The key elements for a Marshall Plan with Africa

Speech by Federal Minister Müller at the Dialogue with African Ambassadors in Germany, 24.11.2016 in the Marie Schlei Roolm, BMZ Berlin

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Members of the diplomatic corps,
Ladies and Gentlemen

Today I would like to offer you a new culture of partnership. A culture of respect, performance and mutual willingness to pursue reforms. I would like to suggest to you a pact on the future – a Marshall Plan with Africa.

Why am I suggesting a Marshall Plan? It is quite obvious that the challenges in Africa are not to be compared with the challenges in Europe after the Second World War. But, the efforts needed are indeed comparable. That is why I am talking about a Marshall Plan with Africa.

Because Africa is the continent of the future

For me, Africa means diversity. Africa brings together 54 countries and at least 3,000 languages. For me, Africa means size. The continent is three times the size of Europe and 85 times the size of Germany.

For the world, Africa means potential. Africa has a young, inquisitive, creative population. Half of all Africans are younger than 25. The middle class is growing, as evidenced by the new skylines in places such as Addis, Lagos or Abidjan. African companies are growing faster than their global competitors: there are already 400 African companies that are making over one billion in revenues. Industrial and manufacturing businesses in African countries could double their output by 2025. Today’s digital innovations are often "Made in Africa". The payment system M-Pesa is one such example. It is likely that, in ten years, 90 per cent of all banking transactions will be carried out using mobile devices. And 90 per cent of the potential for renewable energy in Africa is not yet being tapped – that is a driver for jobs.

Last but not least, Africa means unity. The African Union is boosting cooperation across the continent. And you are facing the challenges together, for example, with the African Peace and Security Architecture. And with the Agenda 2063 – your vision for the future you want for Africa.

"African solutions to African problems." That is your motto. And that is what we want to support.

The Marshall Plan is meant to be an offer, an offer for a new dimension to our cooperation, based on your Agenda 2063. The Plan is an invitation to enter into a dialogue. And it is important to me that I talk about my ideas for this Plan with you first.

I would like you to tell me how we can act together so as to overcome the fundamental obstacles to development.

My proposal for the priority areas of our cooperation

I would like to focus on Industry, Trade and Employment. The Marshall Plan should be first and foremost a pact on the future for Africa’s young people. Because they need jobs and prospects for the future: 20 million jobs a year will be needed. There is terrific potential for private investments, for entrepreneurship, and for a new culture of small and medium-sized businesses. And I am not talking here about the huge deposits of mineral resources and other commodities. I am talking about technological innovations made in Africa, about diversifying the economy, about developing the productive industries and about the industrial sector. There needs to be more value creation and more jobs in Africa.

This will require massive investments by the private sector. Prerequisites for investments on such a scale are peace and security; and democracy and the rule of law.

Our offer: You can take us at our word!

First of all, we will specifically support your goals. We will support the involvement of your private sector companies in your countries. And we will put into place incentives for German companies to get involved in Africa, for example, through tax agreements and through risk coverage. I am always encouraging German companies to invest in Africa.

We will work together even more closely in the climate sector. I have just come from the COP22 climate conference in Morocco. At the conference we agreed upon a partnership in which we will support your climate goals. For this we will bring together supply and demand in a better way. And we will help your countries to adapt to the consequences of climate change. An innovative instrument for this, for example, is climate risk insurance schemes.

Secondly, we will lobby for a just global regulatory framework, to be achieved by means of reforms in Germany, Europe and the whole world.

We will work to get better representation for African policymakers on the world stage, for example in the Security Council of the United Nations. I am also lobbying to put an end to damaging exports to Africa that destroy burgeoning industries. The WTO must make the transition from being a free trade organisation to become a fair trade organisation.

And we must put an end to illegal financial flows. Every year your countries lose 50 billion US dollars. This is money that is then lacking when investments need to be made in development processes. Some of this revenue is lost because of companies that do not pay their taxes.

Strengthening the reform champions

But, we also want to be able to take you at your word. That is why we want to strengthen the reform champions among you.

Anyone who succeeds in creating legal certainty in their country, and in championing human rights and fighting corruption is someone we want to work with more deeply and more specifically in future, as part of a reform partnership.

That is because, if companies are to invest and be profitable, then they need legal certainty, efficient administrations and independent courts.

Germany is already supporting many African partner countries in setting up courts of audit, for example, so as to achieve greater transparency, or in modernising their administrative bodies.

ODA alone is not going to be enough

Development policy acts as a catalyst here. Germany stands by its international commitments. The budget of the Federal Ministry for Economic Cooperation and Development (BMZ) will increase by more than one billion euros next year, to a new total of 8.5 billion euros. We will invest a large part of this money in Africa.

However, given the size of the challenges, ODA alone is not going to be enough. We need a financial trio, with ODA as the catalyst, and with private investments and, above all, more counterpart contributions. We agreed upon the basic principles for this last year when we jointly adopted the Addis Ababa Action Agenda. Now the time has come for implementation. We need to leave the paper tigers behind and focus on changes!

Africa and Europe are neighbours

After all, Africa and Europe are neighbours. We are connected by our geographical proximity. The distance between Spain and Morocco is just 14 kilometres – this is the same as the distance from Berlin Grunewald to the BMZ. We have a shared history – the cradle of humankind is in Africa. And, unfortunately, we also have a colonial history together, moulded by exploitation.

Today though, it is above all shared future interests that connect us. Climate change, poverty, hunger, conflicts and terrorism: these are all crucial issues for the survival of all humankind.

As a minister I took an oath to "devote my energies to the wellbeing of the German people". In a globalised world their wellbeing also depends on the wellbeing of Africa.

That is why 2017 should be Africa Year

We will also be discussing our proposals with other groups, such as the African Union, and with civil society, the private sector and academia. We want to use the German Presidency of the G20, and we will also be approaching our partners in the EU, for example within the framework of the EU Council of Development Ministers. The Africa- EU summit next autumn is likewise an excellent opportunity.

There is a saying that the Ovambo in South-West Africa have: "You can only get to the end of the journey by moving forward". Let us journey together. And move forward together.

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