‘Interest in Africa is growing rapidly’

Africa has been considered the continent of opportunities for many years now. Is this accurate?

I would prefer to look at it the other way round: because of the geopolitical situation, German companies have no other choice but to pursue new markets. We know about the risks in China, the challenges in the US and endeavours to break ties with Russia. German companies are therefore eager to expand their supply chains and sales markets and are increasingly looking to Africa.

Are you noticing growing interest at the DIHK?

Indeed, we are seeing a sharp increase in interest among businesses in terms of trips, events, trade fair participation and individual consultations. However, at the same time, there are significant knowledge gaps as well as heightened sensitivity around any potential risks. Both of these aspects are more pronounced than on other world markets.

Up to now, only around two per cent of German exports have been destined for Africa. Will this soon change?

Trade is at about two per cent overall, which is still low. But I am cautiously optimistic that the engagement of German companies will cause this level to grow continuously. Even if it takes time. However, I think it is an exaggeration to say that Africa is the new China, as is sometimes claimed.

How far is Germany lagging behind other countries when it comes to trade with Africa?

A long way. But German companies enjoy a very good reputation in Africa, because of the quality of the products, their predominantly long-term commitment and good cooperation locally. And we should build on this.

In your view, which sectors have the best opportunities for the German economy?

We are currently seeing considerable potential in sectors such as energy, health and agriculture. Nearly all African countries are in the process of ramping up their energy systems and making them socially and environmentally responsible. German companies have a lot to offer here, maybe not always in terms of equipment; East Asia is more dominant in this area. But we have excellent engineering firms, for example, who can support businesses in switching to new energy systems. We are also well positioned when it comes to energy technologies that reduce energy and resource consumption.

What opportunities are there in health and agriculture?

The needs in African health care systems are extensive – from hospitals in urban centres that need equipment to basic medical care in rural areas. The German pharmaceutical industry has significant technological expertise. This creates interesting business opportunities. Agriculture is the largest sector in Africa and continues to grow. Here, too, there are good opportunities – for mechanical and plant engineering, for instance. However, too little is known about this still.

Apart from knowledge gaps and risk aversion, what are the biggest hurdles to investment in Africa?

Aside from local conditions that are sometimes difficult, which we can do little to change from here, there is primarily a lack of financing and risk protection – and both are difficult to obtain for the purpose of engagement in Africa. This is regrettable, because companies then either stay away or have to look to other European countries and are then often required to obtain supplies from that country. As such, we would definitely like German risk protection to be more easily accessible. This could be achieved with the right policies. A public-private investment fund for Africa would also be helpful.

Aside from well-known markets like South Africa, which countries do you think are particularly attractive?

We are seeing dynamic economic developments in countries like Côte d’Ivoire, Senegal, Zambia, Angola, Rwanda and Tanzania, for example. The Democratic Republic of the Congo also remains economically relevant due to its mineral deposits, although the country’s specific political and security-related challenges need to be considered carefully. Germany should pay close attention to the economic developments in these markets.