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Morocco, a country to favor for French exporters

The additional demand to France from Africa will amount to 1.4 billion euros this year. An opportunity to seize for the tricolor companies, especially as this rebound comes after three consecutive years of contractions of French exports to Africa. Morocco, alone, accounts for nearly 30% of Africa’s additional demand, according to Euler Hermes. “Which countries should be favored for French exporters? The first is the Morocco that will offer French companies +0.4 billion euros of additional demand to seize, “says the world specialist in credit insurance, during a new study on export prospects French in Africa.

“Vigilance is needed, however, as insolvencies are expected to grow by +7% in Morocco this year,” he said. The other two countries with potential for French exporters are Egypt (+0.3 billion euros) and Algeria (+0.2 billion euros). “Three sectors have a real shot to play this year in Africa. The first is agrifood, with +0.75 billion euros of demand to seize in Africa for companies in the sector. The drought experienced by the continent forces it to import more food than usual. Next come electrical equipment (+ € 0.3 billion) and aeronautics (+ € 0.15 billion),” explains Stéphane Colliac, Euler Hermes’ Africa expert economist.

Note that in its latest study on Africa, Euler Hermes takes stock of the situation of the CFA Franc and the two zones in which this currency is used: the West African Economic and Monetary Union (UEMOA) and the Economic Community Central African Monetary Fund (CEMAC). “In 2014, the fall in the price of raw materials revealed some vulnerabilities of the CFA franc. Nevertheless, this currency is not in a situation as difficult as in 1994, when it had been devalued by -50% in its two zones of use. While differences are emerging between the members of these unions, it is time for moderate optimism about the stability of the CFA Franc,” say experts in Euler Hermes.

By region, the CEMAC zone is under pressure. According to Euler Hermes, intra-zone trade in value represents $ 200 million less than it should be in terms of the existing trade conditions in the area: borders, language and common currency. “The currency is overvalued in the region, mainly because of the decline in the price of oil. This led to an increase in public debt and a fall in foreign exchange reserves. Despite these weaknesses, a break-up of the zone or a devaluation of the CFA Franc within five years seems unlikely,” he said. “However, if the price of oil fell permanently to $ 30/barrel, then CEMAC would be forced to devalue the CFA Franc, but the area would always remain united,” say economists Euler Hermes. In their eyes, however, the UEMOA zone is under control. “The public debt has increased, but remains manageable, the price of the CFA franc does not seem overvalued, and the foreign exchange reserves are adequate. However, member countries are not taking full advantage of monetary union,” says the credit insurer.

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