Article - Promotion of Foreign Trade and Investment

Africa Business Network

Introduction

The Africa Business Network and a strong network of established stakeholders and programmes to promote foreign trade and investment ensure that German firms can rely on sound advice on their way to doing business in Africa. German companies wishing to engage in Africa can draw on a packaged advice and support service from the Africa Business Network.

Africa

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Africa is a continent with a lot of challenges and great opportunities. In 2018, the African economies grew by an average of 3.5%. Trade and investment are key to sustainable growth and jobs in Africa.

The Federal Economic Affairs Ministry can look back on many years of successful work helping German firms break into many different foreign markets. It is now specifically using this expertise in foreign trade policy to open up further opportunities for Africa’s economic and social development. This creates win-win situations for both the African partners and for German companies. In this way, the Federal Economic Affairs Ministry contributes to creating jobs in Africa and thus to the development of market economies and increasing prosperity in the countries of this continent.

Federal Government supporting German SMEs heading for Africa

The new Africa Business Network established by the Federal Ministry for Economic Affairs and Energy provides comprehensive advice and assistance, especially for German small and medium-sized enterprises wishing to set up business operations in Africa. The network consists of the established actors and programmes of German foreign trade and investment promotion, such as the network of bilateral chambers of industry and commerce, Germany Trade & Invest, the market development programme, and the export initiatives of the Federal Economic Affairs Ministry. It also includes federations, associations and institutions with a focus on Africa.

In establishing the Africa Business Network, the Federal Economic Affairs Ministry is fostering the implementation of the Development Investment Fund for Africa that was announced by Federal Chancellor Dr Angela Merkel on 30 October 2018. The Africa Business Network constitutes the third pillar of this fund. The first pillar is AfricaConnect, a fund managed by Deutsche Investitions- und Entwicklungsgesellschaft (DEG), which is designated for financing German investments in Africa. The second pillar, the AfricaGrow Fund of the Kreditanstalt für Wiederaufbau (KfW), provides support for African companies.

The Africa Business Network established by the Federal Ministry for Economic Affairs and Energy networks the established actors involved in German foreign trade and investment promotion even more closely with one another and offers companies tailor-made assistance and funding for entering African growth markets.

In order to give the best possible backing to business projects, the Africa Business Network provides companies with an adviser from the Network’s office. These so-called “Africa Partners” assist the companies along the way from the project idea up to the implementation and beyond. They draw companies’ attention to specific business opportunities in Africa which have previously been identified, examined and prepared by the Business Network. Also, companies can approach the Business Network with their own ideas.

The network offers interested companies initial advice on measures to promote foreign trade and to foster development cooperation. If necessary, companies are referred to other bodies for in-depth advice, for example on project financing, business case calculation, and on customs and legal issues. The advisory services offered to companies include market research and match-making trips to Africa and assistance in building business contacts on the ground.

The focus of the Africa Business Network is on the twelve countries currently covered by the Compact with Africa (CwA). The twelve CwA countries include Ethiopia, Egypt, Benin, Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Morocco, Rwanda, Senegal, Togo and Tunisia. The Africa Business Network was launched in the form of three pilot projects in the summer of 2019.

Ethiopia: textile, clothing and leather industry

Ghana: food processing technology and logistics

Morocco: health sector

Projects in additional countries and sectors are planned for 2020. Companies wishing to find out more about the pilot projects or the Africa Business Network in general can contact the Africa Business Network Task Force.

Contact:
Africa Business Network Office
Potsdamer Straße 199
10783 Berlin
Telefon: 030 - 540 879 311
beratung@wirtschaftsnetzwerk-afrika.de

Within the scope of the network, not only project-related advisory services are being expanded, but also the basic advisory and assistance structure of the network’s partners, which are funded by the Federal Economic Affairs Ministry.

Bilateral chambers of industry and commerce

Africa’s network of bilateral chambers of industry and commerce (AHK) is being expanded. In 2019, new German chambers of commerce will be established in Ethiopia and Côte d'Ivoire. Cross-border sectoral competence centres and regional managers will provide advisory services in selected countries which do not have a German chamber of commerce.

Germany Trade & Invest

Germany Trade & Invest (GTAI) (in German), the federally owned foreign trade and investment promotion agency, is expanding its presence in Africa with two new offices in Morocco and Côte d'Ivoire and three additional travel correspondents. GTAI’s domestic advisory capabilities will be enhanced by a virtual Africa Business Guide (in German), which will serve as the first digital point of contact regarding business-related questions and information on Africa. This digital tool is being developed by GTAI on behalf of the Federal Economic Affairs Ministry.

Administrative partnerships

Administrative partnerships with African countries are another key policy instrument of the Federal Economic Affairs Ministry. The aim – as with the EU instruments Twinning (in German) and TAIEX (in German) – is to deploy specific experts from the Ministry or its agencies to support reform processes in business-related partner agencies in selected African countries and to modernise administrative structures. Our work is guided by the needs of German companies. The first administrative partnerships have already been launched with the Algerian Technology Parks Agency (ANPT), the Egyptian Competition Authority (ECA) and Tunisia’s High Authority for Public Procurement (HAICOP). Further administrative partnerships with commerce-related authorities from North Africa are to follow soon.

The market development programme for SMEs

The Federal Ministry for Economic Affairs and Energy’s market development programme supports small and medium-sized companies as they develop foreign markets. The programme was launched in 2012, and offers standardised services for a large number of topics and target markets which can be deployed flexibly to meet companies’ needs.

In 2019, €3 million of funding was used to support 32 market development projects on 20 target markets in Africa. The aim is to have a similar scale of activities in 2020. The programme also serves as a platform for the Africa Business Network.

Energy Export Initiative

The Federal Economic Affairs Ministry’s Energy Export Initiative (EIE) helps German providers of climate-friendly energy solutions enter new markets abroad. The support (services) offered under the initiative are mainly addressed to small and medium-sized enterprises (SMEs) and covers all phases of a company’s market development - from market research up to market entry.

The EIE pursues a global approach. In addition to providing comprehensive market information, including financing options, the initiative focuses on establishing business contacts, fostering matchmaking, implementing and presenting reference projects as well as participating in industry-specific trade fairs abroad. Of particular importance for Africa is the Project Development Programme: the Project Development Programme contains activities which focus on preparing and supporting the market in order to facilitate the initiation of business in the African markets since these markets are difficult to penetrate. The activities include policy advice, capacity building and transfer of know-how. In addition, the programme serves to identify, verify and select specific project opportunities and to make them available to German companies so that they can implement them together with a local business partner. In 2019, the EIE will implement a total of 45 activities in 25 African countries within the scope of the programme.

Healthcare Export Initiative

The Healthcare Export Initiative (in German) supports German companies in the healthcare industry in opening up foreign markets. It pools and generates information on export markets for the German healthcare industry. Global marketing activities for German healthcare products and services as well as networking formats give companies greater visibility and help them to establish contacts with potential business partners abroad. Moreover, the export initiative actively seeks dialogue with decision-makers in important export markets in order to positively influence the terms of trade in these countries.

A study conducted specifically for the African markets summarises the most important market developments and business opportunities in the field of medical technology. The focus is on South Africa, Egypt, Nigeria, Ghana and Kenya. In addition to providing market information, the study compares issues that are important for entering markets, such as imports, licenses and distribution of goods. What is more, the export initiative has been active in South Africa since 2017 and provides additional support services to exhibitors at the joint Federal Government stand of Africa Health.

Foreign Trade Fair Programme

The Federal government’s Foreign Trade Fair Programme (in German) is also being expanded to include more trade fairs in Africa. Supported by additional funds from the Africa Initiative, 34 trade fairs could be included in the 2019 Foreign Trade-Fair Programme (2018: 14 trade fairs). In total, the Federal Economic Affairs Ministry is actively involved in 16 countries on the African continent. In 2020, we intend to provide packages of support for participation at 30 trade fairs in Africa.

Manager Training Programme

The Federal Ministry’s manager training programme (in German) is entitled “Fit for Partnership with Germany”, and prepares managers from companies based abroad for doing business and co-operating with German firms. During the training, managing directors and senior managers from 19 partner countries and two pilot countries gain access to German management knowledge and to German companies, industry associations, networks and clusters. In 2019, the programme focuses on expanding the country portfolio for Africa: Egypt and Tunisia are already partner countries, and Ethiopia, Morocco and South Africa were included as pilot countries in the programme in 2019.

'Skills Experts': Ensuring a skilled workforce in German companies abroad

German companies need well-trained employees – not just in Germany, but also at their sites abroad. The Federal Economic Affairs Ministry has therefore launched the Skills Experts programme which mainly supports small and medium-sized enterprises in developing and implementing their training strategies. In March 2019, the programme was officially launched in Africa.

The Skills Experts programme seeks to support German companies and their local partners in Ghana, Kenya, Nigeria (in German) and South Africa (in German) in such a way that they are able to train workers on the ground based on the model of Germany’s dual training system in order to provide them with the required intermediate-level skills (as needed). The programme provides so-called "Skills Experts" who offer quality-assured services in consulting, organisation and quality management on the basis of a globally comparable vocational training portfolio developed by the bilateral chambers of industry and commerce. They are members of the bilateral chambers of industry and commerce, delegations, and representative offices of German industry. The Delegation Of German Industry and Commerce in Kenya has already successfully introduced its first dual training course for chefs and specialists in the hotel business.

Export and investment guarantees

In addition, the Federal Government has improved the conditions for public export credit and investment guarantees (in German). In the export credit guarantee context, the excess for transactions with public clients has been reduced for numerous countries. This means that, since November 2019, the regular excess of 5% has applied to Hermes guarantees for exports to all participants in the Compact with Africa. That year, export credit guarantees were granted for products and services in the amount of €1.8 billion (2017: €1.1 billion). The volume of coverage thus increased by 66.3% in year-on-year terms. The share of total risk coverage increased to 9% (2017: 6.3%). In the case of suitable projects in countries covered by the Compact with Africa initiative, the excess for investment guarantees can now be cut from 5% to 2.5%. Also, the application fee charged for export and investment guarantees will be dropped for certain transactions with Compact with Africa countries.

Centres of Excellence for Mining and Mineral Resources

The office of the delegate of German commerce in Ghana is setting up a new centre of excellence for mining and mineral resources which will also cover other West African countries. Further more, the area covered by the existing centre of excellence for mining and mineral resources at the Southern Africa chamber of commerce is to be extended to further countries of interest in the field of raw materials.

Further information