By Jide Akinsemoyin
On 27th November 2024, the Nigerian President, Bola Ahmed Tinubu, departed Abuja for a three-day state visit to France at the invitation of French President Emmanuel Macron. The visit is intended “to strengthen political, economic, and cultural ties between Nigeria and France, with an emphasis on building partnerships in key sectors”. However, behind all the diplomatic platitudes and communiques, why is it in France’s interest to invite President Tinubu on a state visit at this time? The answer lies in France’s current economic health.
- According to figures from the French National Institute of Statistics and Economic Studies (INSEE), French public debt reached a new high of €3.228 trillion, or 112% of GDP, as of June 2024. This is 52% more than the European Union’s limit of 60% for member states.
- To lower public debt the government will need to reduce public expenditure. Currently, France has the highest public expenditure relative to GDP amongst OECD countries. This spending is driven by generous social welfare programs, healthcare and education costs, which are not covered by tax receipts.
- In October 2024, the French government delivered its 2025 budget, which included €60 billion worth of spending cuts and tax hikes on the wealthy and big companies, to reduce public expenditure and tackle a spiralling fiscal deficit.
- In October 2024, Moody’s downgraded France’s credit-rating outlook from stable to negative citing “increasing risk” over the country’s debt and budget deficit and opening the door to a potential credit rating cut.
- On Thursday, borrowing costs for France, historically part of the safe Eurozone core, hit a 12 year high relative to Germany, rising briefly above even Greece, which had once been classified as non-investable during the European debt crisis approximately 12 years ago.
As French influence in Francophone Africa wanes, the country is turning to Anglophone Africa, specifically Nigeria (which according to a United States Institute for Peace report, accounts for approximately 65% of West Africa’s GDP), to further its interests in the region.
This month, Chad ended its defence co-operation pact with France, whilst Senegalese President Bassirou Diomaye Faye told French state TV that “it was inappropriate for French troops to maintain a presence in his country.” Mali, Burkina Faso and Niger have already ended military co-operation with France, following a wave of military coups and anti-French sentiment in these countries.
So, what are France’s interests in Africa? France’s interests in Africa are driven by the same commercial and economic factors that motivated it to become one of the biggest colonial powers on the continent. This implies that the real reason behind the security arrangements it made with its former colonies, was for the protection of its own economic and commercial interests in these countries. At a time when the French government needs cash to balance its books, it is now looking to Nigeria as a replacement for its lost economic and commercial interests in Francophone Africa.
Nigeria needs to attract the type of Foreign Direct Investment (FDI) that spurs inclusive economic growth and massive job creation in the country. In the World Bank’s Nigeria Development Update of 2023, it was reported that “sluggish growth and rising inflation have increased poverty from 40 percent in 2018 to 46 percent in 2023, pushing an additional 24 million people below the national poverty line”. This trend needs to be reversed.
France’s track record in Africa, like other European colonisers, has been largely exploitative in nature. The Colonial pact, a system of laws and regulations that was imposed by the colonisers on their colonies (aimed at ensuring that the colony would exist for the economic betterment of the coloniser rather than the colony), created a legal mechanism under which France could continue to play a controlling role in the political and economic life of its former colonies after independence. This was the rationale behind the creation of the CFA franc. It was only in May 2020 that the existence of the 75-year-old currency came to a close with the ratification of the law officially ending it. This also heralded the end of the financial arrangement with France whereby its former colonies were required to store 50% of all their foreign exchange reserves in an “operational account” at the Bank of France, in exchange for using the currency. In 2019, former Italian deputy prime minister Luigi Di Maio accused France of using this financial arrangement to fund French public debt payments.
A report issued in 2020 by the United Nations Conference on Trade and Development (UNCTAD) cited a figure of $89 billion, equivalent to 3.7% of Africa’s GDP, “lost to Africa annually through various forms of corrupt practices by Western multinational companies that do business in Africa.” Another report, this time by Oxfam in 2015, warns that the continent was “cheated out of US$11 billion in 2010 through just one of the tricks used by multinational companies to reduce tax bills”. Included in this group would be many of the French multinationals that are looking to benefit today from the state visit by the Nigerian president.
The French governments interest in boosting revenue through tax receipts from its multinational companies, should be viewed by Nigeria, from within the context of France’s historical relationship with Africa, its relationship with Francophone Africa now, and most importantly, the current precarious state of French finances. Nigeria’s interests, which should be inclusive economic growth and job creation, represents the price France must pay in exchange for equilibrium to be reached in the interests of both countries. France’s current economic problems at home and its political problems in Africa, places Nigeria in an advantageous position when it comes to negotiating the terms upon which such an equilibrium will be based.
