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G20 and Africa: Mixed expectations

Daniel Pelz ew
June 8, 2017

The G20 wants to support private investments in Africa through a 'Compact with Africa.' The aim is to provide jobs and higher standards of living. But what do people in Africa think about the plan?

Mozambique - youths at a market
Image: DW/S. Lutxeque

Sidi Tiemoko Toure has clear expectations concerning the G20 Africa Partnership Conference to be held next week in Berlin. "I will ask them to help us deal with the issue of youth unemployment," the youth minister of Ivory Coast said in an interview with DW. "Our youth should no longer think of crossing the Mediterranean where they could possibly meet their death." Almost half the population in Ivory Coast lives below the poverty line. About 60 percent are below the age of 24. There are not enough jobs for them.

The Ivorian government hopes that the G20 meeting will bring about change. Ivory Coast is one of the five African countries that are participating in the new Compact with Africa. Partnerships are core to the G20 initiative. To be more attractive to investors, the African countries promise reforms. For many, that means a lot of work. Ivory Coast occupies position 142 on the "Doing Business" index of the World Bank. This looks at how good the underlying conditions are for companies in different countries worldwide. International organizations and G20 countries support African countries in this financially and technically. They also want to help in the search for investors. Speaking to DW, Senegal's president Macky Sall praised the Compact and called it "a strong commitment."

A man rides a motorbike along a muddy road in Mozambique
Africa needs more investments in infrastructureImage: DW/M. David

Kole Shettima also thinks the G20's commitment to Africa is a good idea. "Whether we look at electricity, whether we look at roads, railways or water supply, these are critical infrastructure deficits that we have on the continent," the Nigerian development expert told DW. Nigeria alone would need between 12 and 15 billion US dollars (10.7 to 13.3 billion euros) annually. Experts like Shettima hope that initiatives like the Compact can make the necessary investments available. "If we are able to fix some of the infrastructure challenges, the economy in this part of the world would change significantly," he said.

Experts seek reform of EU-Africa trade

Africa is still lagging far behind, not only in the expansion of infrastructure. The continent's population is set to double by 2050. Already there are not enough jobs. But Martin Tsonkeu is not convinced that the Compact will bring change. The development expert from Cameroon says it could be a good initiative but it all depends on how it will be implemented. "When you say private investments will bring jobs, what kind of jobs will private investment bring?" Tsonkeu asked. From the point of view of many experts, short term contracts and low salaries will not help to significantly reduce poverty in Africa. Investments must help the private economy in Africa to grow, says Tsonkeu "but we do not see this in the Compact."

African youth playing football in Accra
There should be more jobs for the african youth through the CompactImage: picture-alliance/Bildagentur-online/Runkel-MacPhoto

Moreover, the Compact excludes several important points, Tsonkeu added. "Africa urgently needs more trade within itself. But the Compact does not allow this. Maybe they think that investments automatically lead to more trade. What we need is a trade policy that benefits Africa." But so far this is missing - not only in the opinion of many development experts. "When I grow my cocoa and I sell it raw, the EU takes it without tariffs. But the minute I produce chocolate and try sell it to the EU, there is a 30 percent tariff,” Ghanaian businessman Tutu Agyare complained during a conference in Berlin a few weeks ago. "When I try to rear my chickens and start a poultry industry, I get all the leftover parts from the chicken pieces that are not required in Europe dumped in my country so that I cannot develop my own industries." Agare says there's no need to offer him a Compact from Germany, if trade issues are left out.

Martin Tsonkeu head of ADIN
Martin Tsonkeu is reserved when it comes to the Compact with AfricaImage: DW/D. Pelz

Will Africa profit from the investments?

The focus on private investors also does not please everyone. Ikal Angelei is the Program Coordinator of Friends of Lake Turkana, a Kenyan environmental organization. "We seem to have processes and procedures and frameworks of how to engage governments and international financial institutions when a project they are financing or supporting does not meet the due diligence standards,” he said. "However with private financing, that is where the gap is, because who then do you go to?"

Within the framework of the Compact program, private investors are not required to meet environmental or social standards - unless they participate in projects run by international organizations. African governments are themselves responsible for ensuring,for example, that the minimum wage is paid. Angelei does not think that this will happen. "Governments are corrupt. This is the reason why many companies come in… but then we allow these companies to offer bribes and corruption deals to our governments so that they can break the rules."

Many experts are keenly waiting for the moment when the exact terms of the agreement between African countries and Compact partners will be revealed. Only then will it be clear whether the Compact can really contribute to africa's economic development.

Dirke Köpp and Ubale Musa contributed to this article

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