Germany boosts aid for African deals to woo allies, counter China’s charm offensive

Germany is set to increase its state guarantees for business investments in African countries, a move widely interpreted as being aimed at diversifying trade relations and to make it more independent from China.

In September, China removed tariffs on 98% of agricultural and mineral imports from nine of Africa’s poorest countries. The decision follows Chinese President Xi Jinping’s announcement at the China-Africa summit in November 2021 that steps would be taken to increase the import of agricultural products from Africa.

Yet, Experts caution that the move benefits China’s image, but has little economic impact.

“There will be additional incentives to invest in regions like sub-Saharan Africa where we want more German investments and more German trade,” German Economy Minister Robert Habeck said while opening a German-African business conference in Johannesburg on Wednesday (7 December). The announcement is widely seen as reflecting Germany’s strategy to diversify its global trade relations, as reflected in Habeck’s recent warning that the country needed to reduce its focus on China.

Habeck also views the African continent as an ideal place to boost the production of renewable energies as an alternative to Russian gas. “Fossil energies are not the future, they are actually the past,” Habeck said, urging the 700 business representatives to invest more in wind and solar energy. More than 80% of electricity in South Africa is still produced in coal plants, and the country currently experiences numerous blackouts which especially harm industrial production.

Earlier this year, German Chancellor Olaf Scholz already signed deals that will see Germany help African nations build their infrastructure to extract and export oil and gas to Europe. He also promised to keep German troops in the Sahel. During his first trip to Africa since taking office that took him to Senegal, Niger and South Africa, Scholz said: “Africa is Europe’s neighboring continent and it is therefore essential that we make intensive efforts to maintain very good relations with all states” in [the continent].