Africa – a continent of hope and opportunity
Dear Mr. Richenhagen,
Dear President Thabo Mbeki,
Excellencies,
Ladies and Gentlemen,
I appreciate the opportunity to share with you tonight some thoughts about Africa.
And I am particularly delighted that President Thabo Mbeki is amongst us. He has a genuine vision for Africa. It is a vision for the Renaissance of Africa.
I will never forget my first meeting with President Thabo Mbeki in Johannesburg in the year 2000, at that time in my capacity as Managing Director of the IMF. The President gave me an insight into his thinking about Africa’s development. It is anchored in the will to African selfdetermination and at the same time of cooperation with the world outside of Africa. Thabo Mbeki is one of the founding fathers of NEPAD, the New Partnership for Africa’s development. I was privileged to work with him and even more privileged to become a friend of him.
“In my view, the humanity of our world can be measured against the fate of Africa”. These words which I said in my inaugural address as Federal President in the year 2004 continue to be at the center of my work with Africa. Too often, this was understood as a declaration of love or emotional affection for a continent in distress. However, the reality is much more complex.
At the street of Gibraltar, just 14 kilometres are between Africa and Europe. We are neighbours. So just on grounds of physical proximity, Africa matters to us. Whatever is wrong there will sooner or later affect Europe negatively as well: refugees, piracy, terrorism, environmental pollution. And whatever is right will be to the benefit of Europe as well:security, stability, economic prosperity. This mutual dependence underlines that it is in ourgenuine national as well as European interest to support Africa’s own efforts towards a good and sustainable development.
It has already been said this morning: when using the word ‘Africa’, we have to keep in mind that conditions vary dramatically between different countries and even within countries. There is not one Africa but hundreds, maybe thousands. However, in order to avoid drowning in a sea of complexity, allow me to use the term “Africa”.
Ladies and Gentlemen,
Africa’s population is very young – more than 60 % is under the age of 25 (in Germany:approximately 25% ). The Africa population will continue to grow. The United Nations havepublished estimates that by the year 2050 there will be 2 billion people living in Africa – up from 1 Billion today. This will constitute half of the increase in global population until 2050.Researchers such as Gunnar Heinsohn who used to work at the University of Bremen tell us that in history so-called ‘youth bulges’ – young men looking desperately for jobs and income or trying to found a family are at the centre of most rebellions and violent conflicts. Today,
we see many young men and women at the centre of the so-called “Arabellions” in Northern Africa. And until today, there are many young people on the shores of the Mediterranean trying to make the dangerous journey across the sea to Europe in tiny boats to seek a future that offers something better than starvation and inescapable poverty. Many of them die. For me, if we in Europe want to live up to our moral values, we have to tackle the root causes of their desperation and do our share to provide those young people with perspectives for a better life in Africa. This is possible.
Despite all the problems like war, poverty, hunger etc. which are all too familiar to us, we are currently witnessing deep change in Africa which we may still not have realized to its full extent here in Europe. In its 2011 Report the Africa Progress Panel, chaired by former United Nations Secretary General Kofi Annan, made the following statement "What was termed 'the hopeless continent' ten years ago has now unquestionably become the continent of hope." This Progress Report is entitled: "The Transformation Power of Partnerships". It emphasises that the African governments bear the main responsibility for the continent’s fate but that international donors, private-sector and civil society actors can and should play an important role as well. The report underlines in particular the potential of partnerships which mobilise
the energy, creativity and the resources of the private sector and those of civil society: "As businesses realize the commercial opportunities and benefits involved, they are increasingly willing to complement the development efforts of African governments and international donors, and bridge important gaps in a results-oriented (because profit-driven) manner."
Over the last years when travelling in Africa and talking to African interlocutors I observed a remarkable shift regarding the traditional focus of any talks which used to be centred on development aid. Though still important - and while still expecting that donor countries fulfil their pledges - , my impression is that aid is not any longer at the heart of discussions. My interlocutors are rather dwelling on describing business opportunities and on the change which is taking place from within their countries. They invite us to be part of this change as partners on equal footing. When they are asking for support, they very often refer to technical expertise, vocational training and fair trade which are needed to increase the competitiveness
of their businesses. So the narrative has been altered and there is good reason for this:
Today, Africa is the fastest growing region in the world after Asia. It is expected that 7 out of the 10 fastest growing economies in the world until 2015 will be from Sub Sahara Africa. The Standard Chartered Bank estimates that Africa’s economy is going to grow over the next 20 years on average by 7 % per year – even faster than China. And clearly, a new middle-class is on the rise in Africa.
A main reason for this upbeat forecast is the simple fact that Africa has the natural resources which are in need on the global markets. The demand for these resources has increased significantly over the last years, not least from emerging economies such as China and India.The USA intends to import from Africa as much oil as from Saudi-Arabia by the year 2015.More than 60 % of the world’s reserves of - for example - Coltan, Chrome or Cobalt lie under African soil.
Natural resources can be a blessing. But we all know in history too often they turned out to be a curse. And indeed, we are currently observing again old and new players are trying to secure the natural resources for their economic development and some even talk about a new ‘Scramble for Africa’. The international demand can provide a great source of economic prosperity for Africa, but the crucial task will be to ensure that this fortune will benefit the African people and will not end up – as in the past – in the private pockets of a few. But also the industrialised countries have their share of responsibility as they still mainly define
contracts and are too often involved in corruption as well.
From my experience, more and more African leaders are aware of these risks and try to find a better way forward. They want to create a modern infrastructure and accelerate economic diversification and structural reform. There is a need for a sustainable resource based African growth and development strategy which lays the ground for infrastructure as well as up- and downstream industries to create added value in Africa. Development partners can and should do their share by for example providing transparency in resource engagements as well as supporting the development of a manufacturing industry. If Africa’s resolve and outside commitment come together, I am convinced that it is possible to make Africa’s natural resources a blessing for its people and an asset also for the rest of the world.
This brings me to the topic of today’s conference: agriculture. Agriculture is crucial because all well-intentioned plans and projects on Africa’s future development will be futile and useless if Africans are still starving of hunger. We must ensure that people have an adequate supply of food from their own fields and the surrounding region. African countries need to achieve food security. This is possible: Africa has so much fertile soil which is currently not yet put to good use. It holds 60% of the world’s uncultivated arable land. Fortunately, the Africans themselves have made agriculture and food security a priority in their development strategies. We should support them in their own efforts and I understand today’s conference
as being part of this support.
Many challenges persist: How can productivity be strengthened in farming? Who can seriously expect a farmer to invest his savings in his farm and machinery if he fears he may be thrown off the land at any time? How can farmers buy machinery and seeds if they have no access to loans? How can they sell their products if there are no roads and the existing tracks are impassable after rain? Sound ways of addressing these issues do exist. The Peruvian economist Hernando De Soto has, for example, already emphasized the significance of property rights for economic development in his standard work, "The Other Path". And
clearly, commercial farming will help to mobilize capital for investments and to spread the use of modern agricultural technology. Mobile communication allows African countries to leap-frog some development steps as it is facilitating access to information about weather and markets. And mobile services in banking are already having a huge impact on the daily lives of millions of farmers and provide access to credits.
Until today, Western policies, too often play a negative role regarding the development of agriculture in Africa. For example, it supported the introduction of monocultures of export crops across vast agricultural areas in the developing countries. Instead of planting manioc for their own use, farmers cultivated cocoa for the world market – exposing themselves to the market’s volatility and failures. Monocultures to produce biofuels are an inadequate response to the problem of climate change, especially if they exacerbate water problems or cause prices for staples such as maize and wheat to rise dramatically. Bioenergy cannot be promoted at the expense of food security. And our habit of subsidizing exports - especially agricultural exports from the EU or for example cotton from the USA - makes it harder for the developing countries to establish their own production basis and markets. We have to ask ourselves if our agricultural policy is still up to date and I was glad to hear that Mrs. Ilse Aigner, Federal Minister of Food, Agriculture and Consumer Protection expressed again her intention to phase out European export subsidies for agricultural products.
A new issue has emerged over the last years: ‘land grabbing’. It means that foreign nations are trying to secure vast areas of fertile land in Africa to grow food for their own populations. The World Bank estimates that world wide approximately 56 million hectares worth of large scale farmland deals were announced even before the end of 2009. More than 70 percent of such demand has been in Africa; countries such as Ethiopia, Mozambique, and Sudan have transferred millions of hectares to investors in recent years. This development needs to get political attention. While such deals on the one hand can be welcomed as considerable Foreign Direct Investment, they have on the other hand a potential of aggravating the food
situation and cause social and political conflicts if not managed carefully.
Africa’s food security must not be compromised for the sake of foreign interests. What is required is a type of agriculture that is based on "ownership" and on functioning local structures and local know-how.
When travelling in East Africa and discussing the prospects of the East African Community in June last year. Talks with political leaders as well as entrepreneurs made it clear to me that there is a strong commitment to regional integration and for the creation of a single market. Other African regions are following the same route. African leaders know that their economies are often too small to attract investment. They consider regional integration not only as an instrument to gain access to bigger markets and to boost competitiveness but also as a way to lower their dependencies on traditional partners in Europe and shield their economies from the volatilities of the international economy. This seems to work: Studies show that a higher share of regional trade in the East African Community may have partly contributed to the sub region’s relative resilience to the financial crisis. And there is more to come: despite recent progress, intra-African trade still sums up to a mere 10 % of total exports, while in comparison trade within the Association of South East Asian Nations accounts for about 60 % of the region’s exports. This is just an indicator of the vast potential which still lies ahead while African nations are moving towards regional integration.
As we are living in a globally interconnected world, the influence of Africa with its 54 independent nation is growing on the political level as well, not least at the United Nations. The integration efforts through the African Union are a historic landmark which will – despite all persisting short comings and periodical setbacks – increase Africa’s influence on the global level. African nations want to decide by themselves about their destiny. For example,this is why the AU has put in place a Peace and Security Council and has even provided for military interventions in member states if needed and agreed by the organization’s member – setting aside traditional restraint towards any interference into the internal affairs of sovereign
countries. The AU provides troops to solve conflicts in Africa and abroad and is engaged in the international dialogue on global problems. And the Africans have set up the African Peer Review Process for economic and political developments on the continent as an instrument to learn from each other and thereby to foster an African identity.
In the European Union, we should take this serious. The members of the AU have endorsed the same values on which our own societies are built upon: Freedom, Democracy, Human Rights, Rule of Law. The global challenges like poverty, climate change, armed conflicts and terrorism are affecting all of us. Recently, during the negotiations on climate change in Durban, we have seen hints that an alliance between Europe and Africa could emerge on this crucial issue.
There is still much to be improved but I think that Africa is on the way to a reinvigorated self-consciousness and capacity to act.
My advice is that the EU as political entity should do whatever is possible to support the concept and development of the AU. I hope that the expert groups which were established as a result of the EU-Africa Summit in Lisbon in the year 2007 will identify the scope for a new quality of cooperation in concrete projects. Africa can no longer be neglected in a world policy which is directed towards fostering global security and cooperation.
A word on China: African leaders tell me quite frankly: ‘It’s an option’. Too often Africans have been disappointed by Western empty promises and are therefore looking elsewhere – not only to China but also to new players such as India, Brazil or Turkey which are increasing their presence in Africa as well. In my opinion, a lot of positive developments in African infrastructure would not be there without the investments of China. At the same time, the African leaders know rather well about the difficult side of this cooperation. Africans have to pay attention that they are not incurring new dependencies for example through new
indebtedness. The Chinese bring their own workers or often employ Africans only for the most subordinated works. And there is another development which might be even more important and which goes on largely unrecognised. Thousands of Chinese entrepreneurs are setting up shops and factories all over Africa. They are establishing those business networks which we might be lacking in the near future.
But ‘China-bashing’ won’t help. And indeed, the Chinese themselves are beginning to learn that if they want to reap long-lasting benefits from their investments they need stability and this requires creating more local content and paying attention to a stable political environment in Africa. The Chinese can and should demonstrate not least on the African continent that they have the will and the ability to pursue cooperative world politics to the benefit of all. As Europeans we should take up the challenges posed by China, India and other emerging economies and be self-conscious enough to offer our understanding of partnership, proving that we pay attention on working without corruption, provide vocational training and
employment and exercise ourselves good governance when pursuing our business interests.
Ladies and Gentlemen,
Over the last years I observed that it is worthwhile to foster a partnership on equal footing between Germany and Africa. Germany has a good reputation in Africa. We could make more out of it. Frankly speaking, in 20 years from now I am not sure whether it will be the Africans being in need of us as partners or rather us being in need of the Africans. Let me give you just two reasons why:
First, I outlined current growth trends in Africa. Africa needs growth to overcome poverty and Africa will catch up. At the same time, we are observing in Europe – and also the US – the road signs for a secular slowing down of growth trends while new growth markets are emerging in Africa. I am worried that German and European industry is slow in realising the new opportunities in Africa.
Second: Our ageing societies in Europe will be in dire need of qualified labour. To address this challenge, we should not ignore Africa. Our countries should open up to their exigencies. This would allow our societies to participate in the potentials of the African ‘demographic dividend’.
So if we need this partnership in our own interest what does it take to bring it about?
First: Credibility. It is time to be self critical with us and to address for example issues of double standards. The credibility of the USA and Europe has suffered a serious blow during the financial crisis. It has shed light on Western failing as the cause for the international financial crisis. My African interlocutors point this out rather bluntly and question if we are really any longer in a good position to give them advice on how to run an economy or government. The time that Europe, the USA or International Financial Institutions have
lectured Africans about what’s best for them is definitely over. It would greatly enhance our credibility if we talk openly about our own shortcomings and do something about them in order to find common ground for a genuine partnership with Africa.
Second: Respect. Until today, talking Africa in Europe means rather talking about Africa than talking with Africa. As a matter of fact, over the last years I got more and more humble, when I learned about the rich and diverse African traditions which determined political, social and economic rights even centuries ago. I was impressed by the rich heritage as there is so much more to be discovered than just drums and dances. We all know that Africa is the cradle of mankind. I learned about the Kurukan Fuga which served as a kind of constitution of the Mali Empire going back to the 13th century and which has been preserved through oral tradition. It afforded uniform rights for all citizens including women and slaves, for example protecting
the right to life and preservation of its physical integrity, as well as stressing the importance of children’s education. Does it have a place in the Western discourse about the development of fundamental rights in human history?
Today, we are witnessing vibrant discussions in Africa on what is best for Africa’s development. Development in Africa will only be sustainable if it’s based on African ideas and African solutions. So if we want to succeed in Africa, we have to know how the Africans want to achieve success. We should carefully listen to African voices and take them serious.
Africa’s rich culture and history, it’s vibrant vitality and the optimism and spirit of its people can and will be sources of strength for us in the North, but only if we are ready to listen and cooperate with respect.
Third: Action. I sincerely hope that – not least through this conference –more and more entrepreneurs realise Africa’s new potential and get involved. The opportunities are there and need to be explored – to the benefit of both sides.
Ladies and Gentlemen,
I hope you will not take from my remarks tonight that my approach is to simplistic or full of unwarranted optimism. Of course, huge difficulties persist – I tried to outline some - and there will be setbacks in the future. But overall, I am convinced that we are witnessing the rise of a continent which has been neglected far too long. Now is the time for a genuine partnership on equal footing. Africa will not wait for us. So let’s wake up!