Struggle for Influence in Africa

BERLIN |

BERLIN (Own report) - Overshadowed by the dispute on free trade and the Paris Climate Agreement, the German government has found acceptance for its Africa policy initiatives at the G20 summit in Hamburg. The G20 states in Hamburg have backed the "Compact with Africa" initiative, Berlin seeks to use for gaining new influence on the African continent. The "Compact" includes measures enabling industrial nations, such as Germany, to set their preferred conditions for investments in individual African countries. The German government has chosen Tunisia, Ghana and Côte d'Ivoire as its partners. Whereas Tunisia already serves as a low-wage site for German enterprises, Côte d'Ivoire is still under decisive French influence, something Berlin would like to change with the help of its "Compact for Africa." In general, "Compact" is intended to help Germany intensify its economic influence in Africa, following all the failed attempts over the past few years. From the perspective of Germany's establishment, time is running out because China, the rival on the global stage, has already risen to become the most important economic partner for numerous African countries.

Double Background

The German government's effort to enhance German enterprises' prospects on the African continent with the "Compact with Africa" has two reasons: The failure of Berlin's previous attempts to expand its influence in Africa, and the fact that its rival, China, has been enhancing its position rapidly and massively to become, today, the most important economic cooperation partner for many African countries.

Ever "New Phases"

Since the beginning of the new millennium, Germany has had no shortage of appeals to intensify economic cooperation with African countries. Already in 2000, Joseph Fisher, Foreign Minister at the time, promised "a new phase of cooperation."[1] His successor, Frank-Walter Steinmeier, also repeatedly devoted himself to Africa and declared, for example in 2008, "we will expand the network of foreign trade chambers to strengthen economic cooperation."[2] At the time, Steinmeier was supported by President Horst Köhler, who had focused his work on intensifying cooperation with African countries. In 2013, Foreign Minster Guido Westerwelle promoted Africa as a continent "full of opportunities."[3] Steinmeier followed suit, declaring in early 2014 that "more attention" will be devoted to Africa in the future.[4] The repeated appeals have not generated many results. According to the Federal Statistical Office, the share of African trade in Germany's total foreign trade was just about two percent - as much as in 2000.

China's Clean Sweep

The stagnation in the international struggle for influence in Africa is all the more onerous for Berlin, since China - a political rival on the world stage - has been able to achieve astonishing success on the African continent over the past few years. In a comprehensive study, the McKinsey advisory company, sought, last June, to make an assessment of China's economic impact in Africa.[5] According to the study, more than 10,000 Chinese-owned firms are operating in Africa today, of which only ten percent are state-owned. According to McKinsey, around 12 percent of Africa’s industrial production is already handled by Chinese firms. In infrastructure, Chinese firms’ dominance is even more pronounced, and they claim nearly 50 percent of Africa’s internationally contracted construction market. 89 percent of the employees were African; 44 percent of local managers were African; nearly two-thirds of Chinese employers provide some kind of skills training. Chinese-owned businesses already employ several million Africans, and make a significant contribution to elevating the educational level. German companies are nowhere near keeping pace - not even in trade. Whereas, Chinese-African trade came to more than US $300 billion last year, the German-African trade volume was only around 41 billion Euros.

"Compact with Africa"

Several German ministries have recently launched new initiatives to gain ground. Germany's Ministry for Economic Cooperation and Development has conceived a "Marshall Plan with Africa;" the Ministry of Economy has consolidated some of its existing programs into a "Pro! Africa Initiative." In addition, Germany's Ministry of Finance has developed a "Compact with Africa," which is supposed to be implemented with the help of the G20. The plan foresees that individual African nations, in consultation with individual G20 countries, will "enhance the conditions for private investments," in other words, allow the powerful industrial nations to set the conditions for investments in the designated African countries. Countries of no economic interest to the industrial nations will be practically excluded from taking part in the "Compact with Africa." Seven African countries so far are available for this program;[6] As it currently stands, Germany will be cooperating with Tunisia, Ghana, and the Côte d'Ivoire. Tunisia already serves as a low-wage offshore site for many German companies; (german-foreign-policy.com reported.[7]) In Berlin, Ghana is considered to be politically - and with its new government - also economically ready for cooperation.[8]

Into Françafrique

Revealing is the fact that within the framework of the "Compact with Africa," Berlin will be cooperating in the future with Côte d'Ivoire. According to the assessment made by Berlin's Germany Trade and Invest (gtai) foreign business agency, Côte d'Ivoire is not only "currently one of the few growth markets in Africa," it offers "numerous supply and investment opportunities with its rather broad-based economy."[9] Following the civil-war-like unrest in late 2010 - early 2011, the capital, Abidjan, is "in the process of retaking its role as Francophone West Africa's industrial hub." It is true that French influence - like everywhere else in Françafrique - is decisively strong, but Côte d'Ivoire is currently seeking to "intensify economic relations with Germany." The exclusive cooperation between Berlin and Abidjan within the framework of the "Compact with Africa" could prove a suitable means for reinforcing German positions in France's West African sphere of influence - similar to the Sahel, where the military is playing a growing role in Germany's power struggle with France.[10] Having a stronger influence in the Côte d'Ivoire would have an impact on the entire region: "Burkina Faso, Mali, Niger, Togo and Benin can be supplied from Abidjan," gtai explains.

Bundled Initiatives

In June, in an effort to prevent the initiatives to win influence - including the "Compact with Africa" - from waning like the previous initiatives over the past 17 years, the German government published a "benchmark paper" entitled "Economic Development of Africa - Challenges and Options."[11] The paper makes a résumé of all of the individual measures, ordering them into three main areas of focus. First, the financing structures of African nations should be improved. Second, the German foreign trade promotion should be intensified. Third, Germany's so-called development policy should be placed more at the disposal of trade and investment, the document suggests. This year alone, the ministry for development is providing up to €300 million for German efforts in the context of the "Compact with Africa." "We want to pursue a comprehensive Africa policy approach that is coherent, and is coordinated within the German government as well as in the international or multilateral context," explains the paper, which was drawn up by state secretaries from the Chancellery, the Ministries for Foreign Affairs, of Finance, of the Economy, of Education and for Nature Conservation. In the future, these state secretaries are expected to regularly meet to assess progress in the implementation of the measures - for the expansion of German influence in Africa.

[1] Fischer läutet neue Afrika-Politik ein. www.spiegel.de 30.03.2000.
[2] Rede von BM Steinmeier anlässlich eines Mittagessens für afrikanische Delegationsleiter am 23.09.2008.
[3] Sarah Steffen: Westerwelle will Aufmerksamkeit für Afrika. www.dw.com 29.04.2013.
[4] Steinmeier treibt neues Afrika-Konzept voran. www.handelsblatt.com 14.02.2014.
[5] McKinsey and Company: Dance of the lions and dragons. How are Africa and China engaging, and how will the partnership evolve? June 2017.
[6] This pertains to Ethiopia, Côte d'Ivoire, Ghana, Morocco, Rwanda, Senegal und Tunisia.
[7] See For the Benefit of the Tunesian People (I) and For the Benefit of the Tunesian People (II).
[8] See Global Europe and Oil for Arms Exports.
[9] Carsten Ehlers: Wirtschaftstrends Jahresmitte 2016 - Côte d'Ivoire. www.gtai.de 22.06.2016.
[10] See Die Militarisierung des Sahel.
[11] Wirtschaftliche Entwicklung Afrikas - Herausforderungen und Optionen. www.bundesregierung.de.