Is Germany about to Invest in Africa together with China?

Among the various issues brought up at the G20 summit in Hamburg, which received relatively little coverage, is the possibility that the German government will agree to cooperate with China in the development of Africa. Helga Zepp LaRouche, who has long promoted such an approach, welcomed the apparent shift. Chancellor Merkel appears to be motivated in large part by the dramatic escalation of the refugee crisis in Europe and her wish to prevent more migrants from coming.

There are many German firms already operating in Africa, and many more that wish to be involved, while African leaders have long hoped for access to German technology and engineering skills. However, the emphasis by Berlin and the EU on “transparency” and “anti-corruption” guarantees, combined with demands that financing go through traditional channels, such as the IMF and World Bank, have severely limited German involvement.

In contrast, the Chinese have moved in with many projects launched in Africa as part of the extension of the Belt and Road Initiative (BRI), funded largely by the Chinese government and banks, without the conditions imposed by western financial institutions.

A sign of the shift underway was the announcement made during President Xi Jinping’s July 5 meeting with Angela Merkel that an agreement has been signed with China for the joint construction of a hydro-power complex in Angola.

Moreover, on July 6, the Afrika-Verein, an organization of German companies involved in trade, investment and production in Africa, held its “Africa Day 2017” in Berlin. Dr. Stefan Leibing, the Chairman of the association, said that while many are promoting the digital economy as key for Africa, which he described as “asset lite”, there is still a big need for a “heavy” approach, that is, infrastructure. In this context, he said he has concluded that there can be a “trilateral approach” to investment in Africa, with China and Germany as partners, to build infrastructure.

He was followed by Gerd Müller, the German Minister of Economic Cooperation and Development, who emphasized that public funds are essential, which is why he proposed the “Marshall Plan” for Africa. This countered the prevalent line that African development must be based on small-scale, “sustainable” projects, with funding largely from private investors. Müller said he had met with President Xi the previous day, when they discussed a German-Chinese partnership in Africa. Next week, he said, Merkel and Emmanuel Macron will present a coordinated German-French initiative for Africa.

At a follow-up meeting the next day at the Afrika-Verein offices, government officials told 60 businessmen and industrialists that there are already joint committees of German and Chinese specialists working to collaborate on financing and developing additional infrastructure projects.

The need for a change in thinking in Europe, away from the traditional neo-colonial approach to the “win-win” approach of the Chinese with the BRI, was emphasized in a speech at the “Africa Day” event by Alpha Condé, the President of Guinea and Chairman of the African Union (AU). Condé, who had been involved in meetings with Merkel to shape the new Africa policy, made two main points.

First, Africa stills suffers from poverty, despite its improvements in recent years, and energy and infrastructure are crucial, along with the need to develop manufacturing. This is the goal not just for his country, but all AU member states. Secondly, he said that while Germans are welcome to come and invest,

“We do not want to receive lessons from you on governance….We don’t want to be subcontractors for German or European companies. We are not just delivering raw materials. We don’t want to be beggars, but business partners — put Africa at ‘eye level’ with other continents.”