Spain extending its reach into Africa

IPS | 21 April 2008

TRADE: Spain Extending Its Reach Into Africa

By Teresa Robins

SEVILLE, Spain, Apr 21 (IPS) — Spain has expanded its presence in Africa by recently signing trade agreements with Egypt and the Democratic Republic of the Congo (DRC). The agreement with Egypt includes regular bilateral summits similar to Spain’s annual meetings with Morocco, Algeria and Tunisia. Both agreements will facilitate the entry of more Spanish companies into Africa.

In the agreement with Egypt, funds are made available for Egyptian companies to purchase Spanish products and services.

King Juan Carlos and Egypt’s president Hosni Mubarak signed a treaty of friendship and cooperation between the two countries, making Spain only the second European country, after Italy, to establish such high level talks with Egypt.

The king, on his third visit to Egypt, was accompanied by a group of more than 80 industrialists representing more than 50 Spanish companies.

In 2006, Spain was eighth on the list of European suppliers to Egypt. It became the third largest investor during the construction of the Union Fenosa liquefied gas plant in the port of Damietta, about 200 km from Cairo.

The treaty, signed in February this year by the foreign minister, Miguel Angel Moratinos, and his Egyptian counterpart, Amhed Abul Gheit, includes principles from similar agreements. These are non-intervention in internal matters, peaceful resolution of disputes and respect for human rights and freedom.

During the visit, Spanish companies from the tourism, renewable energy, infrastructure and business sectors had the opportunity to discuss investment with various cabinet ministers and the Egyptian industry organisation known by its abbreviation FEI. The FEI signed an agreement with the Spanish Confederation of Industrial Organisations (CEOE).

Among the participant companies were CEPSA, Repsol YPF, gasNatural, Union Fenosa, Gamesa Eólica, El Cortes Ingles, Marina D’Or and the bank, Caixa.

The two governments also signed a financial agreement in Cairo in terms of which 250 million euros would be made available. Of this, 170 million euros will be earmarked to finance the acquisition of Spanish goods and services for public and government projects and aid for Spanish companies in Egypt.

The projects will be carried out in the areas of renewable energy, transport infrastructure, communication and information technology, water treatment and management and treatment of solid waste.

Some 20 million euros is available for SMEs to finance the purchase of Spanish products and services by wholly or part-owned Egyptian companies. Ten million euros will be in the form of donations to finance studies promoted by Spanish companies for public and governmental programmes.

Spain’s relationship with the Democratic Republic of Congo (DRC) also received a boost with a recent cooperation agreement signed between Miguel Ángel Moratinos, Spain’s minister of foreign affairs and co-operation and Antipas Mbusu Nyamwisi, the DRC’s minister of foreign affairs.

The agreement is aimed at basic social services and the protection of the human rights of more vulnerable social groups such as children and women, through support for local institutions. In addition to basic health, education and transport needs, there will be collaboration in projects for environmental protection and sustainable development, and scientific and technological research.

It is anticipated that the development of this agreement will begin with the setting up of a combined commission for evaluation, planning and monitoring, which will meet every four years.

Spain has declared the DRC a ‘‘country for special attention’’. Under the Spanish Co-operation Plan 2005-2008 aid has increased considerably, with over 15 million euros being disbursed in 2006.

In addition to this amount, contributions were received from the regional governments of Catalunya and Navarre: 2.5 million euros and 1.23 million euros respectively, much higher than 2004 when just 30,000 euros was invested by the Agencia Española de Cooperación Internacional para el Desarrollo (AECI or Spanish Agency for International Co-operation and Development).

It is hoped that within five years AECI will be able to establish itself in the three regions of the DRC. An office will be opened in Kinshasa to handle the relations between the two countries. Activities will include co-operation projects, food aid, emergency aid and grants to non-governmental organisations.

One of the companies taking part in trade initiatives in the DRC is PROGOSA, a major Spanish company known for their marine port and dry dock management.

The company has signed a consultancy contract with the government of the DRC worth approximately 5 million euros, having competed with French, U.S., Canadian and Belgian companies. With financial support from the World Bank, the contract is more or less guaranteed.

The contract is for an audit of the conditions of the harbours and railway infrastructure in this African country. Because of civil strife, the country’s infrastructure of 5,200 km of railways and eleven ports and terminals along the Congo River are in a very poor state.

After the analysis, PROGOSA will prepare a strategic plan for the improvement of the infrastructure. Then, once the strategic plan is completed, it is hoped that work will commence to improve the ports and railway networks. The DRC has only one seaport, Banana, along its narrow strip of 37 km of coastline on the Atlantic Ocean.

PROGOSA has a network of companies in the countries surrounding the Gulf of Guinea and have increased their investment plans for the port of Lomé, the capital of Togo, where their centre of operations is located. The company is developing a project to construct a third wharf and a new terminal in the area with the Franco-Lebanese container shipping group, CMA-CGM.

With regards to future plans, PROGOSA is preparing to compete for a consultancy contract in Libya similar to that recently awarded to them in the DRC. In addition, the company is bidding for the contract for the privatisation of the port of Bissau, the capital of Guinea-Bissau.

source: IPS