African Business: Could you give us an overview of the broader issues in North Africa and the Sahel?
Amine Antari: There are three issues. The first is the social and economic impact of the pandemic, as well as the current crisis between Russia and Ukraine. We have seen during the pandemic that many countries and businesses are suffering, especially in North Africa, which is dependent on tourism.
And if we add to this the situation in Ukraine and the significant increase in the price of oil, the populations of North Africa will feel it. They weren’t necessarily happy before, but that only makes the situation worse.
The second issue is that of food and water security. This year, unfortunately, has not been a great rainy season, and with many countries already dependent on the import of basic commodities – wheat etc. – we could see restrictions and limitations as a necessary response to manage the summer. This will remain a huge challenge for the countries of North Africa and the Sahel.
The third, for which we see many more clients coming to us, is governance and transparency. Historically, these have been quite limited, which does not help international companies that want to set up and do business in Africa.
I think we’re going to see a lot more interest from local businesses and government entities who want to improve their position and make those investors more comfortable.
Tunisia is in talks with the IMF, there have been failed elections in Libya and there is a diplomatic escalation between Algeria and Morocco over Western Sahara, which also has implications for Mali. What is your reading of these situations?
Tunisia is in talks with the IMF to secure a multi-billion dollar rescue deal, but it comes with conditions. They demand a profound reform of the Tunisian economy, as well as reductions in the public wage bill, which in Tunisia is quite significant. What’s important, given the size of the deal, is that the IMF be comfortable with the governance and confident that the money it’s going to hand out is being used with the right intention.
In Libya, as you said, the elections did not take place, and a few weeks ago Fathi Bashagha was appointed Prime Minister by the Tobruk-based House of Representatives; so basically not the core government, but the western side of Libya.
I think the current acting 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 that Libya will return to a chaotic situation after a few years of calm.
Between Algeria and Morocco, things got worse. They are quite large markets with a lot of commonalities, so it is unfortunate to see the tensions not being resolved. Diplomatic relations have been cut on both sides, but external measures are also being taken. The recent agreement between Israel and Morocco has changed the dynamic within the region, as well as the recognition by the United States of Morocco’s sovereignty over Western Sahara; a question that does not help tensions.
And to your point about Mali. Especially with the tension between France and Algeria and the withdrawal of French troops from Mali, we are starting to see Algeria start to expand its influence there, and also by investing in other French-speaking African countries.
This is something Morocco has been doing for some time, especially after joining the African Union. The competition will stay that way until the two governments agree on a plan to improve their relationship, which I hope will happen.
The COP27 in Egypt is a great moment in the fight against climate change in Africa. How could the global talks unfold in November?
There are two parts to my answer to this question. First, Egypt says it will be a platform for African countries to send a clear message to developed countries, saying, basically, “you have made certain financial commitments and commitments to reduce your impact on the climate , and you haven’t done much.”
Because it is clear that developing countries are the most affected and suffer the consequences of climate change. It will be quite interesting to see, with the current political situation, how the developed countries will react to these messages.
But the second part is that this is a way for Egypt to be put back on the map. What I mean by that is how after the regime changes the pandemic came and Egypt didn’t quite go public. I think it’s a way to promote tourism, but also to establish partnerships with various international institutions and companies that will be present to see if they can help green projects, and businesses in general.
So I think this is a great opportunity for Egypt, and I think they plan to take full advantage of it for the benefit of the Egyptian people.
Understanding risk allows you to understand where the opportunities lie. What makes you optimistic about Africa?
Looking at Africa in general, this is what I call an untapped market. There are many opportunities and sectors, and many companies are already invested and interested in the continent.
In the mining and renewable energy sector, we have seen our clients partner with local companies and invest in great opportunities; these can be solar power plants or mining facilities. I believe that the energy sector, whether renewable, mining, oil or gas, will help African countries to depend less on imports and to have more stability in the face of volatility in oil and gas prices.
The other booming sector is the food industry. Africa has several well-known exporters, but it is increasingly technology-based, which makes things more efficient and sophisticated, enabling exports with less loss.
And finally, tourism, which has taken a huge hit during the pandemic. North African countries are known to attract a lot of tourists, and I think that will continue. It is in full expansion, with many projects and investments planned for the next few years.
I see a lot of international companies establishing regional headquarters – or their hubs to target Africa – in Morocco and Egypt. And what is interesting about Egypt is that it acts as a bridge between North Africa, Africa in general, and the Middle East.
You have a lot of investments from the United Arab Emirates and Saudi Arabia in Egypt and many partnerships. After COP27, I think they will have some success in the next few years as the country becomes more stable and they focus on rebuilding the economy.
I think reducing risk in Africa is basically about digitizing and making things electronic as much as possible. I think that’s a positive side of the pandemic; he accelerated this process, and something that could have taken 10 years, he did it in two or three.
Also corporate governance, compliance and transparency. We get a lot of requests for help in this regard and I think it will continue to help promote more foreign investment and foreign capital.
Given what has happened to Russia, with many companies going out of business, I think maintaining political stability – showing that countries can have good relations and behave in a civilized way – will be the key to the future of the North African region.
Listen to the full interview on our podcast Update on North Africa with Amine Antari, Head of Middle East, Kroll.