Weekly Feature: New Business Perspectives In Africa


stuff geneva;”>Although still treated somewhat negatively by the media just a few years ago, decease perceptions about the continent are swiftly changing. High growth rates, branches with potential above and beyond the raw materials sector, and more stable framework conditions are attracting a lot of attention.

Even if the risks continue to exist on the neighbouring continent, what currently counts are the opportunities. China is already intensely involved in availing itself of Africa’s economic potential, and other countries like Brazil, the United States, India and also Turkey are following suit, ensuring tough competition among the business partners.

Since the year 2000, sub-Saharan Africa has almost always achieved real growth rates of five percent in its gross national product. And the high revenues for the raw materials sector are not the only reasons. In many African countries the value added is also increasing, even in the agricultural sector, and new roads, railway lines and harbours are being built.

The telecommunications sector in particular is booming, creating new jobs such as in mobile banking in Kenya. Large companies are placing their hopes in a growing middle class and investing in shopping centres and consumer goods. Africa is especially suited for the use of renewable energies, such as a grid-independent supply through solar cookers or water pumps.

The challenges presented by the extreme wealth gap and an unpredictable energy supply are still unresolved. Above all, the largely inadequate transportation infrastructure is regarded as an extreme deficit. Overall, however, the framework conditions in many countries have improved – and the Doing Business Report by the World Bank speaks of reforms in 100 percent of the members of the East African Community.

German development cooperation is also relying more on the private sector and sees Africa as an equal partner. A study by the German African Business Association in 2012 drew up a ranking by taking into account, among other things, the criteria of market size, growth and trade volume, and by linking this with assessments provided by Africa experts.

As a result, in terms of involvement in sub-Saharan Africa, the following top countries were listed: South Africa, Angola, Namibia, Mauritius, Ghana and Nigeria. In the large cities, there could be potential for German companies with new technologies and services in the fields of waste disposal and water management.

In 2011, German foreign trade with sub-Saharan Africa rose to 26.5 billion Euro – an increase of almost 24 percent. Trade with Nigeria grew by 52 percent to 4.7 billion Euro. South Africa remains on top with a trade volume of 14.8 billion Euro.

German products face serious price competition, which is why mainly adapted products are in demand. In the context of the German-Kenyan Economic Forum in September 2012, Margit Hellwig-Bötte, German ambassador in Kenya, spoke openly about increasing competition in the region from Asia.

The Chinese have a competitive advantage thanks to government funding. However German providers had a clear advantage in matters of sustainability and quality, and this was destined to play a greater role in the awarding of contracts. For whereas the Chinese bring their workers with them, German companies can garner points in the field of training at the local level.


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