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German G20 presidency promotes investment in Africa

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Some of the highest representatives for international politics and nine African leaders on Monday participated in the conference on strategic partnership with Africa, promoted in Berlin by the German G20 presidency in view of the summit scheduled in Hamburg on 7 and 8 July next.

During the talks, one of the dominant fulcrums of the July summit – Africa’s development – emerged. In this context, ​​was discussedthe so-called “Marshall Plan with Africa”(not for Africa),with explicit reference to the US economic aid program for the reconstruction of Europe after the second World War.

Even if in reality, it would be more realistic to talk about a “Merkel Plan” as Ivory Coast President Alassane Ouattara made during the conference, referring to the investment program wantedby the German leader to boost the Africancontinent’s growth.

The G20’s “Compact with Africa”

African heads of state welcomed the German initiative launched last October with a Merkel three-day official trip to Mali, Niger and Ethiopia. Visit concretized with “Compact with Africa”, promoted by German Finance Minister Wolfgang Schäuble.

The Pact, presented during G20 Finance Ministers and Central Bank Governors Meeting, held last March in Baden Baden, is aimed at improving the conditions for sustainable private investment, enhancing infrastructures and fostering fighting unemployment in several African countries.

Five of them – Tunisia, Morocco, Rwanda, Senegal and Ivory Coast – were present with their delegations in Baden-Baden where they were committed to actively participating in implementing the reforms needed to increase their investment potential. While international partners organizations need to provide technical expertise and support development in the region.

According to the African Development Bank (AfDB), the main continental financial partner for the implementation of the plan, the primary obstacle is to diversify sources of funding for Africa.

The non-profit institution is well aware of the difficulties in mobilizing financial resources through traditional partners, and so it intends to differentiate and look for external resources.

Not surprisingly, the AfDB last month decided to hold its annual meeting in Ahmedabad, India, which has long been one of its priority partners. While next year, will be South Korea, another pan-African finance institutionkey partner, which will host in Busan, the53rd Annual Meeting of the Bank.

In the framework of the cooperation plan with Germany for the implementation of the “Compact with Africa”, AfDB published a report produced in collaboration with the World Bank and the International Monetary Fund, which includes a series of tools and measures to be taken to improve the macroeconomic framework and financing strategies to stimulate investment in the continent.

The study finds that the economic phases experienced over the last two years seem to have slowed Africa’s growth trend, but it still has the potential to improve even more rapidly and more inclusive thanks to a strong entrepreneurial spirit and abundant resources.

Germany to Invest EUR 300 Million in Africa

The “Compact with Africa”is complemented by another instrument prepared by German Minister for Economic Cooperation and Development,Gerd Müller, consisting of a EUR 300 million aid plan for vocational training and employment programs, for now in Tunisia, Ghana and Ivory Coast.

The three African states have pledged to respect human rights, fight corruption and ensure the rule of law, thus creating a more favourable economic climate. While Morocco, Rwanda, Senegal and Ethiopia could soon be added to the beneficiary countries.

In Berlin’s summit on Monday, Merkel explained the reasons for such an investment, stressing that “this is not a trivial economic aid to developing countries”. According to the German Chancellor, a synergistic work involving as many countries as possible to improve conditions in Africa is equivalent to “creating more security for us too”.

In this sense, Merkel has questioned the efficiency of development aid so far and has come to fruition in its strategy to foster investment in African countries through the mobilization of developed countries and private sectors. A binomial that should enhancenew jobcreation in Africa, in order to end the migratory phenomenon.

@afrofocus

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