Ghana-Germany bilateral relations in perspective ahead of Angela Merkel’s visit

By
Godwill Arthur-Mensah, GNA

Accra, Aug. 28, GNA – The Chancellor of the
Federal Republic of Germany, Dr Angela Merkel, is slated to visit Ghana on
Thursday, August 30, to strengthen the bilateral relations between Ghana and
Germany for their mutual benefit.

The German Chancellor would be accompanied by
a high-ranking German business delegation to explore business and investment
opportunities in the country.

As part of the visit, German Industry and
Commerce in Ghana (AHK Ghana), will host a business dialogue to facilitate an
exchange on the prevailing business environment in Ghana.

Ghana has had a long historical relationship
with Germany ever since official contacts were made after Ghana’s independence
in 1957.

Ghana has 
also enjoyed  over fifty  (50) 
years  of  bilateral 
relations  with  Germany 
since  her independence.

The nature of bilateral relations between the
two countries has gradually improved over the years.

The good relations  between Ghana 
and Germany, had  allowed  for 
beneficial  ties  in  the
 areas 
of  trade  and 
investment,  educational  exchange programmes and socio-cultural
activities.

The two nations have maintained close and
intensive political relations. Ghana is a key partner for Germany in West
Africa, as illustrated by the inclusion of Ghana in the G20 initiative Compact
with Africa under the German G20 Presidency in 2017, as well as the conclusion
of a bilateral reform and investment partnership the same year.

The state visit of Federal President
Frank-Walter Steinmeier to Ghana in December 2017, was high point in
German-Ghanaian relations. Since taking office, President Nana Akufo-Addo had
met twice with Federal Chancellor Dr Angela Merkel: in June 2017 on the
occasion of the G20 Africa Conference in Berlin and in February 2018 on an
official visit to Germany to attend economic conferences in Dortmund and
Berlin.

A wide range of German institutions and
intermediary organisations are active in Ghana. The German business sector has
been active in Accra since 2011 through a Delegate Office of German Industry
and Commerce.

A Germany Trade and Invest (GTAI)
correspondent has also been based in Accra since early 2014.

Cultural intermediaries – such as the
Goethe-Institute, and also institutions like the German-Swiss International
School (GSIS) and the German Academic Exchange Service (DAAD) – promote
scientific, academic and cultural exchange between the two countries.

Ghana is one of Germany’s most important
trading partners in sub-Saharan Africa. The country’s bilateral trade with
Germany amounted €481million in 2017, compared with €584million in 2016.

Germany exported goods worth €266million to
Ghana in 2017, while importing goods worth €215million, down from €302million
and €281million respectively in 2016.

The Ghanaian Government is seeking to
stimulate the country’s economy, in particular by strengthening the private
sector, while also aiming to dismantle existing barriers to foreign investment.

German’s annual trade with Africa is estimated
at $60 billion, however, Germany had lagged behind other Western countries that
have done more in terms of trade opportunities in Africa.

Out of more than $10 billion in German
investments on the continent each year, 90 percent is with just three countries
– South Africa, Nigeria and Algeria.

Notwithstanding, Ghana  had 
benefited  from  a 
number  of  investments 
and  economic  trade 
activities  from Germany.  The country 
had  attracted  investment 
from  Germany  in  the  areas 
of construction, agriculture (Shea 
butter and rice  farming project),
manufacturing and services.

Ghana 
had  benefited  in 
some  form  of 
technical,  cultural,  and 
military assistance  from  Germany.

The government 
of  Ghana  continues 
to  receive budgetary  support 
and  further  receives 
political  assistance  from 
Germany  in  strengthening democratic governance and
various institutions of state.

Ghana is Germany’s third largest trading
partner in sub-Saharan Africa, after South Africa and Nigeria, though it is
well behind these two countries.

Germany through Deutche Gesellschaft
International Zusammenarbeit (GIZ) invested €1.8 million to boost the
development of renewable energy.  

This effort from German government is to help
build capacity in Ghana’s energy sector. 
It further offers opportunity to diversify energy production.  This diversification will help improve
Ghana’s energy capacity development.

Germany also supported the Kofi Annan
International Peacekeeping   Training
Centre (KAIPTC). Since its establishment in 2003, KAIPTC has been supported
with over €11million, through  the  German 
Ministry  of  Foreign 
Affairs,  Ministry  of 
Defence,  Ministry  of 
Interior, and Ministry of Economic Cooperation.

Germany had contributed significantly to the success
of the Centre through financing of buildings, logistical support, and
deployment of advisors and execution of holistic courses, which help military
officers in all manner of activities.

Benefits
in Ghana-Germany Relations

Germany has also benefited from Ghana through
Ghana-Germany relations. These gains are vastly in the areas of trade and
economic activities. The trading activities include, export of cocoa beans and
non-traditional export commodities. 

Germany further benefits from the repatriation
of profit from its investments in Ghana, especially through tax exemption
granted to German companies commencing operations in Ghana.

Germany’s contribution to Ghana’s democratic
dispensation

In terms of democratic principles, good
governance, the rule of law, respect for human rights and maintaining domestic
stability, Ghana is in good standing in the West Africa Sub-region and Africa
in general.

Ghana’s democracy has been partly supported by
the support she enjoyed from German 
non-governmental 
organisations  (NGOs), such  as  Konrad  Adenauer 
Stiftung  (KAS),  Friedrich-Ebert-Stiftung  (FES), 
Kreditanstalt  fur
Wiederaufbau  (KfW)  and 
German  International  Cooperation 
(GIZ), that have been  promoting
development  in areas of agriculture,
private sector development, capacity 
building  and good governance.

Challenges
to Ghana- Germany Trade and Investment Relations

Ghana and Germany offer each other different
commodities for trade.  Whereas  Germany brings  more 
technologically  advanced  and 
sophisticated  machines  and 
goods  to  Ghana 
to trade  for  high 
priced  revenue.

Ghana, on the other hand, exports mainly
primary products, which include cocoa, aluminium ores etc. In 2012, trade
exchange between the two countries grew by 56% with a chunk of the trade
exchange going in favour of Germany. This disparity creates imbalance between
Ghanaian and German imports.

The 
main  challenge,  however, 
has  been  the 
minimal  influence  of 
Ghanaian  trade  and investment activities in Germany. Thus,
compared to Germany, Ghana is quite disadvantaged on trade exchange between the
two countries.

In 
as  much  as 
Ghana  provides  investment incentive  and 
strategy  through  Ghana Investment Promotion Centre (GIPC)  for 
foreign  investors  like 
Germans  to  invest 
in  Ghana, same  cannot 
be  said  of 
favourable  German  policy 
to  suit  Ghanaian 
investors. 

Ghanaian investors  do 
not  have  same 
financial  muscles  to 
battle  other  multi-national  companies 
in investment  project.

Ghanaian investors find it difficult to source
capital for investment projects. Even though the 1994 Ghana Investment
Promotion Act guarantee encourages joint-venture  partnership, it’s difficult on the  part 
of  Ghanaian  investors 
to  raise  the 
necessary capital  to  put 
up  joint  venture 
investment  with  foreign 
investor  including  Germans. 

This capital constraint to an extent holds
back bilateral investment and trade relation between the two countries.

Ghana-Germany 
bilateral  relations  continue 
to touch  critical  areas 
of  paramount  importance to 
both  countries.  Both 
countries  continue  to 
cooperate  in  the 
areas  of  health, 
education, agricultural 
development,  military  assistance, 
private  sector  development, 
trade,  political
cooperation,  road,  and 
cultural  development. 

Amidst 
these  efforts,  there 
are  emerging challenges  of 
trade  imbalances,  where 
Ghana’s  domestic  market 
is  flooded with  German goods 
and  services.  Also, financial constraints, cultural
differences among others affect bilateral relation between the two countries.

Germany is the world’s third largest exporter
and an established leader in technological innovations and industrialization.

In contrast, Africa, as the world’s fastest
growing region, is a hotspot for investment and is in need of infrastructure,
power and industrialization. With an intertwined history, and perfectly
opposing needs, Germany and Africa are poised to create profitable partnerships
for their mutual benefits.

Credit: https://accra.diplo.de/gh

http://ugspace.ug.edu.gh/bitstream/handle/123456789/21671/Ghana-Germany

GNA

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