G20: Experts call for more than just development aid for Africa

May 16, 2017
The federal government wants to use its G20 presidency to mobilize more aid for Africa. But experts warn: more development aid is not enough to create prosperity on the continent.

When KY Amoako thinks about Africa’s future, his seven-year-old Enkeltochter comes to mind in Ghana. In a few years it will also push for the labor market. Her grandfather hopes that something has changed for the better: “I hope she will experience an economy that creates enough well – paid jobs. I hope she will see an economy that is no longer based on traditional agriculture and the dismantling “Says Amoako, the former head of the UN Economic Commission for Africa. “I hope it will find an economy that can compete with high-quality imports from Europe.”

The reality is different. Currently some 389 million Africans live in poverty. And this figure could go up as the population grows. By 2050 Africa’s population will double to around 2.5 billion people. 440 million young Africans will also be forced into the labor market by 2030, but they will not have enough jobs for them.

The magic word of the federal government is  G20-Africa partnership . It wants to use the presidency of the G20 group of the largest industrialized and emerging countries to mobilize more resources for the continent. This is to reduce the high number of refugees to Europe. Also Amoako considers the partnership as a good idea. But she is only a piece in a big puzzle, he restricts.

Development aid is not enough

After all, more development aid alone is not enough. For the necessary investments in the infrastructure on the continent alone, 130 billion US dollars are needed each year. This corresponds roughly to the total amount of public development aid per year, says Thomas Silberhorn, Parliamentary State Secretary at the Federal Ministry for Economic Cooperation and Development.

That is why more money is to be acquired in Africa itself. After all, the continent is rich in raw materials. Exports also deserve local elites. “We have to say that much of the money generated in Africa is not spent on the ground as savings or investment, but is exported to safe havens – for tax avoidance or for apartments in Berlin and Munich, London or Paris,” says Silberhorn A conference of the Konrad-Adenauer-Stiftung in Berlin.

“To channel these resources so that they can be invested wherever they arise, and can be used for employment and prosperity, requires a different approach than before.” In addition, the federal government wants to fetch more private investments into Africa . At the moment, just 1,000 German companies are active in Africa, says Silberhorn.

Reforms in Africa instead of plans from the outside

The Federal Government is promoting its “Compact with Africa” initiative. The Ivory Coast, Morocco, Rwanda, Senegal and Tunisia have applied for the Compact. Other countries could follow if the concept of the Compact is implemented. But Tutu Agyare is skeptical. He is the head of the investment and advisory firm Nubuke Investments. “I can sell raw cocoa to the EU and it will not raise customs duties, but if I want to sell chocolate to Europe, I have to pay 30 percent import duty,” says Agyare, who used to work for the Swiss bank UBS. “If I want to breed chickens and build a poultry industry, I will get some chickens from Europe, who will be  bogged down here and stifle my plans.”

For him, the key to prosperity lies not in foreign plans, but in Africa itself. Instead of developing aid, African countries should be more likely to consider how to enable their citizens to return abroad better, says Agyare. And the educational system should also be urgently overtaken. “Our education systems do not make sense,” he says. 50 to 60 percent of all Africans lived in agriculture. But only five percent of all university graduates had studied agriculture. “You would never run a business and train people in things they do not need, but that is exactly how our education system works.”

Original post at DW

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