Berlin, 30 October 2018
Good morning. It is my pleasure to be back in Berlin, and I thank Chancellor Merkel for the invitation.
Since our meeting last year, there have been major developments at the African Union. The integration of our continent is growing deeper, and this is significant for business. As a result of financial and institutional reform, the African Union has achieved savings of 12 per cent in our next budget, and Member States are paying a greater share of the bill.
We also signed agreements on the Free Movement of Persons and the Continental Free Trade Area, making Africa a single trading bloc. This marks a historic shift in how Africa does business with itself, and the world, and particularly in this case, Germany. South Africa is the latest country to announce plans to ratify the CFTA. I congratulate President Ramaphosa for this step. It confirms the serious political will behind the African integration agenda.
The G20 Compact with Africa therefore comes at the right time to reinforce Africa’s enterprise-based development consensus. The initiative builds on the strong relationships we enjoy with Germany, the European Union, and other G20 partners, as well as similar programs with the multilateral institutions, the World Bank and the African Development Bank among them.
As such, the Compact with Africa has every ingredient for success. But pouring new wine into old bottles is not a winning formula. We have to challenge ourselves to go beyond the usual routines.
We fully share Chancellor Merkel’s impatience to achieve measurable and sustainable results through new projects. After all, the best way to speed up business climate reform is to attract more global firms to Africa, and small- and medium-sized businesses as well. This produces a demonstration effect, which in turn generates even more productive investment. In other words, a virtuous cycle.
The Volkswagen “Moving Rwanda” venture, which Thomas Schaefer will present in the next session, is a very good example of what is possible. Let me share three important features of this project that have broader relevance.
First, the supply chain involves multiple countries in East and Southern Africa, in a “hub-and-spoke” system. A regional approach is key to achieving economies of scale in Africa. Continental integration is also making this an increasingly viable strategy, as I referred to earlier.
Second, Africa can be a global innovation laboratory. East Africa is a young market for new car sales. But we have a great need for mobility solutions, which raise the productivity of the wider regional economy. Volkswagen is not only assembling vehicles in Rwanda, it is pioneering next-generation business models for shared, environmentally-friendly transport.
Third, Volkswagen’s approach has attracted other major players that might not otherwise be in Rwanda, notably Siemens.
But it would not work without local talent. In fact, Volkswagen Rwanda already employs dozens of young Rwandans and East Africans. The senior management team includes a number of young Rwandans who graduated from universities here in Germany. And a youthful Rwandan start-up company is developing the ride-sharing software. I should add that the German Development Agency (GIZ) continues to play an important supporting role.
There is a tremendous amount that we can accomplish together, if we focus on funding and de-risking creative investments led by the private sector, such as the ones we will learn more about today.
I thank you for your very kind attention.