German Minister for Economy Altmaier said: “The private sector plays a key role for Africa's economic development. The German government is supporting the commitment of German enterprises to the African continent by granting export credit guarantees.”
The improvement of the conditions is already having an impact: At 1.09 billion Euro, the volume of coverage for Africa more than doubled in the first six months compared with the corresponding pre-year period (1st half-year 2017: 0.44 billion Euro); it has already exceeded the level of the whole previous year (2017: 1.07 billion Euro). Sub-Saharan Africa accounted for 0.55 billion Euro (2017: 0.25 billion Euro). The top five destinations were Burundi, South Africa, Kenya, Angola and Benin.
The German government's latest decision – to reduce the deductible for selected transactions with African countries from ten to five percent – has been particularly successful. Only a few weeks after this decision, the German government is backing two large-scale export transactions with export credit guarantees. In the context of one project, it is supporting exports of distributed solar installations and energy storage facilities to Senegal. The aim is to secure energy supply for 300 villages in the coming years. In the context of the second transaction, the German government is covering the sale of ambulances to Ghana.
In order to facilitate exports to Africa, at the beginning of June 2018 the German government reduced the deductible for insurance coverage for transactions with the public sector in the countries that have improved the environment for private investment in the context of the G20 initiative “Compact with Africa”.
This reduced deductible applies to the insurance of supplies to and services for Côte d’Ivoire and Senegal, and – under certain conditions – Ethiopia, Ghana and Rwanda. Provided that the political and economic situation permits, the German government will extend this provision to additional countries in Sub-Saharan Africa.
State coverage for transactions with other countries has also increased: in the first half-year of 2017, demand for export credit guarantees for transactions rose worldwide due to uncertainties on major export markets. As a consequence, the German government granted guarantees for new transactions totalling 8.1 billion Euro (+5.7 percent), 77 percent thereof for transactions with emerging economies and developing countries.