43 percent of the companies that belong to the Africa Association are planning higher investments there than in the year just ended. Another 39 percent want to keep their spending stable, only seven percent plan to decrease it. “Most of the companies want to expand their activities in the coming year,” said the chief executive of the Africa Association, Christoph Kannegiesser of the news agency Reuters.
“That makes sense, because the continent is still on a growth path.” In the year just ended, 56 percent of the companies gave a positive assessment of their Africa business, and a further seven percent even rated the course of business as “very good”.
Kannegiesser sees a particularly large number of opportunities from the energy transition, from which countries rich in raw materials and sun are likely to benefit. “The area of green hydrogen and liquid gas will lead to new impetus in many countries,” he said. In countries like Senegal, Nigeria or Mauritania, this requires investments. “If the overall economic situation improves there, that will also be an opportunity for our companies,” said the managing director.
Namibia, for example, could benefit massively from the production of green hydrogen. “Gross domestic product could double there, German direct investments could approach the level in South Africa. This is a game changer for this country.” Mauritania, Morocco and Egypt could also benefit considerably from this, as could countries along the Atlantic coast, because transport by ship to Europe is easily feasible and the climatic conditions are right.
In order not to leave Africa business to China and the USA, the German economy is demanding more support from politicians. “German companies that want to get involved in Africa repeatedly encounter hurdles, which include financing bottlenecks,” said Kannegiesser.
Foreign trade and investments should be promoted more, for example through improved conditions for export credit insurance and investment guarantees. Around a third of the companies surveyed support the former.
The association criticizes the supply chain law that will come into force on January 1st – which obliges large companies to take action against human rights violations and environmental violations by their suppliers – as counterproductive. “This means a new wave of bureaucracy for companies,” said Kannegiesser. “This is far from stimulating exposure to markets that are considered risky.”
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The original of this article “German companies want to invest in Africa” comes from Deutsche Welle.
