G20 Africa summit seeks greater private investment in Africa

German Chancellor Angela Merkel speaking at the G20 Africa Partnership conference held in Berlin. Photo by: Thomas Koehler / photothek.net / G20 Finance

Germany used its G-20 presidency to call on governments and business to boost private investment in Africa, during a two-day conference with leaders from the continent in Berlin this week.

The meeting highlighted Germany’s bid to use its G-20 presidency to urge donors to move beyond traditional development assistance and toward more private investment in African countries. The conference, themed “Investing in a Common Future,” comes ahead of next month’s G-20 summit in Hamburg.

"We need an initiative that does not talk about Africa, but with Africa,” Chancellor Angela Merkel said at the launch of the gathering. Attendees to the gathering included African heads of state, representatives from the G-20 nations, and leaders of international financial institutions and global corporations.

The African leaders present, including the heads of Egypt, Mali, Tunisia and Guinea, echoed the conference theme in their remarks. Rwandan President Paul Kagame praised the German effort to position encouraging commercial investments at the center of the G-20’s African agenda.

“We are on the same page that traditional aid, while useful, is never going to be enough to bring about sustainable development,” he said during his address to the conference. “We are at the limit of what government-to-government action alone can achieve.”

He called for help in reducing bureaucracy and in encouraging private-sector assistance, especially in areas of infrastructure and telecommunications.

Along with this week’s conference, German officials are using the G-20 to support several plans to overhaul the relationship between traditional donors and African countries. The Ministry for Economic Cooperation and Development, one of the conference co-organizers, has released what is being called a “Marshall Plan with Africa,” which charts a broad overhaul of Germany’s involvement with the continent.

Fellow conference organizers from the Finance Ministry are pushing the G-20’s “Compact with Africa,” which focuses largely on improving conditions for private investment on the continent. The Business 20, the private-sector engagement facility within the G-20, released 10 high-level recommendations to help facilitate investment. These include improving both business-related benchmarks such as the foreign direct investment climate, as well as socially-minded indicators, including health access and inclusion.

Germany's 'Marshall Plan with Africa'

Germany's development ministry has released an ambitious, private-sector oriented "Marshall Plan" to re-write the country's engagement with the African continent. The proposal comes as Germany prepares to take a stronger lead in shaping donor policy ahead of hosting the G-20 summit.

German development officials announced three “reform partnerships” with Tunisia, Côte d’Ivoire and Ghana at the summit, part of a broader 300 million euros ($336.5 million) investment toward easing the process of setting up and operating businesses on the continent.

The partnerships, which involve the G-20, the World Bank, the International Monetary Fund and the African Development Bank, are focused on job creation. The programs will specifically seek improvements in energy efficiency and reforms to the finance and banking sectors in the three countries.

This emphasis on investment is directly linked to immigration and security concerns, as German Chancellor Angela Merkel was careful to underscore in her opening remarks. Germany has received record numbers of asylum seekers, including from African countries, in recent years.

“If the lack of hope is too great in Africa, then of course there will be young people who believe they have to seek a new life somewhere else in the world,” she said.

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    Andrew Green

    Andrew Green is a Devex Contributor based in Berlin. He writes regularly about global health and human rights issues. He has also worked as Voice of America’s South Sudan bureau chief and as the Center for Public Integrity’s web editor.