Africa: An Opportunity for Mexican Foreign Policy

Mauricio de Maria y Campos*

Africa: An Opportunity for Mexican Foreign Policy

We appreciate the advice of Mtro. Mauricio de Maria y Campos for the planning of this edition on Africa and the Middle East.

 

LEER EN ESPAÑOL 

 

A PENDING SUBJECT: MEXICO RELATIONS WITH AFRICA

In recent years, many countries have set their eyes on Africa. Why? With a population of over 265 million (2018), it is the third most populated continent in the world and it will soon be the second. It has a long political, economic, social and cultural history, vast natural resources and emerging markets that have whet the appetite of China and India, and revived the interest of old European metropolises.

In the multilateral sphere, the importance of Africa is on the rise. The 55 African countries represent one fourth of votes in the UN General Assembly, hence its decisive weight in any key initiative or vote in multilateral forums. The little Attention Mexico has given Africa and certain strategic countries explains, to a large extent, the recent failed attempts of distinguished fellow nationals in heading multilateral bodies.

According to World Bank predictions, out of the 10 economies that have most grown in 2018, six are in Africa: Ghana (8.3%), Ethiopia (8.2%), Ivory Coast(7.2%), Djibouti(7%), Senegal (6.9%) andTanzania (6.8%); along with India (7.3%), Cambodia (6.9%), Bhutan (6.9%) and the Philippines(6.7%). This trend should be the same in the medium term.Mexico has embassies in only two of them. How much longer will we keep turning our backs on the African continent?

WEAK AND DISCONTINUOUS MEXICO-AFRICA RELATIONS

During the relationship of almost one century with the region, we Mexicans have omitted and been reactive most of the time. We have not managed to discover what we can and want to do with Africa, let alone draw up a consistent and long-term strategy. The exceptions were the administrations of presidents AdolfoLópez Mateos and Luis Echeverría, when diversification policies of our foreign affairs and multilateral presence led to presidential visits and embassies opening. Unfortunately, there was no continuity in those efforts.

Mexico’s previous federal administration did not formulate a strategy for the continent, nor did it deploy significant bilateral and regional cooperation actions. The only official visit was to South Africa and it was due to protocol: Mandela’s funeral. Once again, the opening of the embassy in Angola was announced and we didn’t fulfil it. I would highlight the beginning of operations of a shared embassy with Colombia in Ghana in 2015, within the framework of the Pacific Alliance agreements, as well as the closing of the Angola embassy in Mexico last December, after 20 years of waiting for the reciprocity required.

RECENT PROGRESS IN AFRICA IN POLITICAL AND DEMOCRATIC MATTERS

The democratic process and the political stabilization of Africa has evolved positively since 2000. Conflicts and political tensions in different African countries continue, but they are lesser than in the past. In the last decade, there have been systematic elections in most African countries. In Angola, Sudan, Kenya, Ghana,Ivory Coast,Nigeria; and more recently, important changes guaranteed by concurrent electoral processes have taken place in Zimbabwe and South Africa.

RECENT ECONOMIC ADVANCES OF AFRICA

In the last 17 years, Africa has surpassed regional and international expectations in terms of economic growth. From 1999 to date, 28 out of the 55 African countries have grown an average of 4% or more annually, and a select group of 15 countries have exceeded the 7% point. Some, like Angola, Equatorial Guinea and Ethiopia, had annual rates of more than 10% (according to 2016 OECD data).

Between 2000 and2011, Africa’s GDP as a whole surpassed the growth of its population by two percentage points. Between 2000 and 2008, Africa grew on average more than Latin America, thanks to demand and investments form China and the rest of Asia. Since 2012, the negative impacts of the global financial crisis were countered by an improvement in the energy, mining and agricultural sectors; a more appropriate macroeconomic handling; greater financing flows and direct foreign investment (DFI); growing exports to China and other emerging countries, as well as an expanding domestic market.

Clearly, growth rates started from very low GDP and income per capita, and human development indices are still the lowest in the world. However, there is an important group of sub-Saharan countries with significantly high populations, total GDP and GDP per capita, as well as dynamic economies that are very attractive for trade and investment. Depending on its potential, in the west of the continent, Nigeria, Ghana, Ivory Coast and Senegal stand out; in the east, Ethiopia, Kenya, Tanzania, Sudan and Uganda; in the south, Angola, Mozambique, South Africa and Zambia; and in the north, Morocco, Algeria and Egypt, the first two are going through a period of stability and expansion.

Up until 2011, the factor that best explained the high rates in economic growth, the increase in investment and the generation of jobs and foreign exchange in African countries was—like in South America—high demand and the high international price of raw materials. The situation has not been so favorable from 2012 to date, but there is a rebound of price and demand in some primary goods. The tourism sector has also shown positive trends, particularly in the north and south of Africa and in the east coasts of Kenya and Mozambique, including the islands in the Indian Ocean: Mauritius and Madagascar. In recent years, the decrease in European tourism has been compensated by the greater Asian flows, of China in particular.

FOREIGN INVESTMENT AND FLOW OF FOREIGN RESOURCES

Developed economies remain the main source of capital. The United States accounts for 50% of investments in Africa and the European Union 9%. However, since 2000, China, India, Malaysia and other Asian countries, as well as Russia, Brazil, South Korea and Turkey have become important new investors in Africa. So far this century, more than a thousand Chinese companies have established themselves in the continent.

Development banks of China and India, and public funds of European Union development institutions are now important sources of capital for the continent. They already outnumber the World Bank and the African Development Bank. Since 2005, the DFI in Africa is larger than official external development assistance (ODA). If we add portfolio investments and migrant remittances to DFI, we find that, although ODA's total flows increased from 15.5 billion dollars in 2000 to 47.9 billion in 2010, its share of the total external flows fell sharply. The DFI has multiplied by five and, in certain years, by seven with respect to the amounts reached at the beginning of the century. The western and southern African regions received the largest amounts of investment. Since 2006, with the discoveries of oil in Kenya and Tanzania, external resource flows to east Africa are on the rise. During 2006-2015, new mechanisms were introduced in most of the African countries to favor the arrival of the investment.

The most important change is the one that took place at the origin of investments, trade and external credits. The participation of China in the financing of public and private works of the continent in the last 15 years, as well as in its foreign trade, stands out. India, Malaysia, South Korea, Australia and Turkey also do, but to a lesser extent. Some Latin American countries such as Brazil, Argentina, Chile, Colombia and Uruguay have increased the volume of business with the continent.

In that period, according to information from the UNCTAD, China multiplied trade, DFI, long-term credits and aid to Africa. They also increased their physical infrastructure projects, such as roads, railroads, ports and dams on the continent. Although China's presence in Africa is not exempt from criticism, because it is concentrated in the extraction and subsequent exportation of raw materials with little added value locally, there is no doubt that its investments constitute a convenient alternative and at a lower cost than the resources from the World Bank and those of its brother, the African Development Bank.

The presence of Mexico in Africa is reduced. A few companies have made investments in the continent: Cemex in Egypt, Maseca and more recently, Bimbo, with the purchase of Adghai in Morocco, and its entry into South Africa. Others have undertaken significant export programs: Cervecería Modelo, Cuervo Tequila, Vitro and Laboratorios Silanes. There is also an incipient presence of African companies in Mexico: the South African Dimension Data, as well as Moroccan and Egyptian firms. Mexican investors and companies have not been very active, despite the fact that there are important African markets and growing business opportunities.

 

"The little attention Mexico has given Africa and certain strategic countries, explains the recent failed attempts of fellow nationals in heading multilateral bodies."

 

 

CHALLENGES AND OPPORTUNITIES FOR MEXICO

Everything seems to indicate that, in the immediate future, democracy and governability will take hold in Africa; while growth will maintain a positive trend. It is expected that the population of the continent will double, from 1.25 to 2.5 billion. According to the OECD, 13.5% of the world population lives in Africa today and by 2050 this will have increased to at least 20%.

But its future importance is not only economic; they are also relevant as political allies of Mexico in multilateral forums and in the emerging institutional architecture.

Therefore, Mexico must urgently define a medium and long-term strategy towards Africa and increase ties and exchanges at an accelerated pace. Cooperation programs are needed with those countries and regions that, despite registering low levels of relative development, show great potential.

MEXICO EMBASSIES IN AFRICA

Since the 1950s, Mexico has had an erratic diplomatic presence through ambassadors who have resided in 12 African countries at different times. Today, Mexico has eight embassies, almost all of them with a high number of concurrences (see Table 1).

Table 1

Our network is very limited compared to those of other countries. Turkey—with a GDP and foreign trade lower than Mexico—today has 44 embassies in the continent. Its trade volume with the continent reached 16.7 billion dollars in 2016. In the last two decades, it has awarded scholarships to 10 thousand African students, who have become the biggest promoters of their exports.

Regarding Latin American countries, Brazil has 38 embassies, Cuba 30; while Argentina and Ecuador have 11 each. They have all opened offices in the largest and most dynamic countries during the last decade. Mexico is still asleep, concentrated and vulnerable in North America. We also do not have trade promotion offices—except one recently opened in Marrakech—, nor a free trade agreement, even in partial scope.

Mexico must set as a goal of this six-year administration, to open at least 12 embassies in African countries. Angola, Senegal, Ivory Coast and Tanzania are the most urgent candidates because of the size of their populations and markets, their political stability and their strategic location.

The four new embassies should constitute a system of regional pivots to cover politically, economically and culturally a continent of 55 countries, each with one vote in the UN General Assembly and whose citizens require an entry visa to Mexico in an increasingly interdependent global context. The diplomatic presence of Mexico in Africa should meet the following guidelines:

  1. North Africa is well covered with three embassies: Morocco, Algeria and
  2. In west Africa, Mexico is only present in Nigeria and Ghana. It should reopen the embassy in Senegal and establish another one in the Ivory Coast, two thriving countries with good opportunities. There is no Mexican embassy in sub-Saharan French-speaking countries since we closed the embassy in Senegal 25 years ago.
  3. The other region insufficiently served is east Africa, which is today the fastest growing region. We must strengthen Kenya and Ethiopia and reopen the embassy in Tanzania. There is a tradition of relations (Echeverria-Nyerere) with Tanzania, which has 57 million inhabitants, political stability and a rapidly growing market. From there, it could cover Uganda, another dynamic country of 42 million inhabitants.
  4. Finally, in southern Africa—where Brazil has five embassies and Mexico only one, in South Africa, with 10 concurrences—there is an urgent need to pay attention to Angola and Mozambique, two Portuguese-speaking countries on the Atlantic and Indian coasts, where business and cooperation are important.

AFRICA IN MEXICO

There are permanent embassies of eight African countries: Algeria, Ivory Coast, Egypt, the Sahrawi Arab Islamic Republic, Libya, Morocco, Nigeria and South Africa, as well as a representation of Ethiopia. We should look for Kenya, Ethiopia and Ghana to have a permanent ambassador in our country and, in the future, Senegal and Tanzania to do so in reciprocity, when Mexico reopens its embassies in that continent.

 

"But its future importance is not only economic; they are also relevant as political allies of Mexico in multilateral forums and in the emerging institutional architecture."

 

OPPORTUNITIES AND ACTIONS TO STRENGTHEN OUR PRESENCE IN AFRICA

  1. In the next two decades, Africa will be an actor of greater political, economic and cultural weight in the global scene. The continent urgently needs to know that it is important for Mexico and that the relationship would be beneficial for both sides in a complicated global scenario where we share economic, social, environmental, migratory and security challenges. Thus, an adequate policy and work in the multilateral sphere—for many years the main area of interaction and convergence between Mexico and Africa—are key.
  2. Mexico’seconomic and commercial relationship with Africa is insignificant. According to INEGI (National Institute of Statistics and Geography) figures, they represent only 0.3% of total Mexican trade, 0.2% of our exports and 0.4% of our imports. Mexican presence in the continent can and should increase in the next decade. In 2016, Mexico's total exports to Africa totaled only 460 million dollars, while imports totaled 833 million dollars, which translates into a deficit of 373 million dollars. According to the International Trade Center, Mexican exports to Africa are concentrated in four countries: South Africa, Algeria, Egypt and Nigeria, which represent four fifths of the total and include smelting products, automobiles and their parts, electronic equipment and components, and pharmaceutical and chemical products coming mainly from transnational companies established in Mexico. In turn, our imports come from South Africa, Nigeria, Morocco and Egypt and consist mainly of corn, petroleum, liquefied gas and phosphates.
  3. It is possible to significantly increase both investments in the continent and our exports, and explore the possibilities of developing new markets and more stable sources of supply of agricultural and mineral products. A sine qua noncondition will be to provide our embassies with greater resources for promoters and companies to systematically visit key concurrent countries, disseminate updated information about Mexico and identify business opportunities. The private sector has to contribute to promoting Mexico's image and, for its own benefit, create a Mexico-Africa business chamber. The Mexican Arab Chamber of Industry and Commerce already includes 10 African countries; the Mediterranean Arabs. It is necessary to include sub-Saharans, who today offer the best opportunities.
  4. It would be important to organize, during the six-year administration that is just starting, a series of annual visits of the highest possible level to four or five selected African countries, including entrepreneurs and academics.

  5. Our cooperation agency must have a constant flow of financial resources destined to certain African countries with less development and good potential for growth, trade, investments and multilateral cooperation. Likewise, we could encourage the presence of Mexican observers and promoters there—in countries where we do not have embassies—through the United Nations and Bretton Woods system, as Brazil, Turkey and European countries do.

  6. We must review the system of visas for Africans, especially those of entrepreneurs, students and artists who are currently subject to a long process and need prior permit from the National Institute of Migration.

  7. The Mexican government's postgraduate scholarship program (two per country) has been the only permanent element, albeit very modest, that Mexican embassies have arranged for cooperation in Africa. Its effects, however, have been very limited, since in that continent, as in Asia, Spanish is an uncommon language.

  8. Creating a program to teach Spanish, through on-site courses or using a distance education system, would be a good international cultural investment. Outside Morocco and the small oil-producing Equatorial Guinea (the former Fernando Poo), Spanish is an unusual language in Africa.

  9. A program of young Mexican volunteers with the support of the government, companies and academic institutions could also be successful. This has been shown, for example, by Cubans in the sectors of health, sanitation and housing construction. There is a growing number of Mexican university students who work there through NGOs from the United States, Canada, Europe and international organizations. Why not do this with the participation of universities, companies and Mexican NGOs?

  10. Taking advantage of our presence in international development aid agencies, Mexico could create cooperation programs in areas such as agriculture, health, low-income housing, poverty alleviation and energy efficiency; similar to those China, India and Brazil have.

 

*Former UN Director General for Industrial Development; former Mexico ambassador to South Africa and president of the Tepoztlán Víctor Urquidi Center.