Interview: Brigitte Zypries
What can be done to encourage greater investment in Africa from German businesses?
BRIGITTE ZYPRIES: My visit to Kenya for the German-African Business Summit in early 2017 reminded me of just how high the level of interest in the African market has become. There is a lot of potential that we want to take advantage of. To this end, the German government is using a broad range of targeted instruments to back the involvement of German firms in Africa.
For example, we have broadened the possibilities for German exporters to obtain export credit insurance for deliveries to selected countries in sub-Saharan Africa. Bilateral investment treaties promote foreign investment, enabling us to back German projects in Africa with state investment guarantees. There are nine bilateral chambers of commerce and delegates’ offices for German business in Africa, and we intend to increase the number in sub-Saharan Africa. These are to be complemented by sector-specific centres of excellence focusing on various regions. They will directly help local firms and thus stimulate higher investment.
Which sectors are the most attractive to German investors in East Africa?
ZYPRIES: Many countries in Africa are aiming to diversify their economies, and they need plants, machinery, infrastructure and a skilled workforce to achieve this. These are all strengths of the German economy. That is why German companies are feeding their expertise into sectors like energy, car manufacturing and construction materials in particular. Beyond this, German investors are moving into the processing of raw materials and the agriculture and food industry in Africa.
How attractive is the business environment in Africa for German investors?
ZYPRIES: The business environment continues to be the biggest challenge facing German investment. Our companies look for a reliable legal system, transparent administration and equal treatment for domestic and foreign companies, and of course this includes the observance of international human rights. Where these conditions apply, Africa is an interesting place for German firms to invest. Whenever I visit the region, I always draw attention to these aspects. The continent is very high up on Germany’s agenda, and we will be using our G20 presidency to mobilise more capital for investment in Africa.
What lessons can be learned from the integration difficulties faced by the European project?
ZYPRIES: The European project is a unique success story. Countries that previously waged bitter wars against one another are now close political partners and benefit from close economic cooperation because of what is the largest cohesive economic area in the world. The subsidiarity principle is an important part of the European experience. It means that, wherever possible, responsibilities should be exercised at local level. However, for challenges that cut across the regions we need joint solutions from a supra-national organisation like the EU. All of the decisions taken by the EU are ultimately rooted in a willingness to compromise, and this requires a mutual understanding of one another’s needs and a balancing of interests and dialogue.
How can Germany help expand the capacity of East Africa’s human capital?
ZYPRIES: One important basis for the reputation enjoyed by German products is their high quality, and a major factor underpinning this is Germany’s dual system of vocational training, which provides training both in college and at work. Our system is an advantage which German firms are taking to Africa, generating added value for the region. For example, Volkswagen and Krones, a plant manufacturer, has presented plans for a technical training centre in Kenya, and the German government is also helping to provide practical training.