By Irene Lara
Trade relations between Spain and Africa commenced during the 1970s following the return of democracy to Spain. Although there were Spanish companies in Equatorial Guinea prior to the 1970s, Spain focused mostly on its interests in Latin America, and relations with nations in Africa foundered with the wave of independence that swept across that continent during the 1960s and 1970s.
African industries are important for growth across the region and the rest of the world. Africa has abundant resources and is good for manufacturing because it can export raw material to the whole world. However, South Africa, Egypt, Morocco and Tunisia are the only African countries with significant importance in this kind of industry. Foreign investments required to develop investments in Africa are however limited because investors prefer to open their factories in more developed countries such as China or India.
Agriculture is a major industry in Africa and cash crops are cultivated in farms controlled by large corporations. Other resources include gold, oil, minerals and forestry. However, there are still unexplored resources due to a lack of infrastructure and political will.
In recent years Africa’s service sector has been booming with banking and financial services, communication and information technology, and tourism among the most important sectors.
Foreign Direct Investment has increased in Africa since 2000, with South Africa one of the countries most favored for FDI. And flows of investments growth between Africa and the economies of China and India have aroused the commercial interest of the European Union.
In 2000, Spain signed the COTONU Agreement which defined the relationship between Africa and the European Union for the integration of the African countries in the world economy. Besides this, Spain carries out its own private sector initiatives with the Africa Development Bank, in the areas of infrastructure and water.
Current trade between Spain and Africa consists of the import of grains, fruits and flowers from many countries in sub-Saharan Africa, including Mali and Mauritania, and export manufactured products to them.
The EU is Spain’s main trade partner. On one hand, Spain exports motor vehicles, foodstuffs, medicines, machinery and pharmaceuticals. However, 6.2 per cent of Spain exports were to Africa including Morocco, Spain’s main export partner in Africa. On the other hand Algeria and Nigeria are among the top exporters from Africa to Spain: Algeria which is Spain’s main energy partner.
Spain is a specialist in the renewable energy sector. This sector is growing in Southern Africa through entrepreneurs and small businesses investing in this field. Spanish SMEs specializing in renewable energy want to collaborate with African companies to build renewable energy in Southern Africa. Spanish multinational Abengoa is a player in the Xina Solar One, the largest solar energy platform in Africa. Moreover, Gamesa another Spanish company is planning to make the largest wind farm in Africa situated in Tangier, Morocco.
Spanish company Erum-Maroc has a factory in Morocco where hangers for the clothing are manufactured. Its major customers include Carrefour and Inditex, which also has interests in South Africa.
Concerning opportunities for more trade and investments between Spain and Africa, Nigeria has signed agreements with several countries to grow foreign investment partnerships. In 2002, it signed an agreement with Spain that has increased Spanish investments between the two nations across construction, energy, and tourism. Iberia, Ormazábal, Grupo Terratest and Grupo Eurofinsa are other Spanish companies that are investing in Nigeria. Tangier is the hub of Morocco’s economy and is an opportunity for more Spanish trade. Many Spanish companies such as Iberia, Air Europa, Boluda, and Prosolia are situated in Senegal due to its proximity to Spain. Equatorial Guinea also has businesses opportunities in its construction sector, which is arousing interests in Spain.
Commercial relations between Africa and Spain are growing because Africa has much social, economic, and governmental capacity to incite foreign investors. For example, Morocco has adapted its legislation in line with global standards to attract large multinational corporations into its markets.