German Chancellor Angela Merkel pledged on Tuesday, 30 October 2018, a new development fund to tackle unemployment in Africa, a problem spurring the mass migration that has shaped her long premiership as it nears its end.

Merkel hosted a summit of African leaders a day after her announcement that she would retire from politics by 2021, which sent shockwaves across Europe and started a race to succeed her.

She needs the Compact with Africa summit to show that progress has been made in addressing the aftermath of one of the defining moments of her 13 years in power: her 2015 decision to open Germany’s doors to more than a million asylum seekers.

The Berlin summit, attended by 12 presidents and prime ministers including Egypt’s Abdel Fattah al-Sisi, South Africa’s Cyril Ramaphosa, Ethiopia’s Abiy Ahmed and Rwanda’s Paul Kagame, was designed to showcase the continent as a stable destination for German investment.

International Monetary Fund Managing Director Christine Lagarde was also there, along with a host of international development officials.

The aim was to create good jobs for Africans, easing the poverty which, along with political instability and violence, has encouraged large numbers to head for Europe. But with Africa’s population growing at almost three percent a year, the task is enormous.

“We Europeans have a great interest in African states having a bright economic outlook,” Merkel said in her opening speech, announcing the fund to help small and medium-sized enterprises from both Europe and Africa to invest on the continent.

The 119,000 Africans who arrived in Europe in 2018, according to the International Organisation for Migration, are the tip of the iceberg. International Labour Organisation figures show that 16 million migrants were on the move within Africa in 2014.

While European Union countries invested $22 billion in Africa in 2017, breakneck economic growth will be needed to help bring down the migrant numbers.

Berlin hopes Germany’s manufacturing-based economy, which drove Eastern Europe’s rapid economic growth after the 1989 collapse of Communism, could turn things round.

Merkel needs results fast if she is to ensure the leadership of her Christian Democrats passes to a centrist ally, such as its general secretary, Annegret Kramp-Karrenbauer.

A Marshall plan for Africa?

Other candidates for the party leadership, including Health Minister Jens Spahn or her old rival, the strongly pro-business Friedrich Merz, are well to her right politically and could be expected to want to challenge much of her legacy.

Merkel has said she will remain chancellor but that her current, fourth term up to 2021 will be her last. A whopping 71% of Germans welcomed Merkel’s decision, a poll released Tuesday by broadcasters RTL and n-tv showed.

Germany has introduced tax incentives for its companies to set up plants in Africa, reflecting her view that state aid must give way to private investment if jobs are to be created in their millions.

This would be part of a pdf “Marshall Plan for Africa” (1.58 MB) – named after the US-funded plan that helped to rebuild European states including Germany after World War Two – that she sees as central to her legacy.

Merkel presented her decision to open Germany’s borders in 2015 as an unavoidable necessity driven by the vast scale of the human tide, that year mostly fleeing the civil war in Syria.

An agreement with Turkey sharply curtailed the arrival of refugees into the EU through Greece. But hundreds of thousands of mainly African migrants continued to travel across the Mediterranean, a flow that finally began to abate in the past year with improved efforts to halt smuggling from Libya.

The crisis has upturned European politics, bringing the far right to power in Italy and Austria, and in Germany revitalising the Alternative for Germany (AfD) party, whose demand that the country shut its borders to migrants helped to fuel its surge into parliament in last year’s election.

A successful outcome to the summit may help to strengthen Merkel’s case for remaining chancellor even after stepping down from the party leadership, and could quieten her coalition partners in Bavaria’s conservative CSU and the Social Democrats (SPD).

All three parties have suffered punishing setbacks in regional elections this month, building internal party pressure for them to switch leaders or break up the coalition.

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How Germany and Africa work together

The German government is engaged in many different ways in Africa, where it enjoys close cooperation with equal partners in the interests of sound political and economic development. Many of the worldwide challenges Europe faces can only be resolved by working with its neighbouring continent.

Africa’s potential is enormous. About half of the world’s 20 fastest growing economies are in Africa. By 2035 Africa will have the largest potential workforce in the world.

What is the Compact with Africa?

Last year, the Compact with Africa was launched – under Germany’s G20 Presidency. The initiative is designed to improve the conditions for private investment so as to get infrastructure projects off the ground and create jobs. Eleven countries have so far signed up for individual compacts, including Senegal and Ghana, which Chancellor Angela Merkel is currently visiting.

Key players include the African states, as well as the World Bank, the International Monetary Fund and the African Development Bank. They will negotiate individual reform programmes along with possible additional inputs to be provided by G20 partners, and implement these programmes.

What will the partnerships for reform do?

The individual compacts with Africa represent a voluntary political commitment. They do not involve any financial support. That is why the German government has come to agreements on what it terms “partnerships for reform” in addition. These partnerships are already in place with Tunisia, Côte d’Ivoire and Ghana. Last year a total of 300 million euros were invested.

The three partnerships for reform aim to expand the use of renewable energy, improve energy efficiency and develop the financial and banking sectors. This is designed to improve conditions for national and international investors and make it easier for small and medium businesses to access loans. At the same time, more jobs and trainee places will be created for young people in forward-looking technologies.

How are conditions for investment being improved?

Another part of the German government’s Africa strategy is to improve conditions for investment by extending Hermes export credit guarantees. Since June 2018, the level of risk not covered by Hermes guarantees, i.e. borne by the investor, for investments in the public sector has been reduced from 10% to 5% in Ghana. This will open up new sales and investment opportunities for German industry.

How does Germany work with Nigeria?

German development cooperation with Nigeria focuses on sustainable economic development. Germany is, for instance, supporting the reform of Nigeria’s financial sector and fostering the development of financial services for small and medium enterprises (SME). Germany is also active in the renewable energy and energy efficiency sector and in the health sector, where it is tackling polio.

What is “Successful in Senegal”?

Numerous African states receive support from Germany, for instance in the fields of good governance, agriculture and health, as well as in the education and training sector. The project “Successful in Senegal” is developing genuine prospects of a better future in Senegal for youth, young adults aged between 15 and 35, and returning migrants.

How does Germany promote peace, stability and security?

“The Partnership with Africa is about economic development, but also about promoting peace, stability and security. Development is only possible if security is guaranteed,” said Chancellor Angela Merkel at the G20 Africa Partnership Conference held in Berlin in 2017.

In view of worsening conflicts and the spread of terrorist networks, conflict early warning systems, mediation, peacekeeping and measures to support the fight against terrorism are to enhance security and stability on the African continent. In this context, the German government also supports the Sahel G5 states in the field of infrastructure measures.

What do migration partnerships do?

Within the framework of the European Union, Germany has entered into migration partnerships with individual African states with a view to promoting training, employment and economic development, specifically for young people, thus addressing the root causes of migration.

Germany’s Africa policy aims to foster economic growth in Africa through a wide spectrum of development- and security-policy measures, as well as enhancing security on the ground and stepping up cooperation. This is intended to give the people of Africa long-term prospects.

Date: 29 August 2018