Viewpoint : Angela Merkel
Ghana is one of our most important trading partners in sub-Saharan Africa, but we know that much development potential remains untapped. German businesses are very interested in both trade with, and investment in, Ghana. However, the president rightly says that words alone do not achieve anything – they need to be followed by action.
In fact, the only thing that counts is what actually happens. The people of Ghana know that as well. Looking around at the young population, we know there is no time to waste, and that is why it is important that we have an open exchange of views in the time we have available.
During our G20 presidency in 2017, one of the initiatives we launched was the Compact with Africa. For us, the word “with” is an important one. We are not talking about a Compact for Africa, but with Africa. I believe that is the spirit in which we need to cooperate moving forward.
It goes without saying that business opportunities and risks are always weighed against each other. Better investment conditions – both for African and European companies – are needed in order to facilitate the decision to commit. As well as strengthening Africa as a location for investment, we have to make sure that trade relations between Europe and Africa are fair to all sides.
Working together to improve the conditions for investment and trade is the core idea behind the Compact with Africa. Our aim was to talk with, and not about, Africa. That is one of the key lessons we have learned from traditional development aid, which often did not produce the results we had hoped for. That is why we must engage in dialogue.
The Compact initiative is based on another, newer approach. It is about new forms of equal and long-term partnership, which benefit everyone involved to the same degree. Naturally, every country in Europe, just like every country in Africa, has its own unique features and its own attributes as a location for business and investment. Therefore, it is important that each Compact country improves its investment climate by carrying out its own reform measures. At the same time, each participating country should also say how it would like to be supported and what concrete support it needs on the path to reform.
The IMF, World Bank and African Development Bank are involved in this process – whether it be drawing up suitable reform measures for each individual country, or verifying that the Compact and partner countries implement their obligations.
Germany, as well, is playing its part via reform partnerships with various countries. I was able to find out more about this cooperation and gain a first-hand impression during my recent trip to Africa, and I can tell you that the first effects of this cooperation are already evident.
Although foreign direct investment in Africa as a whole has decreased during the last few years, it has increased in the Compact countries. I know that time is of the essence, and you have to get results quickly, because your population expects quick answers and quick results. We know that, and we are also trying to be quicker.
Investors will most likely have confidence wherever Compact countries have carried out reforms. This is reflected in the volume of direct investment. For many decades we were very closely focused on Asia, and I believe we have to pay more attention to Africa in the future years.
The German government wants to be of assistance in achieving this goal. In the case of trade with Ghana and Senegal, for example, there have been three guarantees in principle that have been granted for export credits totalling €160m.
The above is adapted from speeches given in 2018 in Accra in August and at the G20 Investment Summit.
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