African Countries Are increasingly Becoming Valued Partners for Germany
The African continent as a whole is increasingly becoming the fastest growing economy, this in turn is ensuring that African countries are becoming important and valuable economic partners for GermanyJune 01st, 2016
Despite Africa’s well documented struggle in terms of maintaining stability of its economy and various political regimes, its economy is growing a very fast rate. In fact Africa’s economy is currently the growing at the fastest rate in the world, its GDP has grown by 30% in the last decade. In the last number of years Africa’s average growth rate is still at more than 5% and Africa’s demography has also ensured that as a continent it continues to be the fastest developing one in the world.
Africa’s growth rate has ensured that an increasing number of African countries are becoming more involved in global trade and are progressively becoming valued as important partners for the world’s strongest economies, as the economic exchanges with the Asia-Pacific region, Europe and North America are expanding extremely fast.
These combined factors have meant that Africa is now an important partner for Germany, who are also considering the future impact that a relationship with states in the African continent may have. In return African states are eager to cooperate with the German economic sector and who are working hard to increase the regional attractiveness of Africa in terms of enticing foreign investment and cooperation through regional economic integration steps. In 2013, Germany’s exports to Africa reached a value of 13.6 billion euro and its imports reached a value of 12.4 billion euro. This demonstrates the growth of these exchanges even if it only represents 1.3% of German foreign trade. Germany’s largest trading partners in Africa are South Africa (1st) and then Nigeria (2nd).
Despite Africa’s impressive growth in terms of economic growth, Africa still suffers from recurrent problems which make it somewhat more of a liability in terms of securing more investment in the region. Problems like that of a lack of infrastructure (rail, road, ports, pipelines and air transport), political instability and corruption, are still features in many states in Africa. However the German government has recently provided state export credit guarantees for German companies in the south of the continent, this in turn increases the chances of the German economy to participate in the recovery of the sub-Saharan region.
Germany has also introduced a new initiative in order to ensure investment guarantees and transparency in Africa, which has had positive results so far. As a result of these initiatives more and more German companies are investing in Africa. It is important for Africa that these investments continue to occur, Africa’s economic potential and its long term growth especially in the fields of raw materials, energy, tourism and trade are all dependent on continued investment in the continent.
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News from Berlin
Pierre Even, Berlin Global