AFRICA

By XOLISAPHILLIP inJohannesburg

German businesses have long overlooked thecontinentin favour oflucrative marketselsewhere. In 2021, only 1% of Germany’s foreign direct investment wentintoAfrica –a figure of €1.6bn($1.7bn), of which €1.1bn was sub-Saharan Africa.Butthisisallduetochange. Risingtensionswith Moscow and Beijinghaveforced a rethinkand the governmentis keen to foster opportunities inthe world’s fastestgrowingcontinent.

“Russia’s war ofaggression inUkraine represents a clear break in German foreignand economic policy,” says Christoph Kannengiesser, CEOofthe Berlinbased German-AfricanBusiness Association (Afrika-Verein).

“Africancountries, whichhave so far received onlymarginal attention,are now emergingas attractive partners,” hesays.

Now 90 yearsold,theAfrikaVerein counts550members, representing 85%of German business interestsinAfrica.Itsmembers workin numeroussectors, from financialservices, energyand manufacturingtochemicals, pharmaceuticalsand shipping. They include suchcorporategiants as Allianz,Airbus Defenceand Space, BASF South AfricaandBayer.

Middle-classmarkets

Economic indicators pointtothe continentas the nextmajorgrowth regioninthe world,addsMartina Biene, managingdirectorandchairperson for the VolkswagenGroup SouthAfrica(VWSA). She says the company is determined nottomiss outonthe wave ofgrowthcoming toAfrica,hometothe world’s fastest-growingmiddle class

In all,some600 German companies are doing business inSouthAfrica,withtotaltrade between thetwo countries adding uptoR266bn ($14.7bn) a year

In2022, South African exports to Germany wereworth$8.83bn, accordingtothe UN Comtrade database, with vehicles asthe major earner

Oneimmediate consequence of theconflictinUkraine has been Germany’s overnightscramble to secure new energysuppliers.

For more than a decade, businesses andhouseholds inEurope enjoyeda steadystreamofRussian gasflowingthrough the 1,200-km Nord Stream pipelineunderthe Baltic Sea. WithNord Stream 2 comingonline, thepipelines were projected to secure Europe’s energy supply for thenext50 years.

ButNordstream1 isclosed indefinitely and mired incontroversy over whoplanted explosionsthat have caused leaks, and Germany suspended certification ofNord Stream2 as a sanctionagainst Russiaatthestartoftheconflict.

AccordingtotheAfrika-Verein, thecontinent is well positioned as

Senegal’sgascouldease theGermanenergycrisis

analternative source for Germany’s energyneeds, while helping efforts todiversifysupply and value chains. Senegal’s gas fieldscould easethe Germanenergybottleneck while Namibiaoffersthe potential toproducegreen hydrogen,says Kannengiesser

Unlockinginvestment

TheAfrican Energy Chamber (AEC), aSouthAfrica-based trade groupthat billsitself as ‘the voice oftheAfricanenergysector’, aimsto capitaliseonthepositive sentimentstounlockEuropean investment. The continent requires upto$1.7trn to boost upstream gas productionand become a significant force inglobal gassupply.

InpartnershipwiththeAfrican Export-Import Bank andmarketresearch firm RystadEnergy, theAEC is on a charmoffensive inEuropethat kicked offin Londonand Oslo in January. On 23 February, theChamber hosted an InvestinAfricanEnergy reception in Frankfurt to arguethatthe continentholdsthe keys toEurope’s energycrisis.

“German companies have the technologyand expertisethat Africaneeds,” says NJ Ayuk, theChamber’s executive

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