On November 19, 2019, Chancellor Angela Merkel welcomed Heads of State and Government of all Compact with Africa (CwA) countries and the Heads of International financial institutions participating in the CwA initiative to a high-level dialogue in Berlin to discuss opportunities to enhance the business environment and increase investment in African countries.
At the opening of the conference, Chancellor Merkel pointed to the importance of good relations between Germany and Africa because Africans and Europeans are facing many common challenges.
Reliable financial and tax system
The aim of the CwA initiative is to trigger a “self-sustaining economic upswing. To this end, investments by European investors, especially German investors, in African countries must be encouraged. However, for many possible investors, the business climate in several African countries is not conducive enough.
Therefore, the financial and tax system in Africa needs to be made more reliable for international investors. More transparency will bring more investments for these countries especially in light of the very ambitious agenda of the AfCFTA agenda that the African countries have set themselves.
Investment funds on three pillars
Germany has set up an investment fund as incentives for the CwA countries. The fund is based on three pillars:
- The AfricaConnect program aims at fostering investment by European companies in African countries through targeted funding opportunities. Since June there 2019 already more than 220 requests have been submitted, soon the first commitments will be made.
- The Business Network Africa will advise German companies on funding opportunities and the economic and legal framework conditions of African countries.
- The Development Investment Fund ”Africa Grow“ will offer small and medium-sized enterprises and start-ups in Africa better opportunities to raise funds through a fund of funds design.
New Investments in Ghana
Two new investments in Ghana were signed at the Summit:
- FairAfric will set up a sustainable chocolate production capacity in the Central Region of Ghana
- DTRT apparel will expand its textiles production by creating 1,500 additional jobs in Greater Accra.
Germany has made the conditions for export and investment guarantees more attractive. Since 2018, exports to compact countries alone have been secured by federal guarantees amounting to 330 million euros.
In addition, new opportunities for cooperation in the field of digital and vocational education which would provide about 100,000 jobs and training for about 30,000 young people, have been created for investor companies.
The Summit was complemented by an investor conference dubbed ”G20 Investment Summit 2019 - German Business and the CwA Countries“.