Shortly after winning power in 2022, Italian Prime Minister Giorgia Meloni announced her government would set out a new strategy for Africa. Umberto Marengo writes that this strategy – dubbed the “Mattei plan” – reveals more about Italy and Italian political capitalism than it does about Africa.
Since the Italian government launched its “Mattei plan” with great fanfare about a year and a half ago, relations between Africa and the West have unfortunately continued to deteriorate. The public debt of countries like Egypt, Kenya and Nigeria has skyrocketed, while loan and reform packages from the World Bank and the International Monetary Fund have been met with protests and uprisings.
Projects first, then strategy
The Mattei plan says more about Italy and Italian political capitalism than it does about Africa. The method chosen is revealing. The government had three possible paths. The first was a strategic one: to design an “Italian strategy for Africa” and allocate spending and interventions based on this. The government could have presented its analysis of the geopolitical and economic context of African nations and defined thematic areas, regions and tools for intervention.
It would have been necessary to consult governments, international organisations, local economic operators and the Italian Parliament to achieve this. The Ministry of Foreign Affairs would have been in the driver’s seat, and resources would have been mostly allocated as grants or concessional loans to governments.
The main criticism of the Mattei plan is precisely the lack of strategy. It’s a legitimate criticism, even though many times more effort has gone into writing a strategy than into implementing it. Grand ambitions have produced bland documents, an example being Italy’s Triennial Strategy for Cooperation. There are many strategies produced by international bodies that have suffered the same fate. Prime Minister Meloni has essentially made the opposite choice: pilot projects first, then strategy.
The private sector
The second path was to focus on the development of the African private sector. The UK, France and Germany each invest over two billion euros annually in the private sectors of developing countries. They do so through dedicated public financial institutions that provide financing and capital to local companies. The areas of investment are defined by the government, but investment decisions are made by independent market experts.
The goal is to “create markets”, demonstrating with results on the ground that it is possible to have social and environmental impact without losing money. For this reason, a clear separation is needed: ministerial structures do not have the expertise to select these types of projects. Without independence, the purpose of these institutions disappears.
Is this a magic wand? Unfortunately, no: creating markets takes time, the selected projects struggle to become systematic, balancing development and financial returns is more of an art than a science, and not all problems have market solutions. In any case, Italy has never truly believed in development finance. It therefore avoided taking this approach.
National champions
The third path is to focus on national champions, and this is the path the government has chosen so far. The Mattei plan has so far concluded one major operation: a 2023 IFC loan to Eni (Italy’s national oil and gas company) for a biofuels project, in which CDP later took a minority stake of 75 million dollars.
This is a valuable project, although Eni has loans exceeding fifteen billion and no difficulty in raising funds without resorting to public resources. Other announced initiatives involve Leonardo in cybersecurity topics and even an attempt to revive the Broglio Space Centre, a satellite launch platform founded in Kenya by the Italian Space Agency in the 1960s and semi-abandoned for over thirty years.
The Mattei plan seems, at least in its initial stages, to be primarily economic diplomacy driven by national champions with some side tools for small and medium enterprises (SMEs). An example is that two hundred million euros, part of which are grants, have been distributed by SIMEST to SMEs for e-commerce, trade fairs and studies. These are legitimate choices, but not a paradigm shift from the past.
A national diplomatic platform
In the current geopolitical context, it is also right to think about strengthening large nationally strategic companies, but is the Mattei plan the right tool? When a large company truly wants to expand, it does so with an industrial strategy, not with side projects. There is a successful example in Italy, the energy company Enel, which in the last decade became a world leader in renewable energy in Africa, Asia and Latin America.
Enel’s bet was truly ambitious, and like all strategic choices, it came with a cost: debts increased, the stock price was affected, and it was the current government itself that called for a change of course with new management that revised ambitions, but increased profits.
This is the contradiction of the Mattei plan. It presents itself as a strategic ambition with an African focus but, at least for now, it is a national diplomatic platform driven by state-owned enterprises. And when these enterprises try to be truly innovative, as Eni under Mattei was, and take risks, it is the same government that advises caution to pay back dividends to the Italian Treasury.
Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: European Union
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