Italy-Africa Conference, Mattei Plan: over €5 bln to enhance collaboration with African countries

Italy-Africa: the economic context – Data on trade and investment interactions between these two regions underscore a well-established rapport.

According to statistics from the Economic Observatory of the Ministry of Foreign Affairs, 2022 witnessed $502 million in direct investments from Italy to African countries and a cumulative stock of direct investments amounting to circa $27 billion by 2022. Shifting the focus to the trade between Italy and Africa in the same year, the exchange surpassed 69 billion euros. This positioning ranks Italy as the world’s second-largest importer of African products, particularly emphasizing raw materials, and the eleventh-largest exporter, with a concentration on versatile machinery and petroleum-derived products.

Examining bilateral relationships, Italy’s principal trading partners in 2022 continue to be North African countries, followed by South Africa, various West African nations (including Nigeria, Côte d'Ivoire, and Senegal), as well as Angola and Congo.

As of 2017, there were 1,740 “Italian” companies in Africa, generating a collective turnover of nearly 26 billion euros. These companies operate not only in the energy sector but also extend their footprint into construction, transportation, logistics, and mechanics.

Furthermore, Italy’s strategic interest in Africa appears to be on the rise, evident in the exponential growth of ICE offices on the continent. Specifically, in Sub-Saharan Africa, ITA’s (Italian Trade Agency) offices expanded from a lonely presence in Johannesburg in 2013 to a network of 8 offices in 2024, spanning key locations such as Accra, Addis Ababa, Dakar, Lagos, Luanda, Maputo, and Nairobi. Additional offices in Algiers, Casablanca, Cairo, Tunis, and a correspondence point in Brazzaville further underline Italy’s deepening engagement across the African continent.

The Law Decree No. 161 of 15 November 2023: the Mattei Plan – In a bid to propel economic ties between the two regions, Law No. 2, dated 11 January 2024, which converted (with amendments) Law Decree No. 161 of 15 November 2023 (hereinafter referred to as the “Law Decree”), initiated a plan with the explicit goal of “promoting development in African states.”¹

As outlined in Article 1 of the Law Decree, the Mattei Plan stands as a programmatic-strategic framework designed to foster Italian development across the African continent. It delineates key areas of intervention and priorities, aiming to promote exports and investments, with a particular emphasis on digital infrastructure, renewable sources, and circular economy.

To operationalize the program, the newly enacted legislation establishes a Steering Committee (referred to in Articles 2 and 3 of the Law Decree). This committee is tasked with overseeing the four-year duration of the Plan and comprises representatives from the government, territorial entities, and major public subsidiaries, as well as experts and stakeholders from civil society, the private sector, and academia.

Once appointed, the Steering Committee will assume the responsibility of coordinating collaborative efforts between Italy and African states. Its functions include approving planning documents and their revisions, monitoring the implementation of the Plan, and presenting an annual report to the Italian Parliament. Moreover, the Steering Committee is mandated to foster coordination among various government levels and public and private entities. It will also be instrumental in facilitating Italian stakeholders’ access to international financial resources, including the EU-Africa Global Gateway promoted by the European Commission, and coordinating communication initiatives related to the Plan.

The Italy-African Conference – Further insights into the implementation of the Law Decree emerged during the Italy-Africa Conference held on January 29-30 2024. The Italian President of the Council of Ministers clarified that the Mattei Plan is envisioned as a strategic initiative, focusing on medium and long-term priorities, with an initial financial allocation of 5.5 billion euros (encompassing credits, donations, and guarantees).

The strategic directions of the Mattei Plan, along with its associated funding, were delineated during the conference. Emphasis is placed on key sectors such as education and training, health, agriculture, energy, and access to water.

To illustrate the tangible impact of the Mattei Plan, several pilot projects were highlighted, including:

• Establishing a center of excellence for vocational training in Morocco, specifically focusing on renewable energy;

• Upgrading of school infrastructure in Tunisia;

• Enhancing accessibility to primary services in the Ivory Coast;

• Initiating an agriculture monitoring project in Algeria;

• Constructing an agribusiness center in Mozambique and a grain and legume production area in Egypt;

• Developing several water projects in Tunisia, Congo, and Ethiopia, as well as a biofuel supply chain in Kenya;

• Advancing connecting infrastructure, primarily in the energy sector, between the European and African continents.

Additionally, the government announced plans to collaborate with Cassa Depositi e Prestiti (CDP) to launch a new financial instrument by the end of the year. This instrument aims to facilitate private sector investment under the Mattei Plan. In a parallel effort, Simest S.p.A. disclosed a noteworthy 200-million-euro subsidized financing package, intended to foster synergistic growth between Italy and countries on the African continent.

What next – Awaiting the appointment of steering committee members and the formulation of the policy document detailing the initiative, the Mattei Plan currently stands in a preliminary developmental phase, lacking specific guidance on the financing and selection criteria for private investment projects.

Regarding the implementation timeline, as outlined in the Law Decree, the Italian government is anticipated to submit an initial report to Parliament on the status of Mattei Plan implementation by 30 June 2024. Consequently, there is optimism that an initial version of the programmatic plan may be accessible by the conclusion of the first half of this year.

Authored by Andrea Foglia, Aurora Muselli, Roberto Isibor, Isoken Obayagbona.

References

1 The plan is named after Enrico Mattei, the former head of ENI, Italy’s leading oil company, paying homage to his legacy. Enrico Mattei, who passed away in 1962, played a pivotal role in transforming ENI into a state-owned entity and implementing ground-breaking policies in the energy sector. These policies positioned the oil company as a global player, challenging the dominance of the so-called “seven sisters.”