ADDIS ABABA – Prime Minister Abiy Ahmed has attended today the G20 Compact with Africa Conference, convened by German Chancellor Angela Merkel in Berlin on Friday.
Several African leaders as well as Chairman of African Union, Moussa Faki, attended the conference – prestige project of the German G20 presidency.
Prime Minister Abiy was among the leaders virtually participated in the conference held under the title ‘Framework Conditions for Business and Investment’.
The conference focused on how to drive forward the framework conditions for more business and investment opportunities in Compact countries, according to the PM Office.
In his remarks, Prime Minister Abiy explained the progress of Ethiopia’s homegrown economic reforms through which macroeconomic, structural and sectoral reforms have been put into place to create a conducive investment climate.
“The achievements in the past years are indications of our commitment and potential,” he said.
“Ethiopia is committed to continue to implement macro-financial and investment climate reforms to improve the framework for private investment in the country,” the PM added.
German chancellor Merkel launched the Compact back in 2017 during Germany’s G20 presidency with a promise to generate additional private investment in African states.
In turn, participating African states would commit themselves to implementing economic reforms.
However, the continent still only receives 1% of all German investments worldwide.
The “Merkel Plan,” as Ivorian President Alassane Ouattara dubbed it in 2017, has brought about a moderate rise in investments.
From 2017 to 2019, German investments in Africa grew by about €1.57 billion ($1.84 billion), according to a report by DW, calling the increase “rather moderate”.
No figures are yet available for 2020, but it is likely to stagnate or, at best, grow slightly due to the pandemic, it says.
In 2019, just 884 companies were investing in the continent, that’s 42 more than in 2017, despite numerous support programs launched by Merkel’s government.
The programs include an investment fund worth billions, more advisory services for companies, and better safeguards and guarantees.
Merkel wants more
Speaking at the summit on Friday, Chancellor Angela appealed for more German investment in Africa, particularly in the renewable energy sector.
“Africa has so much market potential, but we need to make better use of it,” Merkel said at the conference.
Expansion of renewable energy investment “is of enormous importance for us to achieve our global climate goals,” the German chancellor added.
The chancellor said that she realized during her trips to Africa that it’s a “continent of opportunities and ideas” and a “continent with promising growth markets and with many, many committed young people.”
Merkel, who attended for the last time as chancellor, has been very involved in Africa, according to Christoph Kannengiesser, chief executive of the Africa Association of German Business.
“We hope that future economic and foreign ministers will again increasingly go to Africa with business delegations, but also support concrete projects with appropriate political flanking,” he told DW.