The G20 Africa Conference is taking place in Berlin today. For it, the German government has put together a package containing measures worth a billion euros.
said: “Trade and investment are key to growth and jobs in Africa. We are now targeting our economic expertise to create further opportunities for Africa’s economic and social development. We are making a major contribution towards the government’s billion-euro package, and will be establishing a tightly meshed network of commerce-related stakeholders. We want to use it to help more German firms achieve success in Africa.”
The Federal Ministry for Economic Affairs and Energy can build on many years of successful work supporting German firms on a wide variety of foreign markets. To this end, the Ministry can draw on an innovative business network and much improved conditions for insuring exports and investment against risks.
The Economic Affairs Ministry wants to help more German firms achieve success in Africa. This applies in particular to small and medium-sized enterprises. Many of them lack familiarity with the markets. And many African markets involve greater risks. The Economic Affairs Ministry’s contribution towards the billion-euro package is intended to help companies at various stages along their road to the markets of Africa. The measures include pro-active approaches to German firms, practical support, corporate partnerships with African firms, and comprehensive backing. Another aspect is improved insurance against risks.
We have already made clear improvements to the conditions for export credit guarantees. In this way, we have made it substantially easier for German firms to their products and services. Specifically, we have halved the excess for insurance for transactions with the public sector in some countries from 10% to 5%. Since June 2018, this has applied to Côte d’Ivoire and Senegal, and also – under certain conditions – to Ethiopia, Ghana and Rwanda.
On this basis, we have already given backing to several major transactions, e.g. the export of distributed solar installations and energy storage facilities to Senegal, and the supply of ambulances to Ghana.
We are continuing this successful approach with further improvements to the conditions for export credit and investment guarantees:
We are cutting the cost of insuring German exports against the risk of non-payment in partner countries of the Compact with Africa. In the case of transactions with the public sector, we are cutting the excess imposed in other countries to 5%, assuming that reforms are undertaken and the debts are sustainable. Companies which have never previously applied for federal guarantees for exports to Africa are exempted from the application fee for the first three applications. We will in future give the local impact on employment a particularly positive weighting. For Benin, we will with immediate effect put the conditions in place for export credit insurance to be provided for export transactions with public-sector clients.
We are making it easier for German companies to insure their investments against political risks in countries of the Compact with Africa. In the case of suitable projects, the excess can be cut from 5% to 2.5%. No application fee will be imposed on the first three applications. We will pay greater attention in future to the local impact on employment. Existing restrictions on insurance coverage will be removed as reforms are undertaken by countries, so that it will be possible to insure appropriate projects against more risks than has been the case.