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Compact with Africa summit: starting signal for more intensive cooperation between Africa and Germany




The G20 initiative "Compact with Africa" (CwA) aims to expand relations between rich industrialised countries and emerging economies in Africa. To this end, political and economic heavyweights came together in Berlin on Monday. As a result, Germany wants to invest four billion euros in green energy on the neighbouring continent by 2030. Private investment is seen as the key to the development of progressive countries. EWIA CEO Ralph Schneider describes how he experienced the summit. 

Berlin was teeming with heads of state on Monday. Federal Chancellor Olaf Scholz received presidents and prime ministers from over a dozen African states, as well as the President of the African Union and the envoy of the President of the African Development Bank. On the G20 and EU side, EU Commission President Ursula von der Leyen, EU Council President Charles Michel, French President Emanuel Macron and the Prime Minister of the Netherlands, Mark Rutte, did the honours, as did Federal Economics Minister Robert Habeck and Federal Development Aid Minister Svenja Schulze.

 

More than 700 guests came together at the Marriott Hotel in Berlin for the fourth G20 Investment Summit - German Business and the CwA Countries, which was organised by the Sub-Saharan Africa Initiative of German Business (SAFRI). SAFRI is organised in partnership with the German Chamber of Industry and Commerce (DIHK), the Federation of German Industries (BDI), the Federation of German Wholesale, Foreign Trade and Services (BGA) and the German-African Business Association.

Charity is over, German business should and wants to invest in AfricaIn particular, a pledge made by Federal Chancellor Olaf Scholz in the Chancellery afterwards made international headlines. Flanked by the Chairman of the African Union (AU), Azali Assoumani, and the Chairman of the AU Commission, Moussa Faki Mahamat, he vowed to invest four billion euros in green energy in Africa by 2030, primarily in green hydrogen. Germany also wants to do this in order to become climate-neutral by 2045. However, it was also important "that all Africans have access to sustainable and affordable energy", the German government announced.

 

The message sent out by this summit is that when it comes to African countries, it is no longer about charity or development aid, but about investments. The Nigerian President emphasised that Africans do not want donations. The Federal Chancellor takes a similar view: "The enormous economic potential can only be realised through large-scale private investment," said Scholz.

 

Federal government wants to hedge risks 

Chancellor Scholz emphasised that reforms are paying off, as the current 13 CwA states have grown twice as fast as other African countries in recent years. He sees considerable potential for renewable energies on the continent, but a sustainable energy supply is one of the key challenges in view of the 1.3 billion very young people on average.

But what exactly does Germany want to promote in the CwA states? Three things in particular, according to the German government: 

"Private investments are facilitated by favourable guarantee conditions. In this way, the German government is promoting diversification, i.e. the broadening of economic relations in order to be better prepared for crises. 

African countries should benefit more from their wealth of raw materials and take the first step in processing raw materials locally. This creates jobs and prosperity there. At the same time, German industry gains reliable suppliers. The German government is working on specific funding instruments in this area. 

There are also plans to expand support for start-ups in compact countries, especially those run by women."    

The guarantee conditions are an important instrument because, as the SZ states: "There are also risks with exchange rates and trade rules. That is why the German government wants to strengthen and expand mechanisms to safeguard investments, for example together with the World Bank."

 

On the panel and behind the scenes 

In addition to the panel discussions with business leaders and heads of state such as Bola Ahmed Adekunle Tinubu (President Nigeria), Alassane Ouattara (President Ivory Coast), Macky Sall (President Senegal),  Jean Michel Sama Lukonde Kyenge (Prime Minister of the Democratic Republic of Congo), Nana Addo Dankwa Akufo-Addo (President of Ghana), Faure Gnassingbé (President of Togo) and Hakainde Hichilema (President of Zambia) organised exclusive side events at the summit. 

 

The Friedrich-Ebert-Stiftung, for example, organised events on the topic of hydrogen and renewable energies, while other delegations met with their discussion partners in the hotels where they were staying. EWIA CEO Ralph Schneider met with delegations from the two strongest economies in West and East Africa, both of which showed a keen interest in organising something with EWIA. EWIA partners also met with the Nigerian Energy Minister, while a get-together with the Congolese Prime Minister fell through due to the schedule. 

Conclusion of the summit 

The summit was a sensation and a turning point. The new African self-confidence was evident. Not only are countries such as Russia and China fiercely courting the region, but the purchasing power of consumers is also increasing, as the middle class has tripled in some countries. However, there seems to be a strong conviction that many challenges can only be solved by working together.

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