Merkel pledges more cash to underwrite private investments in Africa

By Michael Fischer, dpa

German Chancellor Angela Merkel has pledged to increase the extent to which the government in Berlin underwrites private investors in Africa against political risks and irregular payment practices.

She made the pledge on Tuesday as host of a summit in Berlin aimed at increasing private investment in Africa.

In addition, the creation of a fund should specifically support investments by small and medium-sized European and African companies with shareholdings and loans.

Merkel’s package of measures also includes other agreements to avoid double taxation of companies.

“We want to send a strong signal together today, namely that we are in a good and profitable co-existence between Africa and Europe,” the chancellor said in front of entrepreneurs and African leaders.

She had already launched an initiative for stronger investments in Africa during the German presidency of the Group of 20 (G20) major world economies last year.

This included so-called reform partnerships, in which aid is paid only if certain promises of reform are fulfilled.

The German government has so far provided 365 million euros (414 million dollars). Merkel did not initially say on Tuesday how much new cash was involved.

The chairman of the Africa Association of German Business, Stefan Liebing, welcomed Merkel’s package of measures. It was “almost a historic announcement,” he said. “We now have the basis upon which we can get started.”

For 2018, German business expects to make investment decisions worth 1 billion euros for Africa.

To convert that figure to 2 or 3 billion, investments from medium-sized businesses would have to be boosted, Liebing said.

Eleven African heads of government and state were invited to attend the forum, as well as Austrian Chancellor Sebastian Kurz, whose country currently holds the rotating European Union presidency.

Egyptian President Abdel-Fattah al-Sissi is among those taking part, and he is also set to hold bilateral talks with Merkel.

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