Germany risks missing opportunities in Africa

China invests, India trades, and the Gulf States build. And what does Germany do? It often just watches.

As the global competition for Africa's markets and raw materials escalates, German policy continues to lack strategic clarity. There is a lot at stake: Economic opportunities, geopolitical influence, and long-term partnerships.

Something needs to change, German Vice Chancellor Lars Klingbeil said. At a G20 meeting of finance ministers in the South African city of Durban, I have emphasized that partners in the global south share an interest in stable trade relations and respect for human rights. The task was to strengthen the economic relationship between Germany and South Africa — as well as that between Europe and Africa as a whole.

A few days earlier, the Sub-Saharan Africa Initiative of German Business (SAFRI) called for a strategic reorientation. The so-called "Africa turnaround" was long overdue, it said. How realistic is this wish for renewal? And what is standing in the way?

More competition
Trade data paints a sobering picture: German exports to the region have been stagnant for more than a decade. In 2014, they were valued at €13.3 billion ($15.6 billion), 10 years later, only €14.2 billion in German exports was traded. Accounting for inflation, the growth rate is virtually zero.

Africa has no lack of economic dynamism. Countries such as Tanzania, Ivory Coast or Senegal have been recording robust growth rates for years. Demand for infrastructure, consumer goods and energy is rising across the continent, also fueled by rapid population growth. A big opportunity for German exporters.

The main beneficiaries of these developments are, however, elsewhere: Companies from China, India, Turkey or the Gulf states clinch the biggest contracts. China has multiplied its exports and investments in Africa over the past 20 years. German firms, by comparison, have lost market share in many sectors.

"A new race for Africa is taking place due to the relative decline of the EU and the US," according to political scientist Kai Koddenbrock from Bard College in Berlin said.

The treasure in Africa's soil
A key example of this is the global competition for critical raw materials. Africa has a key role here. Whether cobalt, bauxite, lithium or rare earth: many of these strategically important minerals are already being extracted from the African continent or remain untapped. They are essential for making batteries, wind turbines and electronic motors — technologies central to green and digital transformation.

As global demand rises, especially China is securing access to these resources — often supported by long-term infrastructure projects and a clear industrial-political strategy.

US President Donald Trump has also begun a charm offensive.

Germany, on the other hand, risks falling behind. German industry is now sounding the alarm: China accounts for more than 60% of rare earth mining and almost 90% of refining. The recent export restrictions from Beijing have suddenly laid bare Europe's dependence.

Germany has a lot to offer
Has the game already been lost? Christoph Kannengiesser, CEO of the German-African Business Association, doesn't think so. He sees Germany as having a favorable starting position, due to its good reputation in Africa.

"Our companies are already doing very special things," Kannengiesser told DW. Instead of mining raw materials, German interests are most focused on greenfield investments, local partnerships, and the development of sustainable structures.

Many German companies are well known for implementing know-how in their African locations. Germany's policies come across as unpretentious, "especially at a time when African countries are increasingly focused on self-responsibility and industry development, which could be a decisive competitive advantage," the economist said.

Kannengiesser pleads for the German government to pick up the peace. A coherent Africa strategy has so far been lacking. The latest plan was finalized shortly before the election late last year, far too late to show any effect. Such a strategy needs to guide action for years, he said. Germany needs to finally have an ambitious, differentiated plan, he concluded.

"A lot has happened in the past 10 years," said Tom Halgasch, founder of Das Labor GmbH which since 2011 has operated medical laboratories in Guinea, Ivory Coast and Togo. He observes however, that Germany's neighbors such as Belgium, the Netherlands or France, often have easier access. "They see economic engagement in Africa as part of their foreign policy. If, for example, a permit is not forthcoming, the embassy will take action."

In addition, there are practical hurdles such as financing, visa issues, or a lack of double taxation agreements. The entrepreneur from Potsdam wishes for Germany to integrate foreign trade, diplomacy, and development cooperation more strongly in the future.