Gentile Utente, auspicando di farle cosa utile e gradita, pubblico questo articolo a cura di Massimo Zaurrini, direttore della rivista “Africa e Affari” apparso sul sito dell’ISPI, il 3 agosto 2023:
“ The Italian economic approach toward Africa has changed over time. More and more companies, associations and institutions are venturing into the continent, extending their focus beyond North Africa as well.
To evaluate the evolution of Italy’s economic presence in Africa, in terms of both trade and investments, it is best to narrow the focus on a specific period – the past decade – where there has been a quite evident change.
A data point and an image well illustrate this evolution. Let us start from the former. In 2013, there was only one office of ICE (Italy’s national foreign trade agency) for all of sub-Saharan Africa, and that was in Johannesburg, South Africa. In 2023, considering the upcoming openings expected in July, there are eight ICE offices in Sub-Saharan Africa: Johannesburg, Accra (Ghana), Addis Ababa (Ethiopia), Dakar (Senegal), Lagos (Nigeria), Luanda (Angola), Maputo (Mozambique), and Nairobi (Kenya). Moving to the latter, the image refers to the Macfrut Fair, one of the biggest Italian and international events for fruit and vegetable machinery. In 2013, although Africa was mentioned in one of the conferences on the sidelines of the Fair, Africa’s presence was fairly limited, while the theme did not even seem to arouse the interest of the operators present at the event. In 2023, on the other hand, Africa was playing a central role at Macfrut. Its presence was palpable in the audience that crowded the conferences dedicated to the continent, among the buyers who went around the stands, and, above all, among the exhibitors. There were cumulative stands organised by the ICE, national stands (an entire pavilion divided between Ghana, South Africa and Nigeria) and stands of single companies.
Italy’s presence in the region: more pronounced, more diversified
Generally speaking, it can be said that the Italian business world’s approach to the continent has changed in recent years. It has gone from being mistrustful to being more curious, with a growing number of companies, associations and institutions that have begun to push their gaze beyond nearest North Africa. In the past, only a limited number of Italian companies worked in Africa, and they had a specific focus, such as large groups in the energy sector, those active in construction, and major infrastructural projects. Alongside these players, small and medium-sized companies have made their way into a variety of sectors: from agriculture to processing, from new technologies to pharmaceuticals, from engineering to food, as well as fishing, livestock, textile, components and, of course, the machinery sector.
In 2022, an interchange worth more than EUR 68 billion was recorded. This figure was up sharply from the previous year, mainly due to imports from Africa, which almost doubled from EUR 24 billion to EUR 47 billion. Italian exports also reached a peak of 21.3 billion euro in 2022. On the import side, purchases of raw materials, especially energy, have been of great importance, enhancing the role of supplier countries such as Algeria, Libya, and Egypt in North Africa, and Angola, Mozambique, Gabon, Ghana, and Congo in sub-Saharan Africa. According to recent data on exports made available by the ICE, investment goods continue to prevail: especially machinery, but also electrical material and pharmaceutical products.
Despite recent growth, however, the unexpressed potential remains very large, considering that Africa could absorb far more than the current 3.4% of total Italian exports. Nevertheless, the macroeconomic data on interchange do not yet seem to register the same change of pace highlighted at the beginning. The Statistical Yearbook of Foreign Trade 2022 (the latest available, with the next release at the end of August) produced by ISTAT and the ICE shows, starting from 2012, a certain static nature in terms of trade magnitude. In 2012, Italian exports to Africa amounted to almost 19 billion euro, compared to 21.3 billion euro in 2022. Similarly, Italian imports from Africa in 2012 amounted to €35.2 billion compared to €47 billion in 2022.
The investment puzzle
Italian investments are a different issue. During the last decade, Italy has set some positive records in this field. In 2015, the country (according to a report by Ernst&Young) was the leading investor with $7.4 billion (10.4% of the total FDI to Africa that year), while in 2016 Italy was the first European investor. However, the statistical snapshot provided by the investment data should be interpreted with extreme caution, as these can easily be ‘drugged’ by individual projects in ‘capital intensive’ sectors, i.e. those sectors that require large amounts of capital to get started. The most ‘intensive’ of these sectors is undoubtedly the energy sector: the operation of a group with the capacity of ENI, the leading Italian oil and gas operator in Africa, is capable of determining fluctuations in the graphs of Italian investments in Africa. And it is no coincidence that of the 7.4 billion in investments in 2015, over 6 billion was what ENI had earmarked that year for the natural gas development project in the Zohr field in Egypt.
The most recent figure, confirmed by the Bank of Italy and ISTAT, refers to 2021. It registers a contraction of Italian investments in Africa of approximately EUR 1 billion, over 40% less than the 2017 figure. Undoubtedly, the pandemic, followed by conflict, and finally the difficulties in the financial field have cooled the general investment environment at a global level. According to the Bank of Italy, the return flows from Algeria (minus 862 million), Egypt (minus 237 million) and Ghana (minus 213 million) had a major impact on the Italian figure in Africa in 2021. On the other hand, investments in Angola (EUR 87 million), South Africa (EUR 60 million) and Tunisia (EUR 40 million) were positive highlights. In any case, the recent drop is not enough to reverse a trend that has been constant for 7-8 years now. According to the 2015 OECD report ‘Italy & Africa deepening economic ties’, in fact, Italian investments in Africa were decreasing in the period from 2009 to 2014 and Italy was ranked 17th, overtaken among others by Greece, Spain and Switzerland. Thus, the data of recent years confirms a strengthening of the economic partnership between Italy and Africa.
Additionally, as already pointed out, it must always be remembered that the macro-data snapshot on investments provides a picture that is only partial.
It is evident, in fact, that the investment – for example – in Senegal of a medium-sized company active in the production of melons is a small fraction of an investment project by the hydrocarbon giant. And yet, the impact that such an enterprise generates in ‘familiarising’ the entrepreneurial fabric with Africa would be of great worth. It will cascade into the radar of competitors and players in the supply chain, bringing countries that were hitherto absent, causing a chain of growing interest and links, whose results, in terms of numbers and statistical data, will be seen in a few years’ time.
It is also important, however, to highlight some elements that are still missing to push that “army” of Italian small and medium-sized enterprises (SMEs) and create a group of sufficient weight to make a statistical impact. The growing political will to see Africa as an economic partner, proclaimed in words by many governments, must be implemented by supporting medium-sized Italian companies intrigued by the continent. Players from all over the world have long had a presence in the African market. Competition from companies from all European countries is fierce, as well as from China, the United States, Turkey, Israel and Brazil. And many Italian SMEs complain above all about difficulties on the economic-financial side. The absence of major Italian banks from the continent and the prudence or mistrust with which, as per its mandate, the Italian export credit agency, SACE, categorises most African countries makes it more difficult for SMEs to operate. On this front too, something has moved in recent years, but perhaps more could be done. An attempt could be made to set up an Italian system capable of facilitating the arrival in Africa of more medium-sized Italian industries that could also represent a turning point for the African economic system. Looking ahead, in fact, Africa has already traced its path: the one marked by the African Free Trade Area (Afcfta). The project is taking its first steps and will reach maturity in 10-15 years. But Afcfta is designed to make Africa a free market, first and foremost, for African producers. To add value and process goods and services for sale on the continent, African entrepreneurs need machinery and expertise that Italian SMEs are able to offer. A final element that points to a further change in economic relations between Italy and Africa in the near future is linked to the very nature of the forthcoming economic revolutions. If, until the third industrial revolution, Africa seemed to be structurally lagging behind other parts of the world, the fourth seems to have the potential to bring productive realities closer together with a convergence of potential and interests.
VICE CONSOLATO ONORARIO D'ITALIA 