In June, the MCB orchestrated an enlightening Trade Week event in St. Jean. One of the highlights of the week was a dynamic panel discussion focused on “Navigating African Trade Opportunities and Challenges.” Among the distinguished panelists was Etienne Vauchez, a seasoned entrepreneur with a lifelong commitment to the realm of international trade. Etienne is the driving force behind Eexpand, a company that has played a pivotal role in assisting European SMEs in expanding their international business endeavors. Notably, Eexpand has now ventured into the realm of digital solutions for international development, showcasing Etienne’s forward-thinking approach. Additionally, Etienne’s leadership extends to his role as President of OSCI, the French professional federation that unites experts in international trade and provides unwavering support to companies pursuing global growth.
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“I truly believe that the industrialization of Africa is the ultimate game changer,” states Etienne Vauchez, CEO of Eexpand. With a specific focus on West Africa, he shares his unique perspective, having spent a significant amount of time residing in Benin, his wife’s home country. Vauchez observes that Benin, despite its small size, is strategically positioned as a neighbor to Nigeria and other countries facing diverse challenges, yet showing promising signs of industrialization.
Vauchez emphasizes the critical role of industrialization in driving trade growth. He explains, “The majority of trade expansion will arise from the production of industrialized and finished goods. Without a thriving industry, trade growth remains stagnant.” He clarifies that while economic growth can be pursued through various means, sustainable trade development hinges on the presence of a robust industrial sector.
Delving deeper into the dynamics of industrialization, Vauchez points out its origins. He illustrates, “Consumer demand plays a pivotal role. Let’s explore the process of industrialization using air conditioners as an example. Initially, air conditioners are imported to Africa, but over time, maintenance becomes necessary. Eventually, individuals start assembling them by purchasing spare parts from various sources. As this process evolves, people move up the supply chain, gradually producing components of air conditioners. This progression paves the way for the establishment of an air conditioning industry, allowing Africa to shift from a model where 100% of air conditioning systems are imported to a system where some African countries supply the materials. A noteworthy example of this transformation can be seen in Nigeria. Nigeria has progressively built its air conditioning industry by moving up the supply chain. Similarly, Morocco embarked on a journey two decades ago, starting an automobile industry from scratch. Today, they have advanced beyond mere assembly and can manufacture most car elements, including spare parts,” he explains.
This trend of industrialization is not limited to specific sectors, according to him. In numerous industries, Africa’s consumer and B2B markets demand finished goods that can be gradually manufactured on the continent. “This process requires the combination of knowledge, capital, and partnerships to fuel the transformation from import-dependent economies to self-sustaining production centers,” he adds.
Eric Dorchies says it is essential to recognize that the statistics typically only capture formal trade, while informal trade often doubles those figures. “Cotonou, for instance, serves as the largest market in Western Africa and is the continent’s primary importer of rice, particularly for Nigeria. Due to rice import restrictions in Nigeria, smuggling has become prevalent. Thousands of individuals engage in daily smuggling activities using motorcycles, small cars, minibusses, or trucks along uncontrolled roads spanning the 100-kilometer distance between Lagos and the border. Although informal trade is not the ideal form of trade, it highlights the potential for reorganizing trade once regulations and logistics become more favorable. An example of progress can be seen in the trade of gas between Benin and Nigeria. Initially, gas smuggling was rampant due to Nigeria’s subsidies. However, through agreements and alignment of taxes, formal trade has replaced smuggling,” he explains.
“Governments have the ability to transition from informal to formal trade by working together to improve logistics solutions, customs clearance facilities, and financing,” he says. This potential for improvement is especially relevant within regional frameworks, giving the example of ECOWAS, the Western African Free Trade Agreement Area, where borders have sometimes been closed. “It is contradictory to have closed borders within a free trade agreement. Consequently, this type of situation gives rise to numerous challenges. However, the resilience and determination of entrepreneurs and companies to generate profits and expand their businesses are so remarkable that trade continues to thrive, even in the face of closed borders.”