Trade relations South Africa, Ethiopia, Germany

Image via Stollberg

German businesses not seizing opportunities in sub-Saharan Africa, says minister

Companies in the German state of Baden-Wuerttemberg are not doing enough to seize the enormous investment potential that Africa officers, its economic affairs mininster has said.

Trade relations South Africa, Ethiopia, Germany

Image via Stollberg

Cooperation offers great opportunities for Africa to promote jobs and prosperity and key issues around digitisation, environmental technology and innovation, said Dr. Nicole Hoffmeister-Kraut, who started a five-day trip to sub-Saharan Africa on Sunday.

In a statement, she said with their political modernisation, reform efforts and an established middle class, South Africa and Ethiopia in particular were among the countries which a study commissioned by the ministry of economic affairs had identified as particularly promising.

From Johannesburg to Addis Ababa

Hoffmeister-Kraut will visit the South African cities of Durban, Johannesburg and Pretoria as well as the Ethiopian capital Addis Ababa, accompanied by a 35-member delegation of companies and chamber organisations, among others.

In addition to the automotive industry, environmental technology will also be a central focus of the trip.

“The broad interest of the participating companies shows the great willingness to share our know-how and to support African countries improving their living conditions and environmental protection,” Hoffmeister-Kraut said.

“With all the opportunities offered by the African market, the issue of responsible value and supply chain management is of paramount importance to me. To create awareness for this and to have a mutual exchange is an important overarching aspect of my upcoming appointments.”

“SA is considered an economic and political locomotive”

She said some of South Africa’s strengths included good infrastructure, immense raw material reserves and a young population, while the country was the only African member of the G20 group of developing nations, a member of the BRICS grouping which also includes Brazil, Russia, India and China, and a major player in climate issues.

“South Africa is considered an economic and political locomotive for the continent,” Hoffmeister-Kraut said.

“The political situation has changed; the country is on a course of stability and on a good way to stem corruption. It is therefore exactly the right time for this trip. Currently, around 100 Baden-Wuerttemberg companies are already active in South Africa. The South African market is therefore no unchartered territory for our companies and is rightly considered a stepping stone into the entire African market.”

Baden-Wuerttemberg also has a long-standing partnership with South Africa’s KwaZulu-Natal province and Hoffmeister-Kraut said the aim of her trip was also to revive and deepen this partnership in the economic sector.

With a population of around 110 million, Ethiopia was one of the most attractive investment locations in Africa and its new prime minister Abiy Ahmed – who was awarded the Nobel peace prize last month – had created a hopeful sense of optimism with economic reforms and peace agreements, she said.

Export infrastructure

Although Ethiopia had recently hit the headlines with news of civil unrest, the minister said she saw the country on a good path to becoming a hub for the economic development of East Africa in the future.

“Ethiopia scores with non-commodity-based economic growth and has become a sought-after investment destination,” she said.

In 2018 Baden-Wuerttemberg exported goods worth about 1.3 billion euros to South Africa, which ranked 28th in the German state’s most important export countries that year. Most exports to South Africa are traditionally motor vehicles and parts, followed by machinery.

South Africa ranks 23rd for imported goods worth 1.5 billion euros for Baden-Wuerttemberg, these also being mostly motor vehicles, parts and machines.

In 2018, Ethiopia ranked 104th worldwide in terms of exports from Baden-Wuerttemberg, worth around 20m euros. These were dominated by machinery and chemical products, cars and vehicle parts, data processing equipment and electronic and optical products.

African News Agency (ANA), Editing by Stella Mapenzauswa