Europe is missing its moment in Africa

As Brussels gears up for its second Global Gateway Forum — where the European Union will chart its global investment priorities through its flagship platform, particularly in Africa — the usual buzzwords are floating around: strategic investments, sustainable infrastructure, equal partnerships. These are not just empty phrases — Brussels deserves credit for putting Africa high on the agenda. But behind the polished language is a difficult pill to swallow, and a critical blind spot. To put it bluntly, Europe is neither exporting enough to Africa nor investing sufficiently in African businesses. EU exports to Africa in 2023 amounted to €170.4 billion, representing just under 3% of the EU’s total exports of goods, and in reverse, only about a quarter of Africa’s imports (by value) come from the European Union. Next to this, the EU’s foreign direct investment in the continent remains concentrated in a few sectors — extractives, finance, and infrastructure — and a handful of countries such as South Africa, Nigeria, Egypt, and Morocco. Too often, these flows come through short-term, risk-averse channels, delivering limited spillovers and barely scratching the surface of Africa’s economic potential. Enter the DFIs Now for the critical blind spot: In discussions about the “Global Gateway” — the EU’s investment and partnership strategy, which is seen as a values-driven alternative to initiatives such as China’s Belt and Road — the spotlight tends to fall on export credit Agencies and EU companies. While important, they rarely reach the places where investment can make the most difference. Development finance institutions do. If Europe wants to make strategic investments in frontier markets, it needs to make better use of the vehicles that know how to navigate complexity, manage risk, build trust, and create pathways for cooperation. Those vehicles are development finance institutions, such as the Dutch development bank FMO and its peers. A business case for Europe This approach is not charity; it’s a strategic decision to ensure Europe’s place at the global table. Europe’s external business ambitions will stall unless it works closely in tandem with the institutions that have the local knowledge and networks to build entrepreneurial ties within emerging markets. FMO brings this deep, specialized knowledge of local African markets, creating pathways for European companies to engage with high-growth sectors. Mind you, DFIs do not invest exclusively to benefit the EU. That would be shortsighted. Instead, we invest long-term in African (agri)businesses, renewable energy, and financial institutions, and through them in a wide range of small and medium-sized enterprises, the heart of innovation and entrepreneurship. These companies are willing business partners: competitive, agile, and ready to trade with Europe, if Europe shows up. By supporting them, we’re offering Europe’s citizens and its entrepreneurs stability, innovation, and market access, and ensuring Europe’s relevance in regions where China and other players are already deeply embedded. FMO’s investments pave the way for European businesses to gain a position that would otherwise be closed off. And yes, frontier markets are inherently complex, but they also offer growing markets and opportunities for all players in these ecosystems. DFIs mitigate risks through thorough due diligence, technical assistance, and blended finance where possible and needed — acting as more than financiers. We support companies through the various growth stages of their business, from nascent to ready for commercial investors. With each step, businesses grow stronger, and investment risks decrease as our customers expand and enhance their governance structures, as well as their environmental and social standards. By partnering with DFIs, European companies can enter these markets with confidence and impact. How it works in practice Take Ethiopia, for example. FMO, together with British International Investment, the U.K.’s DFI, became the first foreign financial institutions to invest directly in Ethiopia’s banking sector. In a landmark transaction, we provided a $40 million senior loan facility to Dashen Bank. The loan strategically supported agricultural exporters, including those in the coffee sector, by giving them access to scarce foreign currency to import machinery, a market where European manufacturers are well-positioned to offer specialized equipment. These imports, in turn, help farmers modernize operations and scale production. With global coffee prices soaring and Europe accounting for about 30% of global coffee consumption — as well as being the world’s largest importer of green coffee — it is easy to see how European companies and citizens can benefit from increased production, particularly through major coffee-importing ports such as those in Germany, Italy, Belgium, and Spain. Zooming in even more on Ethiopia, many parties are lining up to finance the plans for the new Addis Ababa airport, hard infrastructure that surely will benefit the economy. But what has also spurred rapid development in economies such as Ethiopia in the past few years is investments in the enabling infrastructure. Think of mobile money providers that make it easy to pay, save, and transact, leapfrogging the traditional bank account that many lack. Those are the kinds of investments DFIs can make, as we know how to blend public and private capital and de-risk early-stage projects. We don’t just fund — we enable. And this in turn makes us a partner in essential infrastructure, which lands the EU a seat at the table and creates tangible pathways for businesses to engage with high-potential markets. Making the Global Gateway work The Global Gateway offers a framework for such engagement, but it must evolve. It should prioritize long-term partnerships over short-term wins, and it must recognize the central role of DFIs in executing its vision. This means allocating resources, allowing DFIs to do their work without bureaucratic hurdles — like specific country or region focus — and advancing synergies between public and private groups. Only then can the Global Gateway become a true conduit for shared prosperity. If we overlook the innovators and changemakers in Africa and their needs, we miss the boat. And make no mistake: Others won’t.