Inside Africa: African Markets Spark Spanish Interest
GUILLEM SARTORIO
The pursuit of African diplomacy has been on the agenda for many major powers in recent history — yet this interest has shown a drastic shift from the usual interest in seeking foreign influence on the continent. Each state strives to bring its own set of interests and expertise, ranging from seeking out business ventures by setting up companies that boost employment and trade opportunities, environmental protection plans, and combating security threats in the Sahel. Africa's partners are continuing to multiply — and it appears that Spain is next on the list of interested parties.
Madrid has been previously known for its ancient colonial possession on the North Coast of the continent, focusing most of its concerns on migration across the Mediterranean. Spanish colonization of Africa was established in the first half of the 20th century following the coined “scramble” for Africa. North Morocco, Ifni, the Tarfaya region, Western Sahara, and the territories of modern-day Equatorial Guinea consisted of what was broadly defined as Spanish claims to the colonial era. The post-colonial era caused the Spanish to step away from the continent in terms of foreign policy interest — yet this appears to be changing.
Africa has become a region of special interest to Spain, as its neighbor to the south poses significant promise for investment. The Spanish Ministry of Industry, Trade and Tourism has developed a commercial and financial strategy entitled “Horizon Africa,” or “Horizonte África,” which hopes to achieve a better position within the region, support internationalization of Spanish companies in the African market, and favor a growing and solid Spanish presence on the African continent.
Entitled the Africa III Plan, this proposal is much more ambitious in nature than previous endeavors, as it’s built around four main objectives: promotion of peace and security, economic growth, consolidation of African institutions, and regulation of migration flows. Even more importantly, there is no time limit on its execution. Spain has quadrupled its aid budget between 2015 and 2019, jumping its foreign investment to nearly €673 million ($798 million).
In order to give a new dynamism to its African policy objectives, the Spanish government has appointed a diplomat on special assignment for the Africa III Plan — Alberto Virella, the previous ambassador to Senegal between 2015 and 2020. This past November, Virella participated in the first Spanish Mesa Africa, a meeting for Spanish civil actors in Africa, to discuss the efforts and resources Spain can exert within the region.
Foreign investment was structured differently this time around, with its allocation around two axes. The first of which is financial, proposing measures related to various internationalization funds such as strengthening concessional financing in sectors of special interest. This also includes introducing changes in the policy of export credit insurance corporations, as well as attempting to strengthen relations with other European bilateral companies to open more bases of operation across the sub-Sahara. The second axis focuses on institutional means, aiming to increase the presence of Spanish economic and trade advisers on the continent by organizing regular missions and strengthening the capacities on the ground.
These strategies come across as ambitious, as resources that are able to be applied to investment still remain modest. To mitigate distribution error and loss, Spanish officials chose to focus specifically on key countries and sectors to distribute specific funding to those that appear the most promising at this time.
The selection process consists of consulting Spanish companies and the economic commercial offices in Africa to evaluate the prospects of different markets, focusing on identifying a series of sectors in each country. For example, energy, water, and sanitation are promising sectors in Côte d’Ivoire, waste management in Senegal, agribusiness in Algeria, rail transport, and electricity generation and distribution in Kenya, Rwanda, Tanzania, and Uganda, and renewable energy and water in Morocco.
Morocco has interestingly played a major role in this new strategy, as its market is of great importance to Spain due to its geographical position — Spanish companies are especially betting on Morocco as the platform for their sub-Saharan emersion. Morocco has acted as Spain’s top trading partner within the continent, their eighth-largest customer in the worst, and received 45.6% of all Spanish exports to Africa in 2019.
In regard to specific projects, the Spanish government has begun negotiations with the European Border and Coast Guard Agency (Frontex), which could involve the cooperation of Senegal and Mauritania, but also seeks to contribute more broadly to the socio-economic development of African states. Official development assistance aid jumped from €104.2 million in 2015 to €672.8 million in 2019.
As a member of the Sahel Alliance since January 2018, Spain has also pledged €85 million ($94 million) towards the international cooperation platform that fosters sustainable development in the region. This financial investment will go toward implementing up to 35 development cooperation projects in the Sahel region.
The current global health crisis has taken a toll to slow down some of Spain’s investment initiatives this past year. “I had a sizable budget for the Africa III Plan this past year, and I spent almost nothing,” says Raimundo Robredo Rubio, the director-general for Africa at the foreign affairs ministry. “For example, we postponed the visit of African mayors to Madrid in the fall and exchange program [for officials] with the African Union.”
However, despite weak growth rates due to the pandemic, the African market still remains highly attractive for Spanish firms in search of new prospects and projects for investment, and promises are still being fulfilled to some extent.
Spain opened an embassy in N’Djamena, Chad this past year, bringing its embassy count in sub-Saharan Africa to 24 — the fourth-largest network for a European state in Africa. Each of its 24 embassies has its own specific series of objectives in order to provide the most effective level of aid and assistance. Dakar, for example, places an emphasis on promoting Spanish culture and language. The spike in Spanish interest proves promising for the African continent, and it will be interesting to see over time how successful its implementation proves to be.