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Analysts recommend African Marshall Plan

Daniel Pelz
November 11, 2016

The United States helped to rebuild Europe after World War Two. Germany's development minister wants a similar initiative to kick-start African development.

Development minister Gerd Müller reading a copy of the study before the press briefing
Image: picture-alliance/Sebastian Gol

A study by the Club of Rome think tank and the Senate of the Economy (Senat der Wirtschaft) business network is calling for a 120 billion euro ($130 billion) stimulus package from Germany to increase economic growth in Africa, generate wealth for the continent's growing population and create jobs for its youth.

"Germany is currently only spending 2 euros per head in Africa on development issues," said Franz Josef Radermacher, president of the Senate of the Economy, while presenting the joint study to German Minister of  Eonomic Cooperation and  Development, Gerd Müller in Berlin on Friday.

"That means that we have to dramatically increase the financial resources we're spending," Radermacher said.

The study proposes that a share of the funds required could be raised on capital markets, with the German government providing guarantees for investors. Other European countries would top up Germany's 120 billion euro capital injection, the study suggests.

"The funds could kick-start the production of wealth on the continent if we use the funds wisely, especially for the development of infrastructure and the industrial sector," added Radermacher, who coordinated the study. 

The study notes Africa's enormous potential in areas such as agriculture and renewable energy. It calls for the construction of solar power stations in Africa which would not only create jobs, but also solve the continent's persistent power problems.

Workers gather unter two huge solar panels
Club of Rome and Senate of the Economy are calling for more investment in solar energy in Africa Image: Imago/Nature Picture Library

The study also recommends the extension of humanitarian programs for refugees and internal displaced persons.

Germany's development minister Gerd Müller has repeatedly touted the idea of a Marshall plan to reduce Africa's dramatic poverty levels.

The original Marshall plan, a United States' initiative to rebuild Europe's shattered economies after World War II, included loans, grants and other assistance worth $14 billion.

Fighting poverty in Africa with an initiative similar to the Marshall plan was more than just a moral obligation, the German development said at the presentation of the study.

'No new neocolonialism'

"We have to invest in these countries, we have to give people perspectives. Otherwise we won't just have hundreds of thousands but millions of people fleeing their countries in a few decades," he said.

Müller insisted that the plan would not be yet another Western development initiative which ignored Africa's needs and interests, a criticism often levelled against Western development programs by both African and European experts.

"It's about strengthening and developing Africa's own potential. It's not about us going to Africa with our plans and our finances and saying that's how it has got to be done. There will be no new neocolonialism, Müller said.

While Germany's government would work on new mechanisms to safeguard investment in Africa countries, African countries would have to contribute by improving the climate for investment, promoting good governance and fighting corruption, Müller said.

Deutschland Studie Club of Rome & Entwicklungsminister Gerd Müller
Development Minister Gerd Müller has promised to present his proposals for Africa in a few weeksImage: picture-alliance/Sebastian Gol

"African countries must ensure reliability and uphold the principle of legal certainty," Müller said.

Is the plan going to become reality?

Despite the minister's promise to present his vision for a Marshall plan for Africa in the near future, it is unclear whether the plan will ever materialize.

German Chancellor Angela Merkel has rejected the idea of an African Marshall plan. During a visit to Niger last month, she told President Mahmadou Issoufou that the conditions prevailing in Africa today "were totally different to those in Europe after World War II."

There is also another factor. 2017 will be an election year in Germany. Campaigning is likely to be dominated by domestic terrorism worries, pensions and the rising cost of health care. It is therefore unlikely that the government will devote time to a policy initiative on  a different, if not distant, continent in the foreseeable future.