Speech by German Chancellor Dr Angela Merkel at the G20 Investment Summit – German Business and the Compact with African countries
“The Compact initiative is based on another, a new approach. It’s about new forms of equal and long-term partnership which benefit everyone involved to the same degree.” said Angela Merkel in her opening address.
Speaker: German Federal Chancellor Angela Merkel
Date: Oct 30, 2018 11:13 hrs
Prime Ministers and Ministers,
Ladies and gentlemen,
I’m delighted to warmly welcome you all to Berlin today as members of the Compact with Africa initiative. And I’d like to sincerely thank the organisers of this conference: the German-African Business Association and the Sub-Saharan Africa Initiative of German Business.
Together, we want to send a clear message today that good and productive neighbourly relations between Africa and Europe are important to us. We’re neighbours, we’re partners – good economic prospects in African states are very much in the interest of us Europeans. That will require state but most especially also private investment. How we get from official aid to private investment is the major task we face – it’s also the modern development policy which our Minister Gerd Müller is pursuing.
It goes without saying that business opportunities and risks are always weighed up against each other. Better investment conditions – both for African and European companies – are needed in order to make the decision to commit easier. As well as strengthening Africa as a location for investment, we have to make sure that trade relations between Europe and Africa are fair. Working together to improve the conditions for investment and trade is the core idea behind the Compact with Africa and the reform partnerships concluded during Germany’s G20 Presidency in 2017. Our aim was to talk with and not about Africa. That’s also one of the key lessons we’ve learned from traditional development aid, which often didn’t produce the results we had hoped for. That’s why we have to engage in dialogue with you.
The Compact initiative is based on another, a new approach. It’s about new forms of equal and long-term partnership which benefit everyone involved to the same degree. Naturally, every country in Europe, just like every country in Africa, has its own unique features and its own attributes as a location for business and investment. It’s therefore important that each Compact country improves its investment climate by carrying out its own reform measures. On the other hand, however, each participating country should also say how it would like to be supported and what concrete support it needs on the path to reform.
The IMF, World Bank and African Development Bank are involved in this process – whether it be drawing up suitable reform measures for each individual country or verifying the implementation of the obligations of the Compact and partner countries.
Germany, too, is playing its part via reform partnerships with various countries. I was able to find out more about this cooperation, indeed to gain a first-hand impression, during my recent trip to Africa. I can tell you that the first effects are already evident. Although foreign direct investment in Africa as a whole has decreased during the last few years, it has increased in the Compact countries. I know that time is of the essence to all of you. You have to get results quickly because your population expects quick answers and quick results. We know that. That’s why we, too, are trying to be quicker.
Investors will most likely have confidence wherever Compact countries have carried out reforms. As I pointed out, this is reflected in the volume of direct investment. I’d therefore like to express my sincere thanks to companies and investors who will be presenting their investment projects today. You’re contributing to Africa’s economic development. And you’re setting an example for others, encouraging them to take a closer look at this continent with its 54 countries and its huge potential for growth. We were very much focused on Asia for many decades. I believe we have to pay more attention to Africa in future.
The German Government wants to be of assistance here. In the case of trade with Ghana and Senegal, for example, three guarantees in principle have been granted for export credits totalling 160 million euros.
The German Government has considered how we can get further measures off the ground.
We intend to establish a development investment fund for small and medium-sized enterprises; for both European and African companies. The idea is to ensure that investments and loans can be financed in order, for example, to enable companies to enter new markets.
We want to do more to safeguard exports and investments by German companies in the Compact countries against political as well as non-payment risks. Of course, our measures always hinge on the progress of the reforms and the debt sustainability of each individual country. I have to tell you that the state won’t be able to assume all of the risk. However, we want to offer more than we have done in the past.
This will make it possible, for instance, to ensure that companies or investors are not subject to double taxation. That’s why we attach so much importance to double taxation agreements, which we’ve already concluded with five Compact countries. We’re negotiating with three others. I hope that more such agreements can be concluded. And I’d like to add that we for our part are doing everything we can to ensure that these negotiations take place quickly.
Furthermore, we want to see new work and vocational Training partnerships with companies and institutions in Africa. This is about developing certain branches in suitable locations by, for example, promoting the establishment of regional industrial and commercial parks.
Not least, we’re seeking new bilateral reform partnerships with Senegal, Morocco and Ethiopia.
These are the key elements of the package of measures we want to get underway. We see this as a means of complementing and further developing the Compact with Africa initiative. This conference highlights our desire to engage in and revitalise cooperation based on partnership. Improving investment conditions is of vital importance to this. It’s in our shared interest.
I would like to thank you all once more for coming here and am now looking forward to what I can see and experience at this business forum.