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Speech by Federal Chancellor Dr Angela Merkel at the Conference on the G20 Compact with Africa in Berlin on 30 October 2018

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Mr Kagame, Chairperson of the African Union,

Presidents and Prime Ministers from Africa,

Federal Chancellor Kurz on behalf of the European Union,

Christine Lagarde,

President Kim,

Mr Faki, Chairperson of the African Union Commission,

President Adesina,

Ladies and gentlemen and

Cabinet colleagues,

I’d like to bid you all a very warm welcome. This isn’t a routine meeting. Rather, it’s something quite special. I can say from Germany’s perspective – the situation would be very different in France – that this is the largest meeting of Heads of State and Government with African Presidents in the history of the Federal Republic of Germany. The fact that so many of us have come together here today underscores the importance of this meeting, which follows on from last year’s conference. At that time, Germany held the G20 Presidency. It was the idea of the then German Finance Minister, Wolfgang Schäuble, to enter into a partnership with Africa in the form of a Compact with Africa. Then the Development Minister had the idea of creating special development partnerships. I’d therefore like to extend an especially warm welcome to the current German Finance Minister and the Development Minister, who are sitting here upfront.

As you can see, all of us have committed to a partnership with Africa. Why is Africa so important to us? It’s important to us because we’re neighbours, as you can see on a world map, and because we therefore have a vested interest in ensuring that not only we in Europe but also the entire African continent is thriving. In some ways, Africa is a very rich continent. Just think of its natural resources and, above all, young people – of whom there are not so many in Europe. Africa also has a rich history and a wonderful culture. From a business point of view, I believe we can say that Africa is the continent with the greatest potential for development. That means that anyone who wants to do business on the continent should get started as soon as possible.

However, I don’t want to gloss over the difficulties. For there are problems in many African countries, in which people are very poor, in which not everyone has access to electricity, to water or other basic necessities. You all face the pressure of the high expectations of young people in your countries. It’s therefore important to talk openly and frankly about the problems, about the progress made and about the opportunities offered by our cooperation.

The Compact with Africa initiative also tackles the preconceived ideas which some companies have about investing in Africa because they’re often unfamiliar with the continent and don’t know how to get loans, how much legal certainty they can expect, how much bureaucracy there is or to what extent they may have to deal with corruption. These and many other questions mean that some companies are unsure whether they should do business in Africa, in your countries.

Therefore, in our view, the aim of the Compact with Africa is twofold. On the one hand, it is intended to lead to higher standards and more transparency, particularly in your finances. In return, we can offer better investment conditions for our companies. This morning I told the Investment Summit that in this legislative term we have set up a fund of one billion euros with a view to supporting small and medium-sized enterprises from Germany or Africa. In the case of countries where conditions are better and more transparent, more favourable conditions could be given for credit guarantees. That will then result in a higher volume of investment. It’s no coincidence that direct investment is higher in the Compact with Africa countries than in other African countries. We hope that this will continue to pay off.

Well, the G20 Presidency only lasts one year. After that, there’s a danger that everything will be forgotten. I’m therefore very grateful to the IMF, the World Bank and also the African Development Bank for saying that they would continue to shoulder responsibility within the framework of this initiative. For it’s not hard to understand that the issues involved cannot be resolved within a year. Rather they have to be dealt with on an ongoing basis. I therefore very much welcome what these institutions are doing. Japan will assume the G20 Presidency next year. And that country, too, will continue to address these issues.

I’ve invited Federal Chancellor Sebastian Kurz to be with us today because Austria’s European Union Presidency has also focused on Africa and will hold a conference focusing on the continent in December. We want to work closely together to avoid any duplication or even triplication of effort. For we should know what each other are actually doing.

It goes without saying that the more attractive conditions are in your countries, the better it will be for investment and trade, as well as for education and vocational training. One issue which has been very much on our minds and about which we’ve learned a lot during the last few years is what a modern development policy can look like. For a long time, we in Germany shaped development policy solely in collaboration with NGOs. That’s not enough. Although they run local and very good projects, these projects very seldom result in sustainable economic development. The first person who pointed this out to me many years ago was Kofi Annan who said that we had to focus more on small and medium-sized enterprises and on economic investment, naturally also with the aim of ensuring sustainability. Then we in Germany developed the GIZ further. Nowadays, the ministries – from the Federal Foreign Office to the Economics Ministry, the Environment Ministry and the Development Ministry as well as the Finance Ministry – cooperate very closely with each other and try to design fit-to-purpose packages.

I also want to say quite frankly that of course we’ve also looked to see what China is doing. China approaches your countries with very compact investment offers. And naturally you say that if dealing with Europeans always means first of all gathering together financing from various sources then it’s better to accept other offers. We’ve thus learned something from observing China, especially as it has experienced remarkable development during the last few years and thus knows very well how to leave poverty behind and increase prosperity.

I don’t want to repeat what I said this morning. I merely ask that whenever you negotiate a double taxation agreement with the Finance Ministry: let’s try to accelerate the whole process. That’s good for both sides and creates a substantial degree of certainty for our companies.

I’d like to conclude by asking you to talk about what’s important to you in your statements. Moreover, I’d like to point out that this meeting is being streamed live and that your remarks are thus accessible to a wider public. However, that doesn’t mean that you cannot also make critical comments. We want to learn from one another today. We don’t want to simply say nice things to each other. If we’re going to spend so much time together then our discussion has to produce results of value to us all.

Those were my words of welcome. I now ask President Kagame to speak first on behalf of the African Union and then Sebastian Kurz, who – as Austria’s Federal Chancellor – will look ahead to his High-Level Forum Africa-Europe in December.