France’s loss of market share in Africa benefits several European countries, China and India

In 2017, Germany overtook France to become Europe’s leading supplier to the African continent, reports credit insurer Coface, as political risks impacted France’s trading patterns.

While France’s trade balance has remained in surplus, its market share of exports to Africa halved from 11% in 2000, to 5.5% in 2017, according to Coface’s research.

“To a lesser extent, Italy, the UK and the US are following a similar trend in terms of exports to the African continent,” states the insurer, adding: “Unsurprisingly, China has seen a rapid increase in its market share (from 3% in 2001, to around 18% in 2017), followed by India, Turkey and Spain.”

Its key findings are:

• In the machinery sector, France’s portion of exports to Africa halved between 2001 and 2017. As with Italy and Germany, this was due to competition from Turkey, Spain and in particular China, whose share increased eightfold, to reach a quarter of all machinery exports to the African continent. In several of the French-speaking African countries, the fall in France’s market share is striking and has dropped by 15% to 20% in Algeria, Morocco, the Ivory Coast and Cameroon, and by 25% in Senegal.
• In the electrical and electronic appliance sector, France, the leader until 2006, saw its market share fall to 3% in 2017 (16% in 2001). China’s share followed the opposite trajectory, rising from 7%, to reach more than a third of exports to the African continent. France’s market share in French-speaking Africa has fallen by 20%.
• France’s portion of the export market in the pharmaceutical sector almost halved during the same period (from 33% in 2001, to 19% in 2017). At the same time, India’s share of pharmaceutical exports to Africa rose from 5% to 18%. Belgium, Switzerland, Germany and the UK have also gained from France’s export decline to French-speaking Africa.
• In the automotive sector, competition from China and India (now Africa’s fourth-largest supplier in this segment) was particularly marked. France dropped from third position in 2001 to seventh place in 2017 (down from 15% to 5%).
• The decline in France’s market share in sales of wheat (11% in 2017 vs 16% in 2001) was partly due to an extremely poor harvest, but above all to competition from Romania, Ukraine and Russia. Together, these three countries accounted for more than 40% of total wheat exports to Africa in 2017 (compared with only 3% in 2001). Meanwhile, Canada, the US and Argentina made strong progress in Algeria and Senegal.

However, Coface’s analysis indicates that there is a potential gain for French exports to Africa of about 21%, which would allow it to regain a market share equivalent to the pre-crisis levels of 7%.

This is mainly linked to the fact that French export levels are below potential in 27 of the 53 countries analysed, and specifically in east Africa and southern Africa. In certain countries, such as Somalia (-25%), Zimbabwe (-40%) and Sudan (-71%), corporate behaviour has been affected by political risks.