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 2019, the African economies grew by an average of 3.2 per cent (source: IMF). 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 different foreign markets. It is now specifically using this expertise in for-eign trade policy to open up further opportunities for Africa’s economic and social development. This creates win-win situations for both African partners and German companies. In this way, the Federal Economic Affairs Ministry contributes to creating jobs in Africa and thus to the develop-ment 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 consulting services and assistance, especially for German small and medium-sized enterprises wishing to set up business operations in Africa. The network is composed of the established actors and programmes of German foreign trade and investment promotion, such as the network of bilateral chambers of industry and commerce (in German), 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 other pillars are AfricaConnect, a fund managed by Deutsche Investitions- und Entwicklungsgesellschaft (DEG), which is designated to financing German investments in Africa, and AfricaGrow, a fund of funds implemented by KfW development bank together with Allianz Global Investors to facilitate access to capital for African companies.

The Africa Business Network brings all established actors involved in German foreign trade and investment promotion closer together and offers companies tailor-made assistance for entering African growth markets.

In order to give the best possible support to business projects, the Africa Business Network provides companies with an adviser. These so-called Africa Partners assist the companies all 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 Africa Business Network. Also, companies can approach the Africa Business Network with their business ideas.

Interested companies can also receive initial consulting services on measures regarding for-eign trade promotion and development cooperation. If necessary, companies are referred to other organisations for in-depth advice, for example on project financing, business case analy-sis, and on customs and legal issues. The advisory services offered to companies include market research and match-making trips to Africa as well as assistance in building business contacts on the ground.

The Africa Business Network was launched along with three pilot projects in the summer of 2019.

Ethiopia: Textile, clothing and leather industry

Ghana: Food processing technology and logistics

Morocco: Healthcare

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

Contact:
Africa Business Network Office
Potsdamer Straße 199
10783 Berlin
Tel.: +49 30 27 57 57 60
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

With 18 locations in 12 countries and offices planned in Côte d'Ivoire and Ethiopia, Germany’s network of bilateral chambers of industry and commerce (AHK) in Africa serves as the key point of contact for German companies wishing to establish or ex-pand their business activities in the region. Cross-border sectoral competence centres and re-gional managers will provide advisory services in selected countries which do not have a German chamber of commerce. Since 2019, the Office of the Southern African-German Chamber of Commerce and Industry in Berlin has also provided a point of contact in Germany.

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 corre-spondents. 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 matters and in-formation on Africa. This digital tool is being developed by GTAI on behalf of the Federal Eco-nomic 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 (MEP)

The Federal Ministry for Economic Affairs and Energy’s Market Development Programme sup-ports German small and medium-sized companies as they develop foreign markets. The pro-gramme was launched in 2012, and offers standardised services in a large number of relevant subject areas and target markets. Companies can utilise these services flexibly to meet their needs.

In 2019, €3 million of funding was used to support 32 market development projects on 20 tar-get 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.

The coronavirus crisis has introduced new challenges, especially in Africa. The projects that were to take place in Africa after March this year had to be cancelled, and it remains un-clear/uncertain when travel will resume. As in other regions, such projects have therefore been and continue to be carried out virtually. In isolated cases, they were postponed. To date, nine virtual projects on Africa have been or plan to be implemented. Most of these are currently in the review and design phase. Companies, business associations and organisers have em-braced the change to virtual solutions in order to avoid project cancellations and idle time, and allow appropriate positioning in readiness for a new start after the crisis. If new economic chal-lenges and changes in demand in Africa emerge as a result of developments linked to the pandemic, appropriate projects can be quickly initiated and implemented within the MEP.

Energy Export Initiative

The Federal Economic Affairs Ministry’s Energy Export Initiative 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 cover(s) all phases of a company’s market development - from market research up to market entry.

The Energy Export Initiative pursues a global approach. In addition to providing comprehen-sive 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 companies 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 expertise. 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 Energy Export Initiative implemented a total of 45 activities in 25 African countries.

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 (AMP) (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 also being expanded to include more trade fairs in Africa. Supported by additional funds from the Africa Initiative, 27 trade fairs took place in Africa in 2019. Germany is currently planning to participate in 27 trade fairs in Africa in 2020 as part of the AMP. The Federal Economic Affairs Ministry is actively involved in many countries on the African continent. In 2021, we intend to provide packages of support for participation at 30 trade fairs in Africa.

'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.

The programme provides so-called Skills Experts who offer quality-assured services in con-sulting, 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.

Our Skills Experts are currently working from home and will continue to be available to you as competent contacts for all questions relating to training and further education.

The Delegation of German Industry and Commerce in Kenya has already successfully intro-duced its first dual training course for chefs and specialists in the hotel business.

A training course in logistics commenced in South Africa in early March.

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

On 1 February 2020, the Delegation of German Industry and Commerce in Ghana set up a new Centre of Excellence for Mining and Mineral Resources, which also covers other West African countries. On the same date, the area covered by the existing Centre of Excellence for Mining and Mineral Resources at the Southern Africa chamber of commerce was extended to further include countries of interest in the field of raw materials.

Further information