etienne Giros - CEO of CIAN

1. CAN YOU TELL US ABOUT YOUR TRAJECTORY AND HOW IT LED YOU TO THE ROLE OF DIRECTOR OF CIAN?

A graduate of Sciences Po (Political Sciences) in Paris and of Economics,IstartedworkingwithAfricain1986asDeputyCEO ofTranscapatCFAO.In1991,IjoinedtheBolloréGroupasCEO Finance for Africa, before becoming in 2000 the CEO of the AfricaDivisionwhichincludedalltheBolloréGroup‘sactivities on the continent. In 2006, I was appointed Vice President Media for Bolloré and directly in charge of the polling and research institute CSA. But it is my interest in Africa that led me to put my experience on the continent at the service of theFrenchprivatesectorasExecutiveChairmanofCiansince 2014, and as its Chairman since 2022. Since 2018 I have also been President of EBCAM, which is the European equivalent of Cian.

2. WHAT DO YOU THINK IS CRUCIAL FOR FRENCH INVESTORS WHEN THINKING OF INVESTING IN AFRICA?

There are a few things that must be kept in mind when it comes to investing in Africa, and they are related to the knowledge of the local economic, social, and cultural environment in which you invest.

Indeed, investors often fail because they did not take in consideration many specificities of the African markets, especially those that are not explicit and related to informal sectors. That’s why I would recommend that your first investment should be made with a partner company that has experience in the markets you are targeting.

You also need to have an accurate perception of risks in Africa. This perception is often too pessimistic. Africa is not moreorlessriskythananyothercontinent.Whatisimportant is to assess your own risks and not take into consideration those unrelated to your activities.

3. WHAT DO YOU PREDICT FOR THE FUTURE OF INVESTMENTS IN AFRICA?

In the near future, country-investments will greatly benefit fromthedevelopmentoflocalmarketsinAfrica.Indeed,more and more African countries insist on transforming their raw materials locally and by themselves. They strive to structure local supply chains and seek technological transfers and support to vocational training. In a similar way, regional and continental-investmentswillbenefitfromtheAfCFTAprocess of continental integration, and the multiple infrastructure projects that are attached to it and will multiply the value of trade by many folds.

On a negative note, however, investors should be worried of the impact of climate change in Africa, and the need to reinvent global trade and international value chains.

4. WHICH AREAS / COUNTRIES DO YOU PREDICT WILL GROW?

Thecontinentishometomanyofthemostdynamiccountries in the world in terms of economic growth. Recently, this is especially true in West-Africa (Nigeria, Senegal, Ivory Coast, Benin, Togo), but there are also huge opportunities in Central Africa. Countries like Gabon and especially DRCongo could rapidly grow on an industrial level thanks to their resources, but other trajectories like that of Rwanda are possible with a focus on developing business, tech, and financial environments. In North Africa, Egypt has the strongest growth perspective. In East Africa, Ethiopia and Kenya are promising markets.

It would also be important to underline the sectors of interest fortheyearstocome.TheInfrastructures,Digital,Technologic and Telecommunication sectors are already known for their dynamics and impact on other sectors. At Cian, we have recently seen the boom of the retail industry, as well as the multiplication of projects related to water, agro-industrial and agribusiness sectors. City-oriented and urban planning services, as well as vocational training and education, are also promising sectors to invest in.