BERLIN (Own report) – Overshadowed by the dispute on free trade and the Paris Climate Agreement, the German government has found acceptance for its Africa policy initiatives at the G20 summit in Hamburg. The G20 states in Hamburg have backed the “Compact with Africa” initiative, Berlin seeks to use for gaining new influence on the African continent. The “Compact” includes measures enabling industrial nations, such as Germany, to set their preferred conditions for investments in individual African countries. The German government has chosen Tunisia, Ghana and Côte d’Ivoire as its partners. Whereas Tunisia already serves as a low-wage site for German enterprises, Côte d’Ivoire is still under decisive French influence, something Berlin would like to change with the help of its “Compact for Africa.” In general, “Compact” is intended to help Germany intensify its economic influence in Africa, following all the failed attempts over the past few years. From the perspective of Germany’s establishment, time is running out because China, the rival on the global stage, has already risen to become the most important economic partner for numerous African countries.
The German government’s effort to enhance German enterprises’ prospects on the African continent with the “Compact with Africa” has two reasons: The failure of Berlin’s previous attempts to expand its influence in Africa, and the fact that its rival, China, has been enhancing its position rapidly and massively to become, today, the most important economic cooperation partner for many African countries.
Ever “New Phases”
China’s Clean Sweep
The stagnation in the international struggle for influence in Africa is all the more onerous for Berlin, since China – a political rival on the world stage – has been able to achieve astonishing success on the African continent over the past few years. In a comprehensive study, the McKinsey advisory company, sought, last June, to make an assessment of China’s economic impact in Africa. According to the study, more than 10,000 Chinese-owned firms are operating in Africa today, of which only ten percent are state-owned. According to McKinsey, around 12 percent of Africa’s industrial production is already handled by Chinese firms. In infrastructure, Chinese firms’ dominance is even more pronounced, and they claim nearly 50 percent of Africa’s internationally contracted construction market. 89 percent of the employees were African; 44 percent of local managers were African; nearly two-thirds of Chinese employers provide some kind of skills training. Chinese-owned businesses already employ several million Africans, and make a significant contribution to elevating the educational level. German companies are nowhere near keeping pace – not even in trade. Whereas, Chinese-African trade came to more than US $300 billion last year, the German-African trade volume was only around 41 billion Euros.
“Compact with Africa”
Several German ministries have recently launched new initiatives to gain ground. Germany’s Ministry for Economic Cooperation and Development has conceived a “Marshall Plan with Africa;” the Ministry of Economy has consolidated some of its existing programs into a “Pro! Africa Initiative.” In addition, Germany’s Ministry of Finance has developed a “Compact with Africa,” which is supposed to be implemented with the help of the G20. The plan foresees that individual African nations, in consultation with individual G20 countries, will “enhance the conditions for private investments,” in other words, allow the powerful industrial nations to set the conditions for investments in the designated African countries. Countries of no economic interest to the industrial nations will be practically excluded from taking part in the “Compact with Africa.” Seven African countries so far are available for this program; As it currently stands, Germany will be cooperating with Tunisia, Ghana, and the Côte d’Ivoire. Tunisia already serves as a low-wage offshore site for many German companies; (german-foreign-policy.com reported.) In Berlin, Ghana is considered to be politically – and with its new government – also economically ready for cooperation.