The need for internal investment among African nations is "colossal," according to African Union (AU) Chair Azali Assoumani.
Speaking at the G20 Compact with Africa (CwA) summit in Berlin on November 20, Assoumani said that while investment in African nations from G20 countries is inching above pre-pandemic levels, it still falls "far short" of the record amount of almost $53 billion (€48.4 billion) reached in the 2017-2018 fiscal year.
Aiming to spark greater private investment in Africa, the CwA initiative brings 13 African members together with representatives from the G20 major economies, the World Bank, the International Monetary Fund and the African Development Bank.
And leaders' comments at the summit illustrated the appetite of Africans to diversify their relationships and their trading partners, including with Germany.
Assoumani, who is president of the Comoros and holds the rotating AU chair, used the summit to defend Africa's embrace of investment from China and call for more "positive competition" from Europe.
"There is no monopoly anywhere. ... Everyone has a place," he said on Monday.
Highlighting to the continent's "vast potential," African Union Commission Chair Moussa Faki Mahamat said investors stand to benefit from Africa's young population and considerable natural resources.
'High-ranking' G20 Compact with Africa event
Nigeria's President Bola Tinubu, Ethiopia's Prime Minister Abiy Ahmed and Senegal's President Macky Sall were among the 18 African leaders who traveled to Berlin for the summit, where around 800 companies were represented.
Underscoring renewed interest in Africa, European Commission President Ursula von der Leyen, and French President Emmanuel Macron, as well as numerous ministers, attended the summit, hosted by German Chancellor Olaf Scholz.
The event, with high-ranking politicians and business representatives, "demonstrates a certain amount of progress," said Africa economist Robert Kappel, adding that he hoped it would mark a "new beginning of stronger Africa relations."
"Now we just have to see if more investment flows from G20 countries and from Germany, and if the promises will be realized," he told DW. "But I still have doubts as to whether this will really happen so quickly and whether there will really be a breakthrough."
Africa a low priority for Germany
Launched in 2017, during Germany's G20 presidency, the CwA has been running for six years now.
"The results are hotly debated," said Alex Vines, the Africa Program director at Chatham House, a London-based policy institute, adding that it's unclear if initiative members are experiencing more growth.
African countries have long complained that while European nations talk a great deal about investment, their companies are slow to put money into Africa — despite a number of countries such as Ghana, Senegal and Rwanda significantly improving the conditions of doing business over the past several years.
Germany, Europe's biggest economy, lags behind when it comes to investment in Africa. Between 2016 and 2020, €9.7 billion in direct foreign investment flowed from Germany to Africa.
"That's tiny compared to other European countries," Vines told DW, with Germany spending only half as much as France and three-fifths as much as the UK.
Only 1% of the €163.7 billion that German companies invested in foreign countries in 2022 was spent in Africa. More than half of that direct foreign investment went to South Africa, where around 400 German companies operate.
In contrast, only 30 German companies operate in Nigeria, Africa's biggest economy.
"German companies created just 30,000 new jobs in the last 10 years in Africa. That is 3,000 jobs per year, which is very, very little," said economist Kappel.
He believes Africa offers numerous investment possibilities for European firms beyond natural resources, such as in the industrial and food sectors, agriculture, tourism and the service industry.
Germany to invest in Africa's green energy
At the summit, German Chancellor Scholz pledged to invest €4 billion ($4.4 billion) in green energy projects in Africa by 2030, adding that Germany will import "a large proportion" of its green hydrogen needs from the continent.
"Hydrogen production requires considerable investment at the start, so clear signals for a long-term and durable cooperation are needed," Scholz said. "The Compact with Africa conference aims to send the signal: You can count on Germany as a partner."
Geopolitical expert Ovigwe Eguegu sees Scholz as being "very committed" to building a better working relationship with Africa. Scholz recently made his third trip to the continent since becoming German chancellor nearly two years ago.
"He has put his boots on the ground, as it were, and is really engaging directly in high-level diplomacy," Eguegu told DW.
African nations, he said, want to attract more value-added projects but German and other European nations often fail to prioritize them.
"It's still the same old model of you come with a couple of billion euro and then you invest in extractives. But the continent's priority at this point is to move beyond that," Eguegu said.
"The Compact with Africa also has to be based on the priorities of Africa, not just the priorities of one side."
Edited by: Jon Shelton