Germany is hosting an investors’ conference in Berlin under the G20’s Compact with Africa initiative. The gathering is part of the German government’s commitment to supporting African countries in making economic gains.
German Chancellor Olaf Scholz on Monday will host a meeting of African and G20 nations in Berlin.
The gathering is part of the Compact with Africa (CwA) initiative established during Germany’s 2017 presidency of the G20.
The CwA aims to generate additional private investment in the African nations to boost their economies.
German Vice-Chancellor and Economy Minister Robert Habeck will also attend Monday’s summit, along with EU Commission President Ursula von der Leyen, French President Emmanuel Macron, ten African heads of state and government, and more than 30 ministers from across the continent.
“Interest in the Compact with Africa has grown steadily,” said Heiko Schwiderowski, Africa specialist at the Association of German Chambers of Industry and Commerce, known by its German abbreviation DIHK.
Schwiderowski emphasized that the investment conference with 800 delegates is being billed as the largest business conference that has ever taken place on German soil.
Boosting investors’ confidence
Germany’s business and political leaders are sending out a very important signal, according to Schwiderowski, who said that working to expand economic relations is a worthwhile endeavour.
Some 13 African countries have so far joined the initiative: Benin, Burkina Faso, Ivory Coast, the Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Togo and Tunisia. As one of Africa’s largest economies, South Africa holds the co-chairmanship.
Other countries, such as Angola, Zambia, Nigeria and Kenya, are attending the Berlin conference as guests.
Has the CwA brought more prosperity to Africa?
Ghanaian analyst Emmanuel Bensah who said that initiatives such as the CwA are an important tool for assessing African economies and also serve as a barometer that measures countries’ development, “because they make it possible to get snapshots of different countries and see what is happening with them and what needs to be improved.”
Bendah is also eyeing the long-delayed African Continental Free Trade Area (AfCFTA) agreement that aims to create a single unified market for the continent’s 1.3 billion people and to boost economic development.
XN Iraki, an associate professor at the University of Nairobi specializing in economic growth, said that it is still too early to take stock of the CwA.
“Compact with Africa was a great idea but six years is too short a time to see the effects,” Iraki told DW.
Although CwA should attract investors from the G20 countries, the fundamentals on the ground are not necessarily favorable for private investment, Iraki added.
“We don’t have very good infrastructure, political instability and the belief that African countries need to be helped by someone.”
However, Iraki believes it is time for African countries to take on more responsibility. “CwA is still in the development stage, let’s give it more time,” he said.
German economic expert Robert Kappel is more cautious.
“There is a need to reform this model and pay much more attention to the fact that Africa’s interests play a much greater role,” Kappel told DW. “Africa’s interests lie in industrialization, it creates jobs.”
Many African countries have initiated reforms and thus improved the framework conditions. Countries such as Ivory Coast, Ghana, Senegal, Ethiopia and Tunisia have also seen increasing private investment from the G20 countries, but at a rather low level.
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Nevertheless only two countries are investing primarily in the energy and raw materials sector: Morocco and Egypt.
Despite the push from Berlin to boost German-African business ties, trade and investment links remain modest.
Kappel suggested that it would perhaps be more sensible to expand the continent’s infrastructure in order to boost intra-African trade.
That would also create new jobs for the majority of the population — something that the G20 Compact with Africa has yet to achieve, he concluded.
This article was originally published in German
Edited by: Keith Walker
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