05 Feb COVID-19 pandemic leaves Germany’s Africa policy in limbo
Germany’s Africa policy aimed to promote investment, create jobs, and prosperity for Africans, then came COVID, and the economy plummeted. To add salt to injury, the two German key architects of the policy are leaving.
An important date was missing from German Chancellor Angela Merkel’s calendar last year — the annual summit with African head of states .The meeting has become a routine in political Berlin since 2017.
German companies would not have been able to make many investment commitments anyway. “The corona 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,” says Günter Nooke, Chancellor Merkel’s Africa representative.
“A real Africa year was planned for 2020. In this aspect, the slump [due to COVID-19] was dramatic,” says Tilo Halaszovich, an economics professor at Jacobs University Bremen. Halaszovich conducted a study in which he spoke with 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 expand due to the impact of the pandemic.
Exports and trade are falling
Figures from the Deutsche Bundesbank also do not look well: 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 federal government still 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 or how strong this COVID-19 hits us,” Nooke told DW.
Many German companies are not finished with Africa either. Currently, the companies are in some sort of mute state, according to researcher Halaszovich. He thinks the German government should bring “quick support measures with relatively few administrative hurdles.”
What will become of the Germany-Africa policy?
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,” says Rob Floyd from the African Center for Economic Transformation (ACET) in Ghana.
This 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.
However, there is great uncertainty about how the Africa policy and programs will continue in the long term. General elections are due in September. Chancellor Angela Merkel and her development minister Gerd Müller, who are the two main architects of the new Africa policy, will leave their posts.
But Merkel’s Africa envoy Nooke has a strong conviction that Merkel’s policy could stay. “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 is unclear how much time and energy the German government will spend on Africa during the campaigns. “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 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.