African Business: Could you provide us with a snapshot of the wider issues in North Africa and the Sahel?
Amine Antari: There are three issues. First is the social and economic impact of the pandemic, as well as the current crisis between Russia and Ukraine. We saw during the pandemic that a lot of countries and businesses have been suffering, especially in North Africa, which is reliant on tourism.
And when you add the situation in Ukraine and the significant increase in the price of oil, people in North Africa will feel it. They were not necessarily happy before, but it is just going to aggravate the situation.
The second issue is that of food and water security. This year, unfortunately, wasn’t a great rainy season, and with a lot of countries already reliant on importing basic products – wheat and so on – we could see restrictions and limitations as a necessary response to manage the summer. This is going to remain a huge challenge for countries in North Africa and the Sahel.
The third, which we are seeing a lot more clients coming to us for, is governance and transparency. Historically, these have been quite limited, which doesn’t help international companies that want to establish and do business in Africa.
I think we are going to see a lot more interest from local companies and government entities wanting to improve their standing and make these investors more comfortable.
Tunisia are in talks with the IMF, there has been a failed election in Libya and there is an escalating diplomatic spat between Algeria and Morocco over Western Sahara, which also has implications for Mali. What is your reading of these situations?
Tunisia has been in talks with the IMF to secure a rescue deal of several billion dollars but that comes with conditions. They are asking for deep reform of the Tunisian economy, as well as reductions in the public wage bill, which in Tunisia is quite significant. What is important, given the size of the deal, is that the IMF are comfortable with governance, and sure that the money that they will be giving is used with the right intent.
In Libya, as you said, the election failed to happen, and a few weeks ago Fathi Bashagha was appointed prime minister by the Tobruk-based House of Representatives; so basically not the government of the core, but of the west side of Libya.
I think the current interim prime minister Abdul Hamid Dbeibeh [prime minister of Libya’s interim Government of National Unity] is still in power and has a plan with the support of Western countries for a new election in June, but unfortunately there is a risk for Libya to come back to a chaotic situation after a few years of calm.
Between Algeria and Morocco, things have escalated. They’re quite big markets with a lot of commonalities so it’s unfortunate to see tensions not being resolved. Diplomatic ties have been cut on both sides, but there’s also external measures being taken. The recent accord between Israel and Morocco has changed the dynamic within the region, as well as the US recognising Morocco’s sovereignty over Western Sahara; an issue that is not helping tensions.
And to your point regarding Mali. Especially with the tension between France and Algeria and the withdrawal of French troops from Mali we are beginning to see Algeria start to expand its influence there, and also by investing in other countries in Francophone Africa.
This is something that Morocco has been doing for quite some time, especially after rejoining the African Union. Competition will stay that way until both governments agree on a plan to have a better relationship, which is something I hope will happen.
Cop27 in Egypt is a big moment in Africa’s climate change battle. How might the global talks play out in November?
There are two parts in my answer to this question. First, Egypt says it’s going to be a platform to allow African countries to deliver a clear message to developed countries, saying, basically, “you made certain financial commitments and commitments to reduce your impact on the climate, and you haven’t done much.”
Because it’s clear that developing countries are the ones that are mostly impacted and suffering the consequences of climate change. It will be quite interesting to see, with the current political situation, how developed countries will react to those messages.
But the second part is that it is a way for Egypt to be put back on the map. What I mean by that is how, after the changes in regime, the pandemic came and Egypt hasn’t quite been public. I think this is a way to promote tourism, but also establish partnerships with various international institutions and companies that will be present to see if they can help with green projects, and business in general.
So I think it’s a great opportunity for Egypt, and I think they are planning on using the full extent of it for the benefit of the Egyptian people.
Understanding risk allows you to understand where the opportunities are. What keeps you optimistic about Africa?
Looking at Africa in general, it’s what I call an untapped market. There are a lot of opportunities and sectors, and a lot of companies are already invested and interested in the continent.
In mining and renewable energy, we’ve seen our clients partnering with local companies and investing in big opportunities; it could be solar plants or it could be mining facilities. I think the energy sector, whether renewable, mining, oil or gas, will help African countries rely less on imports and have more stability in the face of volatile oil and gas prices.
The other sector that’s booming is agribusiness. Africa has several well-known exporters, but it’s becoming more based on technology, which makes things more efficient and sophisticated, allowing for exports with a diminished loss.
And finally, tourism, which took a huge hit during the pandemic. North African countries have been known to attract a lot of tourists, and I think that will continue. It’s expanding a lot, with lots of projects and investments planned for the next few years.
I’m seeing a lot of international companies establishing regional headquarters – or their platforms for targeting Africa – in Morocco and Egypt. And the interesting thing about Egypt is that it acts as a bridge between North Africa, Africa in general, and the Middle East.
You have a lot of investment from the UAE and Saudi into Egypt and a lot of partnerships. Following Cop27, I think they will be quite successful in the next few years as the country becomes more stable and they focus on rebuilding the economy.
I think to de-risk Africa, it’s basically digitalisation and making things electronic as much as possible. I think that’s a positive side of the pandemic; it accelerated that process, and something that could have taken 10 years it did it in two or three.
Also corporate governance, compliance and transparency. We’re getting a lot of requests to help with this and I think it will continue to help promote more foreign investment and foreign capital.
Given what happened to Russia, with a lot of companies pulling their business, I think maintaining political stability – showing that countries can have good rapport and behave in a civilised manner – will be key to the future of the North African region.
Listen to the interview in full on our podcast North Africa update with Amine Antari, Head of Middle East, Kroll.