Joint press release issued by:
Logo: Federal Ministry for Economic Cooperation and Development Logo: Federal Ministry for Economic Affairs and Energy

Development Ministry and Economic Affairs Ministry launch joint initiative for business engagement in and with Africa

Federal Minister for Development Gerd Müller and Federal Minister for Economic Affairs Sigmar Gabriel at the 2nd BMZ Forum for the Future "Making globalisation fair"

Press release of 15.12.2016 |

BERLIN – At the second Forum for the Future on "Making globalisation fair", which was held at the Federal Ministry for Economic Cooperation and Development (BMZ), Development Minister Müller and Economic Affairs Minister Gabriel presented their new initiative for more investment and trade with Africa. Through the initiative, the Federal Ministry for Economic Affairs and Energy (BMWi) and the BMZ will encourage more German and African businesses to engage in sustainable economic activities in African countries. This will create jobs and give people better opportunities and the sense that they have a viable future in their own country.

Development Minister Müller said, "Africa is a continent of opportunity. The German business community is still too hesitant about investing in Africa. So we want to encourage them to step up their engagement. This also includes efforts on our part to help improve the investment environment and mitigate risks. Jobs give people a viable future on the ground. People who have a viable future will stay in their home country."

Economic Affairs Minister Gabriel said, "The need for investment in African countries is huge. Technologies and knowledge from Germany are in particularly high demand. This offers significant opportunities for both sides – for German companies but of course also for the business communities and economies of Africa. We therefore want to continue to improve the investment environment. One first important step towards that goal was our decision in late 2014 to expand our export credit guarantees to cover numerous countries in sub-Saharan Africa."

Through the initiative, trade from and to Africa is to be strengthened, which is expected to also boost the private sector in Germany's African partner countries. The initiative will provide very practical support for business start-ups in African countries – through advice and training on business models; by establishing innovative start-up centres; and by facilitating access to financing. In addition to providing information for German enterprises, the initiative also includes financing instruments based on cooperation with banks, as well as export credit and investment guarantees from the German government. The Development Ministry and the Economic Affairs Ministry will provide proposals on how to mitigate risk for companies that are willing to invest (for example, financing of feasibility studies in the early stages of project development).

In the future, the network of German chambers of commerce abroad will be further expanded in line with business needs in host countries. In order to complement this system in a targeted manner, expertise will be provided through the ExperTS programme. In addition, the network of chambers of commerce will offer in-country consultancy for companies on the practical implementation of dual vocational training, and the general environment for trade with Africa and the framework at the EU level will be improved. Even though sub-Saharan Africa enjoys a privileged trade status, there are hardly any goods in the world market that have been produced there.

According to German business federations, there are only about 1,000 German companies that have investment operations in Africa. Factors that deter German companies from investing in Africa include an inadequate business environment, poor governance, security challenges, corruption, and excessive red tape. Given the vast opportunities that many of Africa's 54 countries have to offer, the initiative is intended to give support to German companies as they get involved in Africa. Half of all people in Africa are below the age of 25. It is expected that the continent's population will double by 2050, reaching a total of about 2.4 billion people.

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