New French investors will probably stay away from South Africa until the country’s power and logistics crises are over, the French government believes.

But Paris was hopeful that with help from France and other international partners, South Africa would bounce back to become a “greener economic powerhouse”, said Olivier Becht, France’s minister for foreign trade, attractiveness and French nationals abroad.

He was speaking after a recent visit to South Africa where he met his counterpart, Ebrahim Patel, the CEOs of top French companies and other entrepreneurs in South Africa and leaders of the “vibrant French community”.

“I am also responsible for French citizens abroad, and as such have met fellow countrymen and women in Gauteng and the Western Cape and understand how they feel and what their concerns are,” he said in an email interview.

“We have a French community in Johannesburg and Cape Town that is fully invested in local life and actively involved in the South African economy.”

Becht said he visited South Africa because it is France’s most important trading partner in sub-Saharan Africa. Nearly 500 French companies operate in SA, including all the major ones, employing more than 60,000 people, mostly South Africans, he said.

“In every single economic sector, from infrastructure building to tourism, they are offering South Africans our very best solutions and products. We are the 12th-largest investor in the country. Our intentions are to keep growing this relationship.

“French companies are as keen as ever to flap their wings in South Africa, but at the moment we can see that they are thinking twice, especially those not yet present in the country. 

“As you are very well aware, logistics and power supply, key components of most businesses’ investment cases, are not looking too favourable at the moment. So that is keeping a few companies away from the South African market.  

“For all companies, it is not great news when you have power cuts and can’t find a solution to move or deliver your goods. Same for the French ones present in South Africa. They have had to dedicate most of their investment budget to secure private power supplies, which in turn cannot be invested in maintenance or innovation.  

“Finally, regarding companies not yet present here, as I said, they are cautious and will probably sit the current crises out before investing in the country.”

‘Very hopeful’

Nevertheless, Becht said, “We are very hopeful that South Africa will bounce back from this temporary slump and, with all the funds being made available by France and other partners for the Just Energy Transition, will quickly become a greener economic powerhouse.”

Becht was referring to the Just Energy Transition Partnership through which France, Germany, the European Union, the UK and the US are providing South Africa with $8.5-billion of financing to help it transition away from coal-fired electricity production towards renewables while preserving the livelihoods of coal miners and communities. 

He noted that French companies were also helping through investment in South African renewables as well as water and waste management. “They are very keen to grow and are on the lookout for more opportunities, like we saw recently when EDF won three tenders to provide batteries in the Northern Cape in order to stabilise the grid.  

“We are convinced that our solutions in infrastructure are the best in the world. Be it water treatment, sanitation and waste management, renewable energies and nuclear power, passenger and freight transportation, we can boast of the most efficient and advanced technologies and solutions. Everywhere across the world, Veolia, RATP, EDF, etc … are famous brands, and deservedly so. 

“Their job now, and also mine, is to make sure that South Africans can benefit from these solutions on a bigger scale. They are very keen to position themselves for tenders or, even more efficiently, to help co-design the solutions that municipalities or provinces need.”

Becht visited Nigeria in late November and Mauritius and the French Indian Ocean island Réunion just before coming to South Africa in December.  

“I also wanted to rectify the idea that France’s influence may be in decline in Africa. I also wanted to underline how France is involved economically in Africa.”

The perception of France’s declining influence in Africa has been created by its recent setbacks in west Africa where military juntas in Mali and Niger forced Paris to withdraw the troops it had deployed to help those countries fight Islamist insurgencies. Paris also terminated its military cooperation agreement with the military junta in Burkina Faso. 

As Becht indicated, France is now shifting its focus to economic relations with the continent. 

“There are an increasing number of French companies in Africa. In fact, their number has doubled in the last 10 years, reaching 4,000 today,” he said. 

“Similarly, French foreign direct investment has almost trebled over the last decade. It now stands at €54-billion (R1.1-trillion).”

Major gateway

Becht said France still saw South Africa as a major gateway to Africa. 

“There are many French companies operating in Africa from a South African base. To name but a couple, Pernod-Ricard and Moët et Chandon, for example, where the South African office is also the African HQ.”

France’s most important economic ties with Africa as a whole are in Morocco, Algeria, Tunisia and Egypt, while its strongest economic relations in sub-Saharan Africa are with South Africa, Nigeria, Angola and Ivory Coast, he said. 

“From my point of view, we are blessed with three things:

1. International companies who are willing to invest in Africa;
2. French talents keen to discover Africa; and
3. Open and favourable trade conditions.

“Finally, as President [Emmanuel] Macron said in his 27 February speech about the relations between France and its African partners, we are convinced that Africa will play a big part in our future, that is why we are here and keep investing.”

In this major speech on France’s Africa policy before departing on a visit to Gabon, Angola, Republic of Congo and the Democratic Republic of Congo. Macron said he would not allow France to become “the ideal scapegoat” for the Islamist surge in west Africa. Nor would France be drawn into an “outdated” competition between powers for control of Africa.

Becht said France saw opportunities in the launch of the African Continental Free Trade Agreement (AfCFTA) and was not perturbed by the long time it seemed to be taking to get off the ground. 

“We would like to see the AfCFTA operational as soon as possible. I think it will be good for continental growth and France and the EU stand to benefit from it.

“We are helping. The EU has set up a technical assistance facility that the AU [African Union] and the AfCFTA Secretariat can tap into. Expertise France is one of the implementing agencies of the facility.

“Is it really taking a long time? Remember, the six founding member states of the European Union took 10 years to establish an internal trade region, after the creation of the European Community in 1957.”

The AfCFTA would encourage French and other companies to invest in Africa, “just like the EU internal market and customs union has attracted more foreign investments, including into France”.

He would not be drawn on which African countries were most likely to attract this new French investment. “I’d rather remind you what we put in place in Europe alongside the single market: connections between countries, to facilitate trade.”

Daily Maverick asked Becht if, as minister of “attractiveness”, he was trying to boost the very low levels of South African and other African investment into France. 

“You are right. South African businesses, barring a few notable exceptions, are not very active in France, for two main reasons:

1. The euro-rand exchange rate is not very favourable, and investments are therefore very costly; and
2. They are mostly focusing on Africa, where their comparative advantage is higher.

“Business France is our state agency dedicated to promoting ‘attractiveness’. We are hosting events to boost investment and remain very active in identifying investment opportunities for South African businesses in France. 

“I would like there to be more South African and African investments in France. Reciprocity means the relationship benefits both parties, and that is what we want in our ties with South Africa and other African countries.

“I recently launched a new ‘France Brand’, ‘Make It Iconic’, as part of our efforts to attract foreign investment, including from Africa. We are advertising France here — and you can see the ads in Johannesburg, Pretoria and Cape Town if you drive on the main roads.”

Daily Maverick asked Becht if the different views held by South Africa and France on Russia’s war against Ukraine and also, perhaps, the war between Israel and Hamas, had affected South Africa-France relations. 

“Diplomacy can be a topic of disagreement between partners. It makes dialogue all the more important. And we have a regular dialogue with South Africa, at a ministerial level. Our minister of Europe and foreign affairs was here last June.

“On Russia’s aggression in Ukraine, and on the conflict between Israel and Hamas, the French position is clear: we support Ukraine’s sovereignty, independence and territorial integrity; we call for an immediate and durable truce leading to a lasting ceasefire in Gaza.” DM