MEDI1TV Afrique : BAD : 50M € pour la promotion du commerce africain, le point avec Youssef Guerraoui Filali - 10/12/2024
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00:00Hello ladies and gentlemen, and welcome to Focus & Co.
00:11Strengthening the financing of the private sector, promoting African trade,
00:17this is the objective of the 50 million euro sharing agreement signed with the African Development Bank.
00:25This agreement will further support local banks in their international operations
00:31by allowing them to increase their financing lines.
00:34It will also allow to finance on a larger scale businesses in the agricultural,
00:41pharmaceutical, automobile, transport and telecommunications sectors.
00:46This partnership aims to generate nearly 200 million euros of trade
00:52in favour of SMEs operating in Africa, and we are talking about this today with you, Mr. Youssef Graoui.
00:58You are an economist, it is a pleasure to have you with us.
01:01Thank you, Madam, for the invitation.
01:03So, a risk-sharing agreement that will facilitate access to financing for African SMEs, what is at stake?
01:11Indeed, today, when we see the African entrepreneurial fabric,
01:15it is a fabric that, of course, seeks to mobilize funds on the African continent.
01:20This type of financing is a financing that is important.
01:24We are already on a risk-sharing between the private sector and the African Development Bank.
01:28We are looking to mobilize around 50 million euros,
01:32and the objective, of course, is to make this financing a lever on African continental trade,
01:39which can reach up to 200 million euros.
01:43This type of operation is a very important operation,
01:47and we hope that this financing will not be the only financing
01:52that will be made within the framework of this financing dynamic for African companies.
01:55We hope that it continues in this direction, with financing facilities,
02:01with, of course, a certain flexibility.
02:03It is very much in demand today, because when we make declarations of this kind,
02:10when we sign agreements, people remain very observant.
02:15They wait for the financing, and then, when we get to the final phase,
02:19we make the financing file, we start to see the guarantees,
02:22where the risk-taking does not follow.
02:24So, unfortunately, people do not benefit from the announced financing.
02:27So, the goal is to facilitate access to financing for African companies,
02:31and, of course, this facilitation must be translated by a rapid processing of the files,
02:37an in-the-box financing that is done quickly, within 48 hours,
02:42and the memorandum, possibly, or the agreement of the convention,
02:45he talked about risk-sharing.
02:46I hope that this risk-sharing will be the subject of a financing facilitation
02:50and a rapid processing of the files,
02:52so that these African companies, of course, can benefit from the financing.
02:56In any case, when we talk today about SMEs,
02:58we know that the major challenge is financing for these small companies.
03:04It is the challenge, it is the challenge.
03:05This is why there are often failures.
03:07It is precisely because capital is not important enough.
03:11So, what is the perspective of financing these small companies?
03:17What perspective does this open up, especially on the African continent?
03:22Absolutely.
03:22When we look at the rolling funds of African companies in general,
03:27when we are on an entrepreneurial fabric composed of very small companies,
03:32we are on an average of 50 employees,
03:35a maximum annual turnover that can reach 10 million dirhams,
03:41if we take the case of Morocco,
03:43we see that these are companies that cannot invest in their investment cycle,
03:48and these are companies, of course, that cannot increase their profitability
03:53and, consequently, have an operating result,
03:57an industrial transformation cycle of their production, which is important,
04:00because they have to invest.
04:02They have to invest in transformation locations, in development,
04:05they have to invest in machines, in production equipment,
04:08they also have to invest in people through qualified technical training.
04:12All of this requires financing.
04:15And I think that the risk-taking by the funders,
04:20or by the financial and banking institutions,
04:23must be more flexible on the African continent.
04:26When we look at what is happening in Europe,
04:28when we look at what is happening in the Silicon Valley, in America,
04:31we know that companies are taking risks to finance and develop a strong entrepreneurial fabric
04:38that is composed of start-ups, companies,
04:40with very high added value and, consequently,
04:42companies with very high potential for growth.
04:45So that's what we need today,
04:47this risk-taking by the financial and banking institutions,
04:50which must, in a way, assume the grant, of course, of the funds,
04:54and also play the role of a supporter.
04:56A risk-taking today that is necessary for the development of the entrepreneurial fabric.
05:00Which is absolutely necessary, Madam, but it's just the beginning.
05:04Why is it just the beginning?
05:05Because it's not enough to give the funding to the company and let it deliver on its own.
05:09There needs to be a support, a technical assistance,
05:13for a better mobilization and use of the funds.
05:16We have to ensure that the funds are elements of money
05:21that will allow us to have a return on investment.
05:23That is, we will support them in the business plan,
05:26in the profitability study,
05:28and we will ensure the recovery time of the capital invested.
05:31This is very important, because when we invest,
05:34we have a profitability study, we make a margin,
05:37and we get, after four or five years at most,
05:40to recover all the capital invested,
05:42which was, of course, given to us as part of a bank loan.
05:47That means that you are a performing SME
05:50who is involved in the investment, in the reinvestment,
05:54and who generates added value.
05:55And who can grow.
05:56And who can, of course, expand and grow.
05:59That's where the problem is,
06:01and that's what's missing in this SMEs value chain.
06:04Unfortunately, even entrepreneurs fail.
06:07So I talk to, I exchange, I sometimes accompany entrepreneurs, project bearers,
06:12and the biggest piece of advice I give them is
06:14not to focus solely on funding.
06:16Yes, it is necessary to have funding.
06:18We need to have our own funds to finance the start of the project,
06:22to invest in the investment cycle, but be careful.
06:25You have to stay focused on profitability,
06:27focused on economic projects,
06:30focused on opening up to the market,
06:33customer portfolio, access to orders,
06:35the amount of business acquired,
06:37and not the amount of business invoiced.
06:39Because sometimes we are in sectors where we are very poorly paid.
06:42Because even the delay in payments today
06:44is a cause for companies to fail.
06:46And there is work on this, on payment delays.
06:48It should normally be sorted out by now,
06:50at least in the coming months.
06:50We hope so, but I hope we will have the opportunity
06:53to talk about it in the context of our show.
06:54Because I have a lot of comments on this.
06:56And these are practical cases.
06:58We work with companies in Casablanca, Tangier, Quito, and Nicaragua.
07:02I have practical things to share with you.
07:04I hope we will do it in the context of our show, Madam.
07:06With pleasure.
07:07Absolutely.
07:08Let's go back to our time, if you allow me, quickly.
07:10So, the amount of business acquired,
07:12the order book,
07:14access to the public market,
07:16a solid customer portfolio,
07:18that's what it's all about.
07:20These are things that will add up
07:22to the main need, which is financing.
07:26And to stay on the African continent,
07:28if we were to make the state of affairs
07:30of the Moroccan SMEs,
07:32installed in Africa.
07:34So, indeed...
07:36How are Moroccan companies today?
07:38So, when we look at the pioneering sectors,
07:40such as the banking sector,
07:42the pharmaceutical sector,
07:44the energy sector,
07:46we notice that...
07:48Insurance too, and banks.
07:50As I said at the beginning,
07:52we are on a category of medium-sized companies,
07:54family businesses,
07:56large companies,
07:58international investment companies,
08:00which consider the African continent as an investment fund.
08:02As a result,
08:04these are companies that are developing in Africa.
08:06We see them in Cameroon, Côte d'Ivoire, etc.
08:08Telecommunications too.
08:10Absolutely. The telecommunications sector
08:12must not be forgotten.
08:14But when we take
08:16the Moroccan entrepreneurial fabric,
08:18these are small, very small companies
08:20that make the BTP,
08:22that make textiles,
08:24that do transport activities,
08:26that do agricultural activities.
08:28Unfortunately, these are companies
08:30that are experiencing financial difficulties
08:32that are linked to the rolling stock fund,
08:34that are linked to liquidity,
08:36to the transformation of the credits
08:38and the turnover in liquidity.
08:40So, they suffer to be paid.
08:42You are talking about Morocco.
08:44Absolutely. These are companies
08:46that operate in Morocco
08:48and therefore do not have
08:50a chance to develop in Africa.
08:52So, the fund is rare.
08:54To be frank with you,
08:56these are companies that are not present
08:58on the African continent.
09:00It is normal, because when we are on a critical scale
09:02and we have problems at the national level,
09:04this does not allow us to open up
09:06and to invest in other countries.
09:08So, to make expansion on the African continent,
09:10the very small company
09:12must already be a stable PME
09:14that operates with profitability,
09:16with its solvency,
09:18a company that has its financial sovereignty
09:20and it is a company, of course,
09:22that is liquid,
09:24that transforms its turnover
09:26into money.
09:28When we reach this level
09:30of financial performance,
09:32the entrepreneur
09:34will start to think of Africa.
09:36And the African continent,
09:38Sub-Saharan Africa,
09:40is a breeding ground for growth and productivity.
09:42You know?
09:44Absolutely.
09:46More than 60% of Sub-Saharan Africa
09:48is an Africa without infrastructure.
09:50These are countries that are very demanding
09:52in terms of telecommunications,
09:54in terms of energy, in terms of services,
09:56in terms of agriculture,
09:58in terms of transformation industries.
10:00So, the installation in Sub-Saharan Africa
10:02for Morocco, indeed,
10:04would only be beneficial.
10:06But, consequently,
10:08the Moroccan entrepreneurial tool
10:10would be beneficial,
10:12contrary to the medium-sized companies
10:14that are already doing it.
10:16But with funding,
10:18this growth of small Moroccan companies
10:20can be boosted
10:22so that they can open up
10:24on the continent.
10:26Indeed.
10:28It is true that the condition
10:30in Senegal remains the funding,
10:32but a successful funding.
10:34As I explained earlier,
10:36a funding that will result
10:38in profitability,
10:40that will enable to realize
10:42the forecasted turnover,
10:44the forecasted result
10:46that can be predicted
10:48in the context of a project profitability study.
10:50A funding that results,
10:52an effective funding, indeed,
10:54can enable
10:56Moroccan entrepreneurial tools,
10:58in this case, small, very small companies,
11:00to develop in Africa.
11:02Now, if you allow me, dear Madam,
11:04the sectors that bear growth deposits
11:06in Africa,
11:08you have distribution,
11:10you have food,
11:12you have energy,
11:14you have all the projects revolving around water,
11:16we know the current hydric stress,
11:18all the projects revolving around health,
11:20pharmaceutical products.
11:22So, a multitude of sectors
11:24today, including
11:26Moroccan companies,
11:28can easily boost their turnover
11:30in exports and work, of course,
11:32on the African continent.
11:34Which exist today, by the way.
11:36Which exist, by the way, compared to
11:38large companies. And if you allow me,
11:40there are two elements.
11:42So, either small Moroccan companies
11:44that will do export activities in Africa,
11:46that's easier,
11:48or implementations,
11:50that is to say, create subsidiaries,
11:52and create Moroccan holding companies,
11:54Moroccan entrepreneurial tools,
11:56that will settle in sub-Saharan countries
11:58and, consequently, make territorial development.
12:00That too is a way,
12:02more complicated,
12:04and the Moroccan entrepreneurial tools
12:06must be prepared.
12:08More complicated, but it will allow,
12:10in any case, to strengthen
12:12the growth of these small companies,
12:14especially on the African continent,
12:16but also at the international level,
12:18and open up to the international market.
12:20Absolutely.
12:22There are prerequisites for this,
12:24which you have explained very well.
12:26To conclude, if we were to talk about
12:28this African free trade zone,
12:30which is an accelerator
12:32for the industrialization of these companies
12:34in Africa, in general,
12:36but also Moroccan companies
12:38operating on the continent,
12:40remembering that
12:42intra-African trade
12:44is around 15%,
12:46it represents about 15%,
12:48which is a too low figure,
12:50and could evolve.
12:52Absolutely.
12:54The figure you have advanced
12:56explains the current situation.
12:58When we are at 15%
13:00intra-African companies,
13:02it means that
13:04the African entrepreneurial fabric
13:06does not yet find its place
13:08in these free trade agreements.
13:10And that there is a lack of profit,
13:12which is important.
13:14Absolutely, which is important,
13:16and that there are also
13:18productivity and growth deposits
13:20that are very important
13:22and that will have to be exploited
13:24to triple the figure.
13:26So, normally,
13:28these free trade agreements
13:30should play the role
13:32of a lever
13:34of development,
13:36of expansion
13:38of companies in Africa,
13:40and possibly play
13:42a predominant role
13:44in terms of import-export.
13:46We need more import-export flows.
13:48This is not yet the case,
13:50because you have large,
13:52medium-sized companies
13:54but you have a fabric,
13:56if we take the case of Morocco,
13:58which is 95% composed of TPME,
14:00which today does not fit
14:02into these dynamics of free trade
14:04and import-export,
14:06and of course of development
14:08in sub-Saharan Africa.
14:10Thank you, Mr. Youssef Grewi.
14:12I remind you that you are an economist.
14:14Thank you for all these details.
14:16It was a pleasure to have you
14:18with us today.
14:20Thank you very much.