Speech by State secretary Dr. Bernd Pfaffenbach at the German World Bank Forum "Germany and Africa: Partners at Work"

Thu, 24.05.2007
May 22, 2007 in Berlin

Ladies and gentlemen,
first I would like to express my sincere thanks to you for inviting me to the German World Bank Forum, both in my function as G8 Sherpa and as Vice-Minister of the Federal Ministry of Economics and Technology.
Africa is of ever-growing relevance for Germany and all of Europe. As our neighbouring continent, its stability, development and prosperity are of utmost importance and have long been in the focus of German politics.
Global developments are showing us ever more clearly that it is not a case of "the African" and "the European" challenges. Rather, we can only solve the majority of problems by joining forces.
One of these problems is the issue of climate protection and the prevention of global warming, which threatens to inflict great suffering on African countries especially if we do not take decisive action.
Other problems include the fight against poverty, consequences of war and conflict and efforts to resist terrible diseases such as AIDS, TB and Malaria.
Global challenges can only be mastered through extensive international cooperation. We must therefore convince the major emerging countries, with their dynamic economic growth, to join us in our Shared Global Responsibility.
For that reason, the G8 Summit will initiate a new form of dialogue, the so called "Heiligendamm Process” especially with China and India but also with Mexico, Brazil, and South Africa.
We have consciously given our G8 Presidency the motto "Growth and Responsibility”. Growth remains the basic precondition for all countries to achieve more employment, better living standards, and higher productivity.
The topics of this World Bank Forum would seem to sum up the situation in Africa. The continent is undergoing unbelievable change and many things we thought were totally immovable are now being shifted around.
That is why the priorities of our G8 presidency are quite clear: we are working and will continue to work in partnership for a strong Africa and for the African people.
The aims to strengthen the private sector and the investment climate to achieve higher and more sustainable growth, by
·            substantially improving good governance,
·            undertaking further support for conflict resolution and peacekeeping,
·            providing more consistent instruments for strengthening health
             systems and fighting HIV/AIDS, and last but not least
·            complying with ODA commitments and efforts to enhance the effectiveness
             of development cooperation.
The G8 want more to be invested in the continent and we want growth and employment to be placed on a broader basis. Although increasing in absolute terms, FDI heading for Africa accounts for less than 4% of the world total.
This Forum will provide the German and African sector with a platform for dialogue on the environment for companies in Africa, business opportunities and the reforms which need to be promoted here.
Investment decisions depend on confidence, and confidence can only grow in an environment of good and reliable governance.
The G8 want to support African partners in efforts to address the problem of high costs of doing business. The G8 will also appeal to enterprises in their countries to step up activities in Africa and to correct the negative perception of the continent which all too often prevails.
Of course, the picture is not rosy everywhere, but we are also witnessing positive signs from Africa in connection with economic growth. We know that our neighbour, the African continent, is a dynamic continent which is doing everything it can to enjoy its share of positive developments.
At more than 5%, average growth rate is stronger than it has been for the last 30 years. The growth rate is expected to be 5.9% in 2007, with a visible difference of oil-exporting and oil-importing countries, though.
Overall Inflation is still in single digits for many countries but again slightly increasing due to high energy prices. The current account deficits are close to Maastricht criteria.
Africa’s trade balance is positive and accounts for 6% of GDP. Merchandise trade as a share of GDP rose from 43 to 50%. FDI inflows have surged, growing faster than in other developing regions and tripling their level between 2001 and 2005, reaching more than 30 billion US$.
You will agree with me that we cannot but be optimistic about Africa.
What worries me is that many Asian businessmen have understood it. They are increasingly moving in on Africa. Exports from Africa to Asia tripled in the last five years and the list of recent Chinese investments in Africa, for instance, is impressive.
So, investing in Africa is in the interests of German companies. It is also in the economic and geo-strategic interest of our countries. I should like to take this opportunity to assure you that the G8 are determined to support companies by helping to put in place the appropriate frameworks and tools.
The G8 have set themselves the task of creating an environment conducive to private sector development. We encourage dialogue between the public and the private sectors and are pressing for necessary fiscal, customs and banking reforms.
But all this alone will not be enough to trigger investments as long as there is no solid financing.
Together with the World Bank, the G8 will co- initiate a comprehensive program to "Make Financing Work for Africa”.
Furthermore, the G8 will enhance regional integration and trade in Africa through Capacity Development for Regional Economic Communities (RECs).
Moreover, the G8 partners are committed to undertaking all efforts to successfully conclude the DOHA trade negotiations in order to assure substantial benefits for all developing countries.
The G8 will also maintain their support for all Aid for Trade measures. Yet, Africa’s share in world trade remains minimal, at about 1,5%, and exports are concentrated in a narrow range of primary commodities.
Good governance is a key ingredient in increasing economic growth and accelerating poverty reduction. It is therefore no surprise that the promotion of good governance has become a mainstay in policy dialogue between African governments and the G8 and other donors.
The African Peer Review Mechanism, where African countries are evaluating each other’s systems and holding themselves accountable, offers an important opportunity to African leaders to show their commitment to improving economic governance, fighting corruption and fostering human development.
For the G8 the APRM is politically of crucial importance. That is why we want to make sure that our development policies take care of the APRM results. In this way we can vigorously support those reforms African leaders want to undertake as a result of the respective APRM process.
This is also how we understand the sense of the reform partnership of the G8 with African countries.
We also contribute to the Extractive Industries Transparency Initiative, to encourage companies and governments to publish what is paid and what is received in oil revenues and other revenues from extractive industries.
The G8 also promote peace and security in Africa, as absolute prerequisite for successful and sustainable development. It is the aim of the G8 to further assist the African Union and regional organisations to set up a sovereign African Peace and Security Architecture.
The aim of all these efforts is to effectively fight poverty and consequently achieve the Millennium Development Goals!
It is now the part of the private sector to play its part: first and foremost the private sector in Germany and other G8 countries, which must set aside its cautious attitude and step up cooperation with its African counterparts. Now, it is time to anchor Africa to global economy.
Only if we work together we will be able to make the vision of a just and secure world come true.
Fully conscious of this, Germany is willing to face this challenge.
Thank you for your attention.