Source: iStock.com/donvictorio

© iStock.com/donvictorio

The federal government has significantly improved the conditions for state export credit guarantees for exports to selected African countries and thus made it easier for German companies to export their products there. As a consequence, it has been possible to realise numerous projects.

Federal Minister Altmaier said: "The private sector plays a key role for Africa's economic development. The German federal government is supporting the commitment of German enterprises to the African continent by granting export credit guarantees."

The improvement of the conditions is already having an impact: At €1.09 billion, the volume of coverage for Africa more than doubled in the first six months compared with the corresponding pre-year period (1st half-year 2017: €0.44 billion); it has already exceeded the level of the whole previous year (2017: €1.07 billion). Sub-Saharan Africa accounted for €0.55 billion (2017: €0.25 billion). The top five destinations were Burundi, South Africa, Kenya, Angola and Benin.

Tthe federal government's latest decision – to reduce the deductible for selected transactions with African countries from ten to five percent – has been particularly successful. Only a few weeks after this decision, the federal government is backing two large-scale export transactions with export credit guarantees. In the context of one project, it is supporting exports of distributed solar installations and energy storage facilities to Senegal. The aim is to secure energy supply for 300 villages in the coming years. In the context of the second transaction, the German government is covering the sale of ambulances to Ghana.

In order to facilitate exports to Africa, at the beginning of June 2018 the German federal government reduced the deductible for insurance coverage for transactions with the public sector in the countries that have improved the environment for private investment in the context of the G20 initiative "Compact with Africa".

This reduced deductible applies to the insurance of supplies to and services for Côte d’Ivoire and Senegal, and – under certain conditions – Ethiopia, Ghana and Rwanda. Provided that the political and economic situation permits, the federal government will extend this provision to additional countries in Sub-Saharan Africa.

State coverage for transactions with other countries has also increased: in the first half-year of 2017, demand for export credit guarantees for transactions rose worldwide due to uncertainties on major export markets. As a consequence, the federal government granted guarantees for new transactions totalling €8.1 billion (+5.7%), 77% thereof for transactions with emerging economies and developing countries.

Further information about the instruments of state export credit guarantees is available at: www.agaportal.de.