Swiss-African Business Relations - A holistic look at how Swiss-African business relations contribute to the Swiss economy.
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Swiss-African Business Relations Status Quo 2020 Status Quo 2020 Swiss-African Business Relations A holistic look at how Swiss-African business relations contribute to the Swiss economy. Partners
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Swiss-African Business Relations Status Quo 2020
Contents
1. PREFACE 5
Foreword by the Swiss-African Business Circle
2. GLOBAL CONTEXT 7
Challenging environment for global trade and investment
3. SWISS-AFRICAN TRADE RELATIONS 9
Trade in goods 9
Cross-border trade
Top 10 trading par tners in Africa 9
Expor ts from Switzerland to Africa 10
Impor ts from Africa into Switzerland 10
Main impor ted and expor ted products 11
Transit trade / Merchanting
Definition 13
Impor tance of transit trade for Switzerland 13
Revenues from transit trade of sales to Africa 14
Expenditures from transit trade of purchases in Africa 14
Trade in services
Trade in services Switzerland – Africa 15
Expor ts from Switzerland to Africa 16
Impor ts from Africa into Switzerland 17
4. SWISS FOREIGN DIRECT INVESTMENT (FDI) IN AFRICA 18
Swiss FDI stock in Africa 19
Geographical breakdown Swiss FDI stock in Africa 20
Regional developments over the last 10-15 years 21
Swiss FDI flows to Africa 22
Workforce employed by Swiss companies in Africa 24
New investment projects 27
Announced greenfield FDI projects and cross-border M&A 28
5. CONCLUSION 31
3
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Swiss-African Business Relations Status Quo 2020 PREFACE
1
Preface
Encouraged by the positive responses to the first edition of this report,
published in November 2018, we have gone a step further in the collection
and integration of existing data about Swiss-African business relations.
This is in line with the report’s objective to show a more holistic view of
business relations between Switzerland and African countries.
Due to the timing of the release of data from mainly the Swiss National Bank (SNB) as well as the
Swiss Federal Customs Administration and to provide as much up-to-date data as possible, we have
moved the report’s publication date from November to April.
Whilst the structure of this year’s report is based on the 2018 edition, it includes more detailed data
in several sections, from previously consulted sources as well as figures from further publications
and institutions. For example, the SNB now features the Foreign Direct Investment (FDI) statistics of
3 additional African countries (Cameroon, Mauritius and Tanzania), bringing the total of individually
featured African countries to 10. Thanks to the good ongoing collaboration with the SNB, we are also
able to show more detailed unpublished figures on trade in services and transit trade. To complement
the existing macro FDI-figures and as part of our effort to consolidate qualitative information about
Swiss investments in Africa, we have included data from international sources. This includes new
unpublished figures from IBM-Plant Location International (IBM-PLI), which tracks global investment
decisions regarding location at the project level, as well as from the United Nations Conference on
Trade and Development (UNCTAD) on investment announcements and cross-border M&A activities.
In addition to the SNB, we would like to thank our 3 partners Cotecna, KPMG and Swiss Export Risk
Insurance SERV for their renewed financial support of the project.
We hope this second edition provides you, the reader, our stakeholders and the broader Swiss-African
business community with additional insights into Swiss-African business relations. This will ultimately
enrich the debate around doing business on the African continent. We encourage you to share your
thoughts with us and by doing so, contribute to the further development of the publication.
VERENA UTZINGER MICHAEL RHEINEGGER
P R E S I D E N T, S A B C M A N A G I N G D I R E C T O R, S A B C
5
CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020
The potential that is Africa
At a time when economic growth is climbing slowly at best in most regions,
Africa is yet to reach its economic peak. What are the trends supporting Africa’s
development? Where is progress still needed? And how can investors capture
the potential that is Africa?
By Sheel Gill, KPMG Switzerland
With impressive average annual GDP Getting a grip on governance the world an organization operates.
growth of 3.9%, there is much room for Favorable political and economic One way to achieve this is through
growth in Africa, especially considering conditions are known to accentuate M&As.
that around a fifth of the continent’s investment opportunities, while poor
GDP comes from just a few countries corporate governance is a deterrent. Almost a third (32%) of CEOs surveyed
like Kenya, Ethiopia and Morocco. According to KPMG and ACCA’s report for KPMG’s 2019 East Africa CEO
Various trends and developments are Balancing Rules and Flexibility for Survey believe that strategic alliances
supporting Africa on its growth journey. Growth – a study of corporate will be the most important factor for
governance requirements across Africa achieving growth objectives over the
Innovative, industrious and tech- – adequate and effective corporate next three years (prior year: 25%).
savvy governance frameworks are even more While EA CEOs cited valuation motives
Africa has shown itself to be an critical now that Africa has six of the for their increased M&A appetite, they
innovative hub with more potential than twelve fastest-growing economies. The would be better off focusing on the
anyone thought possible. Safaricom’s study of 15 African markets found that value of onboarding innovation. This,
success with M-Pesa is perhaps the two-thirds aligned their corporate coupled with excellent customer
best know example of disruptive governance requirements to more than service, is what will secure them a
innovation that sends ripples around 80% of the OECD’s related principles. leading market position long term.
the world. That Google allows Having adopted the King Code already Foreign investors in Africa are
customers to buy apps using M-Pesa in 1994, South Africa leads in terms of discovering the benefits of teaming up
shows its global reach – and symbolizes corporate governance but is closely with local partners without taking a
the global potential of African followed by Kenya, Mauritius, Nigeria traditional M&A route. Entering into
innovation. and Uganda. Progress is supported by strategic alliances (but not without due
the International Organization for diligence) enables them to secure
Hungry for opportunity, many young Standardization’s efforts to unify access to strategically important
Africans are focusing their energies on sectorial global standards. partners, develop an ecosystem of
technology-based businesses. This is relationships and respond with speed
good news in terms of job creation for Shaping the future… and flexibility to disruption.
the vast number of unemployed. Although Africa is making progress in
Africa’s knowledgeable, versatile and governance, investors still need to To secure sustainable success, both
English-speaking labor market is well identify and address potential risks African and foreign investors in Africa
placed for success in a global economy. thoroughly. Beyond feasibility studies should focus on clear, mutually
According to the WEF, Africa is and market analysis, a positive mindset understood strategic and commercial
expected to have a 1.1-billion strong of change and empowerment can ambitions, a specific alliance business
working-age population by 2034. Not benefit both investors and their host model and a flexible operating model.
only is labor in plentiful supply, but it is country. Many African governments Those who get it right will unleash the
productive and affordable. Volkswagen welcome investors willing to share true power of Africa’s potential.
recently set up an assembly site in knowledge, create employment
Kenya. The German car manufacturer opportunities and shape the country.
The author:
credited Africa’s rapidly growing market
Sheel Gill
for its decision to set up a base in …and sharing success Partner
Kenya. Other manufacturers are likely Remaining relevant and delivering value KPMG Switzerland
to follow suit and can take their pick to shareholders in a disruptive Transaction Services
from a range of African countries with environment continues to be critical for E: sheelgill2@kpmg.com
T : +41 58 249 42 87
suitable conditions. future competitiveness, wherever in
6
FINAL_Advertorial_Africa_EN_020320.indd 2 02.03.2020 15:48:49
Swiss-African Business Relations Status Quo 2020 GLOBAL CONTEXT
2 Global context
Africa’s economy grew by 3.4% in 2019, with a predicted growth of
3.9% in 2020 and 4.1% in 2021, according to the African Development
Bank’s Africa Economic Outlook (January 2020). These forecasts will
certainly be revised, taking into account the economic impact of the
global corona virus crisis. At the publication date of this report, it is still
too early for the release of updated figures, for provisional predictions
made by international and regional organizations see page 32.
Many African countries have been negatively affected by a number of external factors including global
trade tensions and economic protectionism/disintegration (US-China trade war, WTO blockage, Brexit,
etc). Nevertheless, there are a number of signs pointing to the growing importance of Africa as a
global player going forward e.g. the entering into force of the ambitious African Continental Free Trade
Area (AfCFTA) in May 2019.
According to UNCTAD, global foreign direct investment (FDI) flows slid by 13% in 2018 (the third
consecutive annual fall in FDI) and remained flat in 2019. FDI to developed countries decreased by 6%
in 2019 to the lowest level since 2004, following a massive 27% drop in 2018. In contrast, developing
economies captured more than half of the global FDI flows in 2019 and represented half of the
top 10 recipients of FDI in the same year. FDI flows to Africa rose by 11% in 2018 and by 3% in 2019
(flows of 49 bn USD in 2019; 3.5% of global FDI).
Although Africa has not been a focus of the US-China trade war, the continent has been indirectly
affected. For instance, US tariffs have contributed to drops in commodity prices as well as devaluation
of local currencies. Currency devaluations have in turn directly lead to decreasing profitability of
existing investments. Some currencies, of substantial interest to Swiss companies, devaluated by
between 10% and 50% against the Swiss Franc since 2015 (highest devaluations in Egypt, Nigeria,
Angola, Zambia; followed by Ghana, DR Congo and Ethiopia; most stable currencies: Morocco, Ivory
Coast, Kenya, South Africa and Mauritius). Moreover, the expected economic slowdown in China
will also hinder exports and reduce government revenues for many African economies. The African
Development Bank estimates that the trade tensions could cause a 2.5% reduction in GDP in resource-
intensive African countries and a 1.9% reduction for oil exporters by 2021. The International Monetary
Fund (IMF) has warned that the trade war could cause a 1.5% drop in Africa’s GDP growth by 2021.
7
CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 8
Swiss-African Business Relations Status Quo 2020 TRADE IN GOODS
3
Swiss-African trade relations
Cross-border trade
In 2019, the trade volume between Switzerland and Africa stood at 5.7 bn CHF
(1.3% of global Swiss trade) without gold and at 16.2 bn CHF (2.8% of global
Swiss trade) with gold. Together, the top 7 trading partners - Egypt, South Africa,
Nigeria, Morocco, Libya, Tunisia and Algeria - were responsible for 80% of overall
Swiss-African trade in 2019.
01 02
TOP 10 TRADING PARTNERS / TOP 10 TRADING PARTNERS /
TRADE VOLUME SWITZERLAND- TRADE VOLUME SWITZERLAND-
AFRICA 2019, WITHOUT GOLD AFRICA 2019, WITH GOLD
(5.7 BN CHF) (16.2 BN CHF)
Egypt 22% South Africa 21%
South Africa 17% Ghana 15%
Nigeria 10% Burkina Faso 11%
Morocco 10% Egypt 8%
Libya 7% Mali 8%
Tunisia 7% Ivory Coast 4%
Algeria 7% Morocco 4%
Kenya 3% Senegal 4%
Ghana 2% Nigeria 4%
Ethiopia 2% Mauritania 3%
Others 13% Others 18%
The trade volume without considering gold The trade volume including gold stood at a
amounted to 5.7 bn CHF in 2019 (1.3% of record high of 16.2 bn CHF in 2019 (2.8%
global Swiss trade), a moderate 3% reduction of global Swiss trade), an increase of 14%
compared to the 5.9 bn CHF in 2018 (1.4% of compared to the 14.2 bn CHF in 2018 (2.5%
global Swiss trade). of global Swiss trade).
S O U R C E : S W I S S F E D E R A L C U S T O M S A D M I N I S T R AT I O N 9
TRADE IN GOODS Swiss-African Business Relations Status Quo 2020
EXPORTS FROM IMPORTS FROM
SWITZERLAND TO AFRICA INTO
AFRICA SWITZERLAND
03 04 05
EXPORTS FROM SWITZERLAND IMPORTS FROM AFRICA INTO IMPORTS FROM AFRICA INTO
TO AFRICA 2019 (3.7 BN SWITZERLAND 2019, WITHOUT SWITZERLAND 2019, WITH
CHF, 1.5% OF GLOBAL SWISS GOLD (2.0 BN CHF, 1% OF GOLD (12.4 BN CHF, 4.5% OF
EXPORTS) GLOBAL SWISS IMPORTS) GLOBAL SWISS IMPORTS)
Egypt 32% Nigeria 22% South Africa 23%
South Africa 18% Libya 15% Ghana 20%
Morocco 9% South Africa 14% Burkina Faso 14%
Algeria 9% Morocco 11% Mali 10%
Tunisia 5% Tunisia 10% Ivory Coast 5%
Nigeria 4% Ghana 4% Senegal 5%
Libya 3% Egypt 4% Mauritania 4%
Kenya 2% Kenya 3% Nigeria 4%
Sudan 2% Ethiopia 3% Libya 2%
Uganda 1% Algeria 3% Tanzania 2%
Others 12% Others 12% Others 11%
Total exports from Switzerland to Total imports from Africa into Total imports from Africa into
Africa were relatively stable over the Switzerland (excluding gold) were Switzerland (including gold) stood at
last 10 years, the share of exports to relatively stable over the last 10 a record high of 12.4 bn CHF (4.5% of
Africa compared to the global Swiss years at around 1% of global Swiss global Swiss imports), an increase of 19%
export going down from 2.0% in 2009 imports. Imports from Libya re- compared to 2018, when imports stood
to 1.5% in 2019. Exports to Egypt gained some momentum in 2018 at 10.5 bn CHF (3.8% of global Swiss
increased again by 25% compared to and 2019, but are still far away imports). Imports from South Africa
2018, further strengthening Egypt’s from the 2009 peak (when 40% of more than doubled since 2017. In 2019,
position as the nr. 1 export market for Swiss imports came from Libya). the main 4 source countries of imported
Switzerland on the African continent. gold in Africa were Ghana (2.4 bn CHF),
Exports to South Africa went down South Africa (2.2 bn CHF), Burkina Faso
9% in the same period. (1.7 bn CHF) and Malawi (1.3 bn CHF).
10 S O U R C E : S W I S S F E D E R A L C U S T O M S A D M I N I S T R AT I O NSwiss-African Business Relations Status Quo 2020 CROSS BORDER TRADE IN GOODS
06 2019 MAIN SWISS EXPORTS TO AFRICA
5 5% 1 7% 9% 9% 3%
CHEMICALS AND M A C H I N E RY A G R I C U LT U R E PRECISION VEHICLES
PHARMACEUTICALS PRODUCTS I N S T R U M E N T S,
WAT C H E S A N D
J E W E L RY
2019 MAIN IMPORTS INTO SWITZERLAND
07
(WITHOUT GOLD) FROM AFRICA
3 9% 2 3% 1 5% 1 1% 5%
ENERGY PRODUCTS A G R I C U LT U R E TEXTILES VEHICLES M A C H I N E RY
PRODUCTS
S O U R C E: S W I S S F E D E R A L C U S T O M S A D M I N I S T R AT I O N 11CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 12
Swiss-African Business Relations Status Quo 2020 TRADE IN GOODS
Transit trade / Merchanting
To show a more holistic picture of the real trade in goods
interaction between Switzerland and Africa when looking at
trade in goods figures, it is indispensable to also consider transit
trade figures. For the first time, the SNB provided us with figures
for Northern Africa and the Rest of Africa as well as individual
country data for Egypt, Morocco, Nigeria and South Africa.
Transit trade, also called merchanting, is defined as trade of goods which do not undergo
any transformation between purchase and resale, remain in the ownership of the firm trading
the goods and never cross the firm’s country of residence (Switzerland in this case). In other
words: a merchanting firm purchases goods from a supplier abroad and sells them to a buyer
abroad without the goods entering or leaving Switzerland. A predominant part of the transit
trade happens in the commodities trading space. According to the SNB, over 60% of Swiss
transit trade activities included energy products (61%), followed by stones, earth and metals
(20%) and agricultural products (8%) in 2019. The balance between revenues from the sale
of such goods and the incurred expenses to acquire, store and transport them (net figure) is
reflected as transit trade in the country of residence’s current account balance.
In 2019, net revenues from transit trade in Switzerland amounted to over 37 bn CHF, i.e. about
5.3% of Switzerland’s GDP. Africa’s role in transit trade is highlighted by the fact that 4.2% of
global Swiss revenues from transit trade activities are generated from sales to Africa and
6.2% of global expenses related to transit trade purchases are incurred in Africa.
On an aggregated basis, Swiss-based companies sell 32.6 bn CHF worth of goods to Africa
(including those bought in one African country and sold in another). On the other hand, these
Swiss-based companies purchase 45.6 bn CHF worth of goods in Africa which are sold
globally (excluding Switzerland, also including goods sold in other African countries). It can
therefore be concluded that at a net level, Swiss-based companies contribute to net surplus
revenues (in hard currencies) of 12.9 bn CHF in African countries.
13TRADE IN GOODS Swiss-African Business Relations Status Quo 2020
2019 REVENUES FROM TRANSIT TRADE OF
08 SALES TO AFRICA (32.6 BN CHF, 4.2% OF
GLOBAL SWISS REVENUES FROM TRANSIT
TRADE)
M CHF % of Africa
Northern Africa 9,031 28%
Egypt 3,196 10%
Morocco 1,933 6%
Rest of Africa 23,600 72%
Nigeria 4,012 12%
On a regional level, we can
South Africa 3,230 10% conclude that +/- 25% of
TOTAL 32,631 100% transit trade activities by Swiss
companies in Africa take place
in Northern Africa and +/-75% in
the rest of Africa.
2019 EXPENDITURES FROM TRANSIT TRADE
09 OF PURCHASES IN AFRICA (-45.6 BN CHF, Swiss-based companies sell
6.2% OF GLOBAL SWISS EXPENDITURES FROM goods purchased outside of
TRANSIT TRADE) Switzerland to South Africa
to the value of 3.2 bn CHF. On
the other hand, they purchase
M CHF % of Africa goods in South Africa that are
sold globally to the value of 4.3
Northern Africa -11,121 24%
bn CHF (excluding Switzerland).
Egypt -1,625 4%
Assuming that most of the
Morocco -841 2%
transit trade happens in the
Rest of Africa -34,457 76% commodities trading sector, we
see that in 2019, Swiss-based
Nigeria -9,889 22%
companies helped Nigeria to
South Africa -4,269 9% generate access to a surplus
of over 5.9 bn CHF in hard
TOTAL -45,578 100%
currencies.
S O U R C E : S W I S S N AT I O N A L B A N K
14
S O U R C E : S W I S S N AT I O N A L B A N KSwiss-African Business Relations Status Quo 2020 TRADE IN SERVICES
Trade in services
Global Swiss trade in services (exports + imports) stood at
224.3 bn CHF in 2019, which is equivalent to over half (50.1%)
of the value of Swiss foreign trade in goods (cross-border
trade). Similar to trade in goods, Switzerland generated a
substantial export surplus of 17.5 bn CHF through global trade
in services in 2019.
When looking at Africa, the trade in services volume stood at 3.4 bn CHF in 2019 (1.5%
of global Swiss trade in services), which is also equivalent to 59% of the value of Swiss
foreign trade in goods (excl. gold) with Africa. Swiss trade in services relations with
Africa generated a trade surplus of 1.1 bn CHF in 2019.
Thanks to the SNB, we are now able to show geographical data for Northern Africa and
Rest of Africa for the first time, as with the transit trade data. We are also able to show
individual country data for Egypt, Morocco, Nigeria and South Africa. In addition, the
data now includes tourism which has not been reflected in previous years’ figures.
TRADE IN SERVICES VOLUME SWITZERLAND –
10 AFRICA 2019 (3.4 BN CHF, 1.5% OF GLOBAL SWISS
TRADE IN SERVICES)
M CHF % of Africa
Northern Africa 1,010 30%
Egypt 337 10%
Morocco 263 8%
Rest of Africa 2,373 70%
Nigeria 159 5%
South Africa 783 23%
TOTAL 3,383 100%
More than 50% of the trade in services volume between Switzerland and Africa
is generated with South Africa (23%) and Northern Africa (29%).
S O U R C E: S W I S S N AT I O N A L B A N K 15TRADE IN SERVICES Swiss-African Business Relations Status Quo 2020
EXPORTS FROM SWITZERLAND TO AFRICA
11 2019 (2.3 BN CHF, 1.9% OF GLOBAL SWISS
EXPORTS)
M CHF % of Africa
Northern Africa 707 30%
Egypt 244 10%
Morocco 160 7%
Rest of Africa 1,623 70%
Nigeria 108 5%
South Africa 578 25%
TOTAL 2,330 100%
12 EXPORTS FROM SWITZERLAND TO AFRICA BY TYPE OF SERVICE 2019
Type of service in M CHF % of total
Transport 227 10%
Tourism 227 10%
Insurance and pension services 72 3%
Financial services 639 27%
Licence fees 341 15%
Telecommunications, computer and information services 196 8%
Research and development services 10 0%
Consulting services 120 5%
Technical, trade-related, and other business services 198 8%
Other services1 226 10%
Not specified 74 3%
TOTAL 2,330 100%
1
M A N U FA C T U R I N G S E R V I C E S, M A I N T E N A N C E A N D R E PA I R S E R V I C E S,
C O N S T R U C T I O N S E R V I C E S, P E R S O N A L S E R V I C E S, G O V E R N M E N T S E R V I C E S
The highest source of service export revenues came from: financial services (27%),
license fees (15%) and 10% from transport, tourism and other services respectively.
16 S O U R C E: S W I S S N AT I O N A L B A N KSwiss-African Business Relations Status Quo 2020 TRADE IN SERVICES
IMPORTS FROM AFRICA INTO SWITZERLAND
13 2019 (1.1 BN CHF, 1.0% OF GLOBAL SWISS
EXPORTS)
M CHF % of Africa
Northern Africa 303 29%
Egypt 93 9%
Morocco 103 10%
Rest of Africa 750 71%
Nigeria 51 5%
South Africa 205 19%
TOTAL 1,053 100%
14 IMPORTS FROM AFRICA INTO SWITZERLAND BY TYPE OF SERVICE 2019
Type of service in M CHF % of total
Transport 216 21%
Tourism 137 13%
Insurance and pension services 16 2%
Financial services 34 3%
Licence fees 24 2%
Telecommunications, computer and information services 129 12%
Research and development services 29 3%
Consulting services 123 12%
Technical, trade-related, and other business services 162 15%
Other services1 74 7%
Not specified 109 10%
TOTAL 1,053 100%
1
M A N U FA C T U R I N G S E R V I C E S, M A I N T E N A N C E A N D R E PA I R S E R V I C E S, C O N S T R U C T I O N
S E R V I C E S, P E R S O N A L S E R V I C E S, G O V E R N M E N T S E R V I C E S
The highest expenditures for service imports into Switzerland came from: transport (21%),
technical, trade related and other services (15%), tourism (13%) and 12% from ICT and
consulting services respectively.
S O U R C E: S W I S S N AT I O N A L B A N K 17SWISS FDI IN AFRICA Swiss-African Business Relations Status Quo 2020
4 Swiss Foreign Direct
Investment (FDI) in Africa
As of this year, the SNB has started disclosing individual data for 3 additional
African countries (Cameroon, Mauritius and Tanzania) in its standard FDI
publication, bringing the total of individually displayed countries to 10.
In addition to the 10 countries and in line with our previous report of 2018, we are again able to show the full
data of the following 6 geographical zones (Northern Africa, Sahel, Western Africa, Central Africa, Eastern Africa,
Southern Africa).
NORTHERN AFRICA
Algeria, Egypt, Libya, Morocco, Tunisia
SAHEL
Chad, Mali, Sudan,
Mauritania, Niger
WESTERN AFRICA EASTERN AFRICA
Benin, Burkina Faso, Burundi, Djibouti, Eritrea, Ethiopia
Cabo Verde, Cameroon, Ivory Coast Kenya, Rwanda, Somalia, South
Gambia, Ghana, Guinea, Guinea- Sudan, Tanzania, Uganda
Bissau, Liberia, Nigeria, Senegal,
Sierra Leone, Togo
CENTRAL AFRICA SOUTHERN AFRICA
Angola, Central African Republic, Botswana, Comoros, Lesotho,
Democratic Republic of Congo, Madagascar, Malawi, Mauritius,
Equatorial Guinea, Gabon, Mozambique, Namibia,
Republic of the Congo, São Tomé Seychelles, South Africa,
and Principe Swaziland, Zambia, Zimbabwe
18Swiss-African Business Relations Status Quo 2020 SWISS FDI IN AFRICA
SWISS FDI STOCK TOTAL IN AFRICA
15
In 2018, Swiss FDI stock in Africa stood at 11.3 bn CHF (0.8% of global Swiss FDI).
16,000
14,000
F D I S T O C K (I N B N C H F)
12,000
10,000
8,000
6,000
4,000
2,000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
YEAR
S O U R C E : S W I S S N AT I O N A L B A N K
Behind the Swiss National Bank figures
1. How big is the sample? And what is the return rate factor 2 between the book value of FDI stocks
of the survey? The sample consists of around 1,100 and the “real” value of these stocks.
groups of companies (often several companies per
group). Legal entities and companies are obliged by 4. What are the indirect participations, and what
Swiss law to participate in the survey and supply all are the limits of the applied methodology? For the
necessary information – hence the return rate of the FDI statistics and the breakdown by country, only
survey is close to 100%. subsidiaries directly held by companies in Switzerland
are considered. In other words, if a Swiss-based
2. Which companies are captured in the FDI statistics company invests in country X in Africa, but the
of the Swiss National Bank? What are the selection investment goes via a 3rd country subsidiary, then this
criteria? The direct investment data are taken from the investment does not feature in the FDI stock and flow
SNB’s quarterly and annual surveys on cross-border figures. However, the same investment features in the
capital linkages. These surveys are carried out among workforce statistics from the SNB.
approximately 1,100 companies (groups of companies)
in Switzerland and the Principality of Liechtenstein. 5. Does the sample show the full picture? Given the
Only companies whose group-wide cross-border capital constant monitoring of the corporate landscape by the
stocks exceed CHF 10 million are surveyed. SNB as well as the different sources of information, it is
assumed that the sample is as complete as possible.
3. BOOK VALUE versus MARKET VALUE. It is
important to know that FDI stock figures reflect 6. How many groups of companies have a permanent
book values, whilst FDI flow figures are based on workforce in Africa? Around 160 groups of companies
transaction/market values. As a rule of thumb, there report a permanent workforce in Africa.
are estimations that across sectors one can assume a
19SWISS FDI IN AFRICA Swiss-African Business Relations Status Quo 2020
16
SWISS FDI STOCK IN AFRICA PER GEOGRAPHICAL ZONE
Southern Africa makes up for 74% of the Swiss FDI stock in Africa, followed by Northern Africa (10%), Western
Africa (10%) and Eastern Africa (8%). Swiss investments in the Sahel region as well as in Central Africa are
extremely low, according to SNB statistics. The negative FDI stock in Central Africa can be explained by one or
several credits given by Central Africa-based daughter companies to their Swiss-based mother companies.
2000 2005 2010 2015 2018
% of % of % of % of % of
M CHF M CHF M CHF M CHF M CHF
Africa Africa Africa Africa Africa
Northern Africa 943 21% 875 25% 2746 24% 2499 19% 1182 10%
Egypt 605 13% 537 15% 2,017 17% 1,849 14% 612 5%
Morocco 293 6% 292 8% 640 6% 554 4% 374 3%
Tunisia 44 1% 36 1% 64 1% 44 0% 46 0%
Sahel 229 5% 16 0% 23 0% 54 0% 34 0%
Western Africa 594 13% 208 6% 2718 23% 1338 10% 1099 10%
Cameroon 53 0% 64 1%
Ivory Coast 113 2% 23 1% 517 4% 250 2% 347 3%
Nigeria 15 0% 56 2% 327 3% 594 4% 416 4%
Central Africa -51 -1% 69 2% 237 2% 125 1% -316 -3%
Eastern Africa 164 4% 218 6% 402 3% 609 5% 952 8%
Kenya 555 12% 124 4% 169 1% 282 2% 338 3%
Tanzania 113 1% 176 2%
Southern Africa 2,680 59% 2,123 61% 5,496 47% 8,631 65% 8,377 74%
Mauritius 3,331 25% 1,567 14%
South Africa 1,318 29% 1,835 52% 3,934 34% 2,153 16% 2,597 23%
Total Africa 4,559 100% 3,509 100% 11,622 100% 13,256 100% 11,328 100%
20 S O U R C E: S W I S S N AT I O N A L B A N KSwiss-African Business Relations Status Quo 2020 CROSS BORDER TRADE IN GOODS
Developments over the last 10-15 years by region
N O RT H E R N A F R I C A
The FDI stock has reduced by 60% since its peak of 3 bn CHF 2018, the negative value implying loans from one or several
in 2013 and has returned to levels seen 10 years ago. Since daughter companies in the region given to the mother house
2013, FDI stock in Egypt has decreased by 70% and FDI stock in Switzerland. At its peak in 2013, Swiss FDI stock in Central
in Morocco has decreased by roughly 50%. In the case of Africa stood at 583 m CHF (5% of Swiss FDI stock in Africa),
Egypt, the massive decrease of the FDI stock is mainly based according to the statistics from the SNB. Drawing on our
on re-adjustments of book values of Swiss investments, own research, we believe that the figures for the Democratic
primarily linked to the devaluation of the Egyptian pound in Republic of Congo should be higher than shown in the official
2016 (lost about 50% of its value compared to the Swiss franc) statistics. The same applies to some of the figures for Angola.
and not to major divestments of Swiss companies in Egypt.
EASTERN AFRICA
SAHEL FDI stock in Eastern Africa has gained some momentum in
With a total stock of 34 m CHF, Swiss FDI in the Sahel the last 2-3 years and stood at 953 m CHF in 2018. In the
sub-region remains very low. same year, Kenya and Tanzania were responsible for around
55% of the Swiss FDI stock in the region. According to our
WESTERN AFRICA own research, the biggest Swiss FDI recipient in the region
The share of the Swiss FDI stock in Western Africa remained is Ethiopia (a country which is not included separately in the
stable in recent years at around 10% of total Swiss FDI stock SNB data).
in Africa. In 2018, Nigeria and Ivory Coast were responsible
for 70% of Swiss FDI stock in the sub-region. According to SOUTHERN AFRICA
our own research, the figures for Nigeria should be higher, The latest 2018 figures show that the sub-region is the
especially in view of Swiss investor activity in the oil & gas recipient of 74% of total Swiss FDI in Africa. South Africa
sector. It is however possible that these investments are only still received a bit over 30% of the total share in the region.
indirectly linked to the Swiss-based mother companies and Mauritius, shown individually for the first time in the SNB
therefore do not fully feature in the SNB statistics. figures, is also an important player in the Swiss-African
FDI space. Several countries in Southern Africa are major
CENTRAL AFRICA recipients of Swiss FDI, with at least two other countries
The Swiss FDI stock in the region stood at -316 m CHF in receiving well over 1 bn CHF per country.
S O U R C E: S W I S S N AT I O N A L B A N K 21SWISS FDI IN AFRICA Swiss-African Business Relations Status Quo 2020
17 SWISS FDI FLOWS (IN M CHF) TO AFRICA, 2000-2018
2000 2001 2002 2003 2004 2005 2006 2007 2008
Northern Africa -3 122 64 57 44 359 210 211 259
Egypt 11 82 48 31 28 276 161 141 171
Morocco -30 37 26 34 6 59 34 45 63
Tunisia 17 5 -10 -9 4 6 -5 0 7
Sahel 17 5 -7 0 1 8 -9 4 5
Western Africa 25 33 -161 -21 -68 -254 136 242 65
Cameroon
Ivory Coast -47 -6 -93 4 -16 -2 77 79 3
Nigeria 4 8 1 26 3 -6 19 22 59
Central Africa 1 16 3 37 -70 8 43 14 -4
Eastern Africa 10 5 5 -8 33 31 39 83 22
Kenya 9 4 -1 -2 11 13 20 18 5
Tanzania
Southern Africa 224 -37 -393 -313 -311 1,579 391 1,037 3,450
Mauritius
South Africa 18 54 -238 -243 -72 1,095 431 978 3,739
Total Africa 273 143 -489 -248 -372 1,731 810 1,591 3,797
A closer look at the geographical zones
Since 2000, Africa has received a net inflow of FDI from flow to Egypt in 2015, followed by 2 years of negative flows.
Switzerland amounting to 12.9 bn CHF. 50% of the net flow One possible explanation for this is that the positive flows in
went to South Africa, 7 % to Egypt and Nigeria respectively, 2015 are linked to credits given by Swiss mother companies
and 4% to Ivory Coast. to their Egyptian subsidiaries due to the currency crisis
in Egypt in 2015/2016. Morocco on the other hand, was
For 2017 (-1.4 bn CHF) and 2018 (-388 m CHF) the SNB rather flat with the exception of 2016, which saw a major
reported negative net FDI flows from Switzerland to Africa. divestment of a Swiss financial services company.
The negative value in 2017 was mainly triggered by one or
several large Swiss divestments in relation to Mauritius. SAHEL
According to our own research, 2018 was dominated by one Overall, the figures don’t show much activity on the part of
major mining divestement in South Africa as well as some Swiss companies in this region.
divestments in Central Africa.
WESTERN AFRICA
N O RT H E R N A F R I C A Since 2010, Western Africa has seen a net inflow of Swiss FDI
Egypt and Morocco are the most active countries in terms of amounting to 904 m CHF. Swiss net FDI flows into Nigeria
Swiss FDI flows in the region. There was a major Swiss FDI amounted to 708 m CHF in the period 2010-2018, whilst
22 S O U R C E : S W I S S N AT I O N A L B A N KSwiss-African Business Relations Status Quo 2020 SWISS FDI IN AFRICA
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net inflow
188 261 -94 -86 25 22 507 -592 -104 -43 1,406
51 202 -126 -80 -16 53 502 -409 -112 -71 943
108 58 35 -2 8 -16 -3 -225 -21 15 231
28 10 37 5 -25 3 -15 2 12 13 85
3 7 5 75 -36 44 3 14 5 -18 125
1,081 362 -452 -264 -56 -73 166 224 -29 -55 900
-1 6 22 -11 2 18
114 118 17 38 117 26 -23 60 15 28 509
62 70 31 76 131 -27 235 160 34 -3 906
-22 -19 57 170 107 -17 278 11 15 -498 130
4 -115 71 30 35 45 -85 79 117 45 445
-9 -175 35 15 34 25 -62 4 60 12 16
10 17 5 52 16 100
-335 1,122 1,578 -1,011 1,132 272 2,146 543 -1,391 181 9,864
25 1,671 -376 -1,680 299 -61
-245 127 218 118 221 205 -192 674 -66 -361 6,461
920 1,618 1,166 -1,088 1,207 293 3,016 279 -1,387 -388 12,871
Ivory Coast received net inflows worth 396 m CHF in the EASTERN AFRICA
same period. On the contrary, there were several negative net Net flows into Eastern Africa have been fairly flat. According
flows/divestments since 2010, mainly in countries which are to our own research, there have been a number of smaller
not shown individually. To illustrate this, 6 out of the 9 years investments by Swiss-based companies expanding into
resulted in a net outflow for the region. For example, based on the region, especially into Kenya. Our findings show the FDI
our own research, there were several agribusiness divestments flow figures into Ethiopia, a country which is not featured
in the region by a large Swiss-based agribusiness player. It is individually by SNB, should be higher.
worth emphasizing again that as mentioned earlier, that the
figures for Nigeria should be higher, especially in view of Swiss SOUTHERN AFRICA
investor activity in the Nigerian oil & gas sector. Southern Africa is the most important African sub-region
in terms of Swiss FDI flows. With individual data now also
CENTRAL AFRICA available for Mauritius, a higher percentage of the movements
The SNB data shows positive net flows for Central Africa in Southern Africa can be explained. However, important
amounting to 170 m CHF in 2012, 107 m CHF in 2013, 278 m flows are happening outside of South Africa and Mauritius,
CHF in 2015 and a substantial negative flow of -498 m CHF in the only two countries which are shown individually. As stated
2018. As none of the countries are featured individually, there further up, the region experienced significant divestments in
is little visibility on the sub-region. It is however assumed the last two years, with negative net FDI flows in relations to
that the bulk of the activities are focused on the Democratic Mauritius in 2017 (-1.68 bn CHF) and with South Africa in
Republic of Congo and Angola. 2018 (-361 m CHF).
23SWISS FDI IN AFRICA Swiss-African Business Relations Status Quo 2020
Workforce employed by Swiss
companies in Africa
WORKFORCE EMPLOYED BY SWISS COMPANIES IN
18 AFRICA PER GEOGRAPHICAL ZONE
2000 2005 2010 2015 2018
% of % of % of % of % of
Workforce Workforce Workforce Workforce Workforce
Africa Africa Africa Africa Africa
Northern Africa 11,378 27% 14,280 28% 18,480 30% 26,286 37% 23,689 38%
Egypt 7,292 17% 7 740 15% 7,906 13% 12,527 18% 10,393 17%
Morocco 2,651 6% 2 947 6% 4,760 8% 5,380 8% 5,931 10%
Tunisia 723 2% 2 177 4% 2,576 4% 2,987 4% 3,537 6%
Sahel 39 0% 184 0% 299 0% 222 0% 312 1%
Western Africa 8,664 20% 8,423 16% 10,564 17% 18,800 26% 16,006 26%
Cameroon 1,311 2% 847 1%
Ivory Coast 2,882 7% 2,041 4% 2,231 4% 3,243 5% 3,221 5%
Nigeria 3,074 7% 3,031 6% 4,170 7% 10,235 14% 7,953 13%
Central Africa 610 1% 1,029 2% 1,196 2% 2,315 3% 1,547 2%
Eastern Africa 2,481 6% 2,054 4% 4,204 7% 5,886 8% 4,413 7%
Kenya 1,408 3% 1,140 2% 2,836 5% 3,667 5% 2,818 5%
Tanzania 968 1% 794 1%
Southern Africa 19, 421 46% 25,708 50% 26,836 44% 17,959 25% 16,302 26%
Mauritius 446 1% 346 1%
South Africa 17,528 41% 15,952 31% 17,919 29% 14,755 21% 13,921 22%
Total Africa 42,593 100% 51,678 100% 61,579 100% 71,468 100% 62,269 100%
The total workforce of Swiss companies employed in Africa the peak number of 71’468 employees in Africa in 2015, with
stood at 62’269 in 2018 (2.9% of total employees of Swiss the Eastern Africa region proportionally the most affected
companies abroad), of which 38% are based in Northern by this reduction (-25% of workforce since 2015). In 2018,
Africa, 26% in Southern Africa, 26% in Western Africa and 81% of the total number of employees of Swiss companies
7% in Eastern Africa. The total of 62’269 employees in 2018 were located in one of the 10 countries which are shown
represents a 13% decrease (-9’199 employees) compared to individually by the SNB.
24 S O U R C E: S W I S S N AT I O N A L B A N KSwiss-African Business Relations Status Quo 2020 SWISS FDI IN AFRICA
WORKFORCE EMPLOYED BY SWISS COMPANIES IN AFRICA PER
19
GEOGRAPHICAL ZONE / “OLD” MEASUREMENT METHOD
In 2014, the SNB harmonized its method to measure the workforce of Swiss companies employed abroad in
line with international standards. According to international standards, the workforce only includes subsidiaries
abroad that are owned by Swiss-controlled groups (no foreign investor owns more than 50% of the company; see
table in section 18). Until 2013, the data also included staff numbers of subsidiaries abroad that are owned by
Swiss-domiciled, but foreign-controlled groups (i.e. the ‘old measurement method’). As the figures according to
the measurement method as of 2014 seem very low compared to our own research, we are grateful to the SNB for
again providing us with the time series calculated according to the ‘old’ measurement method.
2000 2005 2010 2015 2018
% of % of % of % of % of
Workforce Workforce Workforce Workforce Workforce
Africa Africa Africa Africa Africa
Northern Africa 14,033 22% 16,734 23% 44,900 38% 40,934 27% 37,889 25%
Egypt 8,450 13% 9,416 13% 31,541 27% 24,132 16% 21,631 14%
Morocco 3,467 5% 3,306 5% 6,568 6% 7,005 5% 8,103 5%
Tunisia 1,404 2% 2,596 4% 2,596 2% 3,480 2% 3,635 2%
Sahel 39 0% 184 0% 307 0% 1,690 1% 637 0%
Western Africa 12,401 20% 11,559 16% 13,653 12% 23,144 15% 21,746 14%
Cameroon 2,188 1% 1,497 1%
Ivory Coast 2,906 5% 2,171 3% 2,498 2% 3,410 2% 4,308 3%
Nigeria 6,763 11% 5,957 8% 5,208 4% 12,071 8% 9,413 6%
Central Africa 616 1% 2,929 4% 2,961 3% 12,737 8% 11,874 8%
Eastern Africa 3,808 6% 2,614 4% 5,939 5% 8,802 6% 12,600 8%
Kenya 1,670 3% 1,480 2% 3,357 3% 4,488 3% 8,053 5%
Tanzania 2,564 2% 2,606 2%
Southern Africa 32,436 51% 39,382 54% 49 ,193 42% 65,109 43% 68,035 45%
Mauritius 521 0% 1,386 1%
South Africa 19,695 31% 29,626 40% 39,306 34% 47,996 31% 47,146 31%
Total Africa 63,333 100% 73,402 100% 116,953 100% 152,416 100% 152,781 100%
With the “old” measurement method, the total workforce the 10 countries which are shown individually by the SNB.
employed by Swiss companies in Africa stood at 152,781 Comparing figures from the “old” method with the other
in 2018 (4.5% of total global workforce employed by Swiss data (standard work force, FDI stock and flow) shows
companies abroad), of which 45% are based in Southern two interesting aspects: Firstly, in terms of number of
Africa, 25% in Northern Africa, 14% in Western Africa and 8% employees in Africa, the “old” method does not show a
in Central Africa and Eastern Africa respectively. The total of significant decrease in Swiss investments in recent years,
152,781 employees in 2018 represents only a 1% decrease contradictory to the assumptions that could be drawn from
(-1,240 employees) compared to the peak number of 154,021 the rest of the data; and secondly, it seems that many
employees in Africa in 2014. In 2018, 70% of the total number Swiss-based, but majority foreign-owned companies are
of employees of Swiss companies were located in one of investing in Africa.
S O U R C E: S W I S S N AT I O N A L B A N K 25CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 26
Swiss-African Business Relations Status Quo 2020 SWISS FDI IN AFRICA
New investment projects
Back in 2002, IBM-Plant Location International (IBM-PLI) started
developing a new way of tracking global investment location decisions
at a project level with its Global Location Trends database. This database
tracks announced decisions of companies to locate new operations in
regions outside of their HQ region/country on an ongoing basis.
The analysis of foreign investment volume focuses on job creation, which is, from an economic
development perspective, considered to be the best indicator of the local economic impact of an
investment. Capital investments, on the other hand, only relate to initial spending by the investing
company to build and/or start up an operation and do not reflect the long-term impact.
Further, the investment that companies make in a new operation often flow to other markets
where equipment, construction services etc. are procured. As such, large portions of the capital
investment do not reach the investment destination. Mergers and acquisitions (M&A) and other
pure capital investments, such as privatizations and acquisitions of share capital, are excluded
from the analysis if these forms of investment do not lead to the immediate creation of a new
physical operation in another country or additional jobs.
Thanks to the collaboration with IBM-PLI, we are able to show specific Swiss-African data at the
project level (projects where information is publicly available).
On a global level, in 2018, the IBM-PLI report tracked 13,266 projects creating 1.06 m new jobs.
Compared to 2017, this is -9% in terms of jobs created and -3% in terms of number of projects.
When looking at Africa, 133,000 new jobs were created in 2018 (+5% compared to 2017) and the
number of new investment projects stood at 722 (-8% compared to 2017). The annual number of
newly created jobs has almost doubled in the past few years compared to 2010 whilst the number
of projects went up +-30% during the same period.
27SWISS FDI IN AFRICA Swiss-African Business Relations Status Quo 2020
GLOBAL REGIONAL PROFILE:
20 AFRICA - TREND IN FOREIGN INVESTMENT PROJECTS AND JOBS, 2009-2018
150,000 1,000
800
100,000
600
50,000 400
200
0 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
JOBS PROJECTS
Over the past 10 years, publicly announced When looking at Africa (see table 21), Swiss-based
investments in African countries have, on average, companies announced 22 new investment projects
accounted for 8% of the global total in terms of newly per year over the last 10 years, creating an average
created jobs and 5% of new projects worldwide. of 2,154 jobs every year. This represents 7% of newly
created jobs globally by Swiss companies. In the last
Swiss companies have, on average, created 30,000 10 years, Switzerland thus ranked, on average, as the
new jobs over the last 10 years with an average 11th biggest investor (7th position in 2012 and 2013;
of 430 new projects announced annually over the 18th position in 2016) in terms of number of newly
same period. created jobs in Africa.
GLOBAL REGIONAL PROFILE:
21 AFRICA - TREND IN FOREIGN INVESTMENT PROJECTS AND JOBS, 2009-2018
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Switzerland’s ranking 10 13 12 7 7 14 9 18 9 15
Number of new jobs created 1,583 1,501 1,034 2,280 1,789 2433 3,816 1,741 3,605 1,759
Africa as % of global Swiss 6.0% 4.8% 3.8% 7.5% 6.9% 6.7% 13.0% 5.5% 10.0% 6.2%
investments (% of new jobs)
S O U R C E: I B M-P L A N T LO C AT I O N I N T E R N AT I O N A L, G LO B A L LO C AT I O N T R E N D S 2 0 1 9
28Swiss-African Business Relations Status Quo 2020 SWISS FDI IN AFRICA
Announced Greenfield
FDI projects and cross-
border M&A activities
Another main source for analyzing foreign investment trends around the world is the capital
investment data published by the United Nations (UNCTAD World Investment Report, based on
data from FDI Markets and Refinitiv). This data measures the capital flows through various forms
of FDI, including mergers and acquisitions (M&A). UNCTAD does not systematically publish time
series on a bilateral country level, but the latest World Investment Report 2019 highlights the value
of announced greenfield FDI projects and cross-border M&A purchases by Swiss Multinational
Enterprises (MNEs) in Africa for 2017 and 2018.
VALUE OF ANNOUNCED GREENFIELD FDI PROJECTS AND CROSS-BORDER
22 M&A PURCHASES BY SWISS MULTINATIONALS IN AFRICA,
2017 & 2018 (IN M USD)
2017 2018
Announced greenfield projects 2,422 992
Net cross-border M&A activities 480 -1,713
Announced greenfield projects are (based on data from FDI UNCTAD’s cross-border M&A figures are gathered based
Markets) based on company announcements, media reports on data from Refinitiv. These cross-border M&A figures
etc. and are not based on the tracking of an actual money are based on real transactions and, according to UNCTAD,
flow. These announcements include new greenfield projects presented as net figures to better align them with other
as well as expansions of existing investments. The database available FDI data. Comparing the published figures for
does not track the implementation of projects following their 2017 and 2018 with other sources, it is assumed that the
announcement (some may change or be stopped over time). 480 m USD net figure in 2017 includes investments and
When looking at other available data and according to our divestments, whilst the data for 2018 (- 1.7 bn USD) is
own research, we assume that the values shown in the table dominated by one major divestment. Major cross-border
are too high. This could partially be due to the fact that some M&A activities between Switzerland and Africa in 2017 and
announcements which include new investments in several 2018 occurred in the mining as well as oil & gas sectors.
countries are counted twice.
S O U R C E: U N C TA D W O R L D I N V E S T M E N T R E P O RT 2 0 1 9, F D I M A R K E T S, R E F I N I T I V 29CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 30
Swiss-African Business Relations Status Quo 2020 CONCLUSION
5
Conclusion
This edition of the Swiss-African business relations status quo, published
in April 2020, features trade figures from 2019 and FDI figures from 2018. It
highlights the challenging global context characterized by increasing trade
tensions and protectionist measures in recent years.
However, the report does not cover the impact of COVID-19 Transit trade figures further emphasize the importance
on Africa, Swiss-African business relations and the global of Swiss-African trade relations for African economies.
trade and investment landscape as the situation is evolving Transit trade, defined as goods which are purchased
while this report is being written. Key findings of our research and sold by merchants (in our case Swiss-based trading
and analysis include: companies), without being transformed between purchase
and resale that never reach the country where the merchant
G LO B A L P E R S P E C T I V E: is based, is often overlooked when considering Swiss-African
business relations. On an aggregated basis, Swiss-based
Africa remains an attractive investment destination but companies sold goods purchased outside of Switzerland to
Africa’s share of global FDI to emerging markets stays African countries worth 32.6 bn CHF in 2019 (4.2% of global
modest. Globally, FDI flows slid by 13% in 2018 and remained Swiss revenues) and on the other hand purchased goods
flat in 2019. Whilst FDI flows to developed countries in Africa worth 45.6 bn CHF (6.2 % of global purchases)
decreased by 6% in 2019 and 27% in 2018 to the lowest level which were sold globally (excl. Switzerland). On a net level,
since 2004, FDI flows to developing economies remained our research shows that Swiss-based companies assisted
stable over the last two years (absorbing more than half of African countries in generating net surplus revenues (in hard
global FDI flows). FDI flows to Africa rose by 11% in 2018 currencies) of 12.9 bn CHF.
and by 3% in 2019 (flows of 49 bn USD in 2019; 3.5% of
global FDI). Trade in services stands at 59% of the value of trade
in goods. When looking at trade in services between
S W I S S-A F R I C A N T R A D E R E L AT I O N S: Switzerland and Africa, the volume stood at 3.4 bn CHF in
2019 (1.5% of global Swiss trade in services), which is also
The top 7 trading partners in Africa account for 80% of equivalent to 59% of the value of the Swiss foreign trade
overall Swiss-African trade. Swiss-African cross-border in goods (excl. gold) with Africa. Swiss trade in services
trade (excluding gold) has remained stable in the last few relations with Africa generated a trade surplus of 1.1 bn
years at a level of 5.2 bn CHF in 2019 (representing 1.3% of CHF in 2019. More than 50% of the trade in services volume
global Swiss trade). The top 7 trading partners combined between Switzerland and Africa is generated with South
(Egypt, South Africa, Nigeria, Morocco, Libya, Tunisia and Africa (23%) and Northern Africa (30%).
Algeria) were responsible for 80% of overall Swiss-African
trade in 2019. The trade volume including gold stood at a S W I S S F D I I N A F R I C A:
record high of 16.2 bn CHF in 2019 (2.8% of global Swiss
trade), an increase of 14% compared to 2018. While Swiss FDI stock fell by 15% between 2016 and
2018, this does not mean that the African continent has
Exports and imports are dominated by a small number of become a less attractive investment destination. Rather,
product groups. Chemicals and pharmaceuticals, machinery it is a reflection of significant devaluations of currencies.
and agriculture products made up over 80% of Swiss exports Swiss FDI stock in Africa stood at 11.3 bn CHF in 2018
to Africa in 2019, whilst 75% of all imports (excl. gold) were (0.8% of global Swiss FDI), a 15% decrease compared to
composed of energy products, agriculture products and textiles. the peak in 2016. This decrease was not mainly due to
C O N T I N U E S O N N E X T PA G E
31CONCLUSION Swiss-African Business Relations Status Quo 2020
major divestments, but rather based on re-adjustments of (-1,240 employees) compared to the peak number of 154,021
book values of Swiss investments linked to the devaluation employees in Africa in 2014. It is important to note the
of local currencies, as some currencies, in which Swiss difference of more than 90,000 employees when comparing
companies have substantial interest, devaluated by between the two measurement methods.
10 and 50 % against the Swiss Franc since 2015.
New unpublished data from IBM-PLI confirms Switzerland’s
Negative net flow figures of Swiss FDI to Africa in 2017 position as a major international investor on the African
and 2018 were triggered by a small number of major continent. Data from IBM-PLI on announced decisions of
transactions. The SNB reported negative net FDI flows from companies to locate new operations in regions outside
Switzerland to Africa in 2017 (-1.4 bn CHF) and 2018 (-388 the country where their HQ is located, with a focus on
m CHF). The negative value in 2017 was mainly triggered employment and new jobs created, also re-confirms
by one or several large Swiss divestments in relation Switzerland’s important position as a major investor on
to Mauritius. According to our own research, 2018 was the African continent. When looking at Africa, Swiss-based
dominated by one major mining divestment in South Africa companies announced, on average, 22 new investment
as well as some divestments in Central Africa. projects per year over the last 10 years. These projects
generated around 2,154 jobs per year, representing 7% of
W O R K F O R C E E M P LOY E D BY S W I S S C O M PA N I E S the new jobs created worldwide by Swiss companies. Based
I N A F R I C A: on the number of newly created jobs over the last 10 years,
Switzerland has ranked, on average, as the 11th biggest
There has been no significant reduction of Swiss investor in Africa (7th position in 2012 and 2013; 18th position
investments in Africa. Workforce figures also show the in 2016).
importance of Swiss-based but majority foreign-owned
companies in Swiss-African business relations. The official Some of the key findings (e.g. transit trade, IBM-PLI
statistics from the SNB show a total of 62,269 people investment announcements) are based on new, previously
employed by Swiss companies in Africa in 2018 (2.9% unpublished data. Integrating these new sources into
of total employees of Swiss companies abroad), a 13% the publication helps to gradually better understand the
decrease (-9,199 employees) compared to the peak number importance, real value and characteristics of Swiss-
of 71,468 employees in Africa in 2015. However, with the African business relations. True to SABC’s motto in 2020
“old” measurement method (also takes into account Swiss- “10 years later – the journey continues” which celebrates
based companies which are majority foreign-owned), the the first 10 years of existence, the association aims to
total workforce stood at 152’781 employees in 2018 (4.5% of continue shedding light on Swiss-African business relations
total employees of Swiss companies abroad), only 1% down going forward.
I M PA C T O F C O V I D-1 9
COVID-19 has already had a massive impact on global trade and investment and this will continue over the
next few years. The World Trade Organization (WTO) predicts that world trade will fall by between 13% and
32% this year. UNCTAD reports that M&A announcements in Q1 2020 are down by 70% and global FDI flows
are foreseen to be down by 30-40% leading up to 2021. For Africa, experts have already downgraded original
economic forecasts in most economies by about 2-3% for 2020 due to the pandemic. UNECA, the United
National Economic Commission for Africa reports that 30 m jobs are at risk in Africa (in an environment
where 12-15 m jobs need to be created annually in the region to keep up with the growing population). African
Ministers of Finance have requested an immediate emergency economic stimulus of 100 bn USD, including
the call for debt relief and waivers on foreign debt interest payments to gain the fiscal space required to deal
with the crisis. McKinsey projects a loss of between 90-200 bn USD for Africa in 2020 due to the pandemic.
3233
CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 34
Swiss-African Business Relations Status Quo 2020 CROSS BORDER TRADE IN GOODS
35CROSS BORDER TRADE IN GOODS Swiss-African Business Relations Status Quo 2020 S W I S S-A F R I C A N B U S I N E S S C I R C L E (S A B C) C/O R A I N B O W U N L I M I T E D N E U E N G A S S E 2 1, C H – 3 0 1 1 B E R N +4 1 (0)2 2 7 8 8 4 2 7 7 +4 1 (0)2 2 7 8 8 4 2 7 6 E M A I L I N F O@S A B C.C H 36E B S I T E W W W.S A B C.C H W L I N K E D I N F O L LO W T H E S W I S S-A F R I C A N B U S I N E S S C I R C L E
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