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Germany's Africa policy in limbo due to COVID-19

Daniel Pelz
February 5, 2021

Germany's Africa policy was meant to promote investment and create prosperity for Africans. Then came COVID-19, and the economy plummeted. Now two key architects of the policy are leaving.

Merkel standing along with African leaders
The Germany-Africa Summit which has been held each year since 2017 did not take place in 2020Image: Reuters/F. Bensch

An important date was missing from German Chancellor Angela Merkel's calendar last year — the annual summit with African Heads of States and Germany's business elites. The meeting has become a routine in Berlin since 2017.

German companies would not have been able to make many investment commitments anyway. "The coronavirus pandemic is having a significant impact in Africa due to lockdowns in almost all countries and the consequences of the measures we have taken to combat the pandemic," said Günter Nooke, Merkel's Africa representative.

Edith Kahbang Walla and Günter Nooke
Günter Nooke, Germany's Africa representative, is urging Berlin not to put Africa behindImage: DW/Dirke Köpp

"A real Africa year was planned for 2020. In this respect, the slump [due to COVID-19] was dramatic," says Tilo Halaszovich, economics professor at Jacobs University Bremen. Halaszovich conducted a study of 100 German companies that do business in Africa. The result: 75% wanted to expand their business activities on the continent in 2020. But in the end, only 13% managed to due to the impact of the pandemic.

VW Africa boss with African mechanics.
Before the coronavirus pandemic, German companies were starting to invest in AfricaImage: DW/S. Schlindwein

Exports and trade are falling

Figures from Germany's investment bank do not look good either: German net direct investments in sub-Saharan Africa from January to September 2020 were €698 million ($840 million) — around €171 million less than in the same period in 2019.

Nevertheless, the government wants to stick to its policy. "Concentrating on investments by private companies in Africa and on self-sustaining economic development remain the right thing to do, irrespective of the pandemic that comes our way," Nooke told DW.

President Paul Kagame and Merkel shake hands
Angela Merkel has been keen on promoting private investment in AfricaImage: Getty Images/AFP/T. Schwarz

Many German companies are not finished with Africa either. Currently, the companies are in some sort of suspended state, according to researcher Halaszovich. He thinks the German government should bring "quick support measures with relatively few administrative hurdles."

What will become of Germany's plans for Africa?

Although that will not be enough to bring additional companies to Africa, it is exactly Berlin's declared intentions. "The German government should continue to present attractive opportunities to German companies so they can create the necessary jobs in Africa," said Rob Floyd from the African Center for Economic Transformation (ACET) in Ghana.

That includes investment summits with African political heavyweights but also programs not widely known by the public. For example, Germany's Ministry of Economic Affairs and Development has set up extensive advisory networks that inform German companies about market and funding opportunities in Africa.

But there is great uncertainty about how the Africa policy and programs will continue in the long term. General elections are due in September, and Merkel and her Development Minister Gerd Müller, the two main architects of the Africa policy, will leave their posts.

 Germany's Development Minister Gerd Müller
Germany's Development Minister Gerd Müller is set to leave his post after September's electionImage: Bernd von Jutrczenka/dpa/picture-alliance

But Nooke is convinced that Merkel's policy could stay in place under a new administration. "The things that have been initiated, the changed thinking, the stronger focus on economic development, on private investments, on infrastructure expansion — that must and will not only depend on the chancellor or Development Minister Müller," Nooke said. Most of the other key architects of Merkel's Africa policy in the ministries, business associations, and development organizations are likely to stay.

Merkel's legacy in Africa

It remains uncertain how much time and energy the German government will spend on Africa during an election year.

"Battling the pandemic and the economic and social consequences will dominate the election campaign," Africa researcher Robert Kappel told DW. "The Africa policy is fading even further into the background."

Many projects, such as the Compact with Africa and Marshall Plan with Africa, are long-term projects that were enacted to bring reforms in Germany and Africa. Many have been initiated but are far from being implemented.

For instance, the Compact program was limited to a few partner countries in Africa to fight inflation, corruption, and to reduce budget deficits: "It is important that the reform partnerships are strengthened and continued. Only through ongoing reforms will investors feel secure and investments will continue," Floyd said.

But no one knows whether a new federal government will continue to finance and support these programs.

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This article was originally written in German and adapted by Abu-Bakarr Jalloh.