AU urges ‘positive competition’ from Europe on investment

BERLIN: The African Union defended past investments from China that have drawn criticism for saddling poor countries with huge debts while calling for “positive competition” from Europe.

BERLIN: German Chancellor Olaf Scholz (back center) chairs a session of the Conference on the G20 Compact with Africa, at the Chancellery in Berlin on November 20, 2023. --AFP.

AU chairman Azali Assoumani was addressing a meeting in Berlin of a G20 initiative aimed at mobilizing more private, sustainable investments in African countries. China has been pouring huge investments into the continent in recent years, helping fund projects from railways to ports.

Assoumani said there was “a high demand in African states”, and “sometimes we take on debt in less than ideal conditions”. However he continued: “I can assure you that everything is changing... we are trying to correct mistakes”.

There was a need for “positive competition. There is no monopoly anywhere... Everyone has a place,” he said at the “Compact for Africa” initiative, launched in 2017 when Germany held the G20 presidency. “The problem we sometimes have in Africa is that we are unable to invest because we are paying debts”. Beijing has been accused of using its creditor status for gaining diplomatic or trade concessions in its relations with African countries.

But China, the world’s number two economy, rejects practicing “debt-trap diplomacy” as an unfair criticism from Western rivals who have themselves burdened nations with huge debts.

The “Compact for Africa” brings together the G20 and 13 African countries, with support from organizations including the World Bank and International Monetary fund. The G20 itself comprises 19 of the world’s largest economies plus the European Union and the AU. The German government pledged Monday to invest 4 billion euros ($4.37 billion) in African green energy projects until 2030, with Chancellor Olaf Scholz saying that countries in Africa should benefit more from their wealth of raw materials. Scholz discussed the pledge at a news conference on the G20 Compact with Africa summit taking place in Berlin. He did not mention any specific projects but said the materials used in green energy should be processed in the African nations they come from.

“This creates jobs and prosperity in these countries,” Scholz said. “And the German industry gets reliable suppliers.” Compact with Africa is based on an initiative launched by Germany during its chairmanship of the Group of 20 leading rich and developing nations. It aims to improve the economic conditions in the participating countries in order to make them more attractive for foreign private investment. Scholz said Germany should become a long-term and reliable partner to countries in Africa.

“Africa is our partner of choice when it comes to intensifying our economic relations and moving toward a climate-neutral future together,” he said. The Compact with Africa countries include Egypt, Ethiopia, Benin, Burkina Faso, Ivory Coast, Ghana, Guinea, the Democratic Republic of Congo, Morocco, Rwanda, Senegal, Togo and Tunisia, according to German news agency DPA. Asked about China’s strong presence in Africa, several African leaders said the continent was open to other partnerships.

“Perhaps China was more audacious, perhaps they have more vision and perhaps they trusted the potential in Africa,” Moussa Faki, the chairperson of the African Union Commission, said. “The African continent is open to different partnerships,” he added. “Our wish is for you to place your trust in us, to impose less conditions and to create the conditions together. “Improving governance, that’s our responsibility, and therefore this shared vision could allow, I’m certain of it, for a large capital that could be invested in the continent,” Faki said. – Agencies.