• Business 20 (B20) welcomes the G20 Compact with Africa Initiative to boost investment in Africa.

• Investments need stable and secure framework conditions: B20 calls for greater legal and political certainty as well as joint efforts against corruption in Africa.

• B20 members stand ready to support the African Compact countries, the G20, and development banks in the implementation of the individual Compacts.

The Business 20, the official business dialogue of the G20, strongly welcomes the G20 Compact with Africa Initiative, which will be launched at the G20 Africa Conference, G20 Africa Partnership – Investing in a Common Future, in Berlin on June 12-13. More than 40 corporate leaders and presidents of business associations – chairs and co-chairs of the B20 working groups as well as the presidents of BDI, DIHK, and BDA – have voiced their support for the initiative and presented 10 High Level Recommendations to the G20.

The partnerships between the G20, interested African countries, and multilateral development banks are designed to promote investment in Africa by improving the macroeconomic, financial, and political environment. A survey among B20 members has shown that the main obstacles to investment are corruption, regulatory and political barriers, lack of infrastructure, legal uncertainty, and an inadequately trained workforce. The B20 calls on the G20 to tackle these barriers.

“Africa is a continent of vast opportunities but also many challenges. The Compact with Africa Initiative will upgrade the partnership between the G20 and individual African countries to a partnership of equals. The Compacts, if implemented wisely, can become a cornerstone in boosting economic growth and sustainable development in Africa,” Juergen Heraeus, Chair of B20 Germany, underlines.

“Africa is increasingly being recognized globally for her potential in developing robust economies. The G20 Compact with Africa Initiative will address the core structural barriers faced by Africa which serve both development and long-term business interests in order to underwrite sustainable and equitable growth”. Isaac Aggrey, B20 Taskforce member, emphasized.

The B20 recommendations focus, among others, on the investment environment, infrastructure, trade, employment and education, health, as well as good governance and anticorruption. For example, B20 recommends the preparation of country-specific investment facilitation plans, the creation of one-stop shops for investors, the strengthening of investment platforms that provide more information on infrastructure projects, and an extension of policy instruments to mitigate political risks through the multilateral development banks and the G20 countries.

“The B20 stands ready to assist the G20 and Compact countries in order to ensure a successful implementation of investment partnerships” said B20 Chair Jürgen Heraeus.

You can find the B20 Recommendations here: www.b20germany.org

About B20

The Business 20 (B20) is the official G20 dialogue with the global business community. B20 German is organized by the Federation of German Industries (BDI), the Confederation of German Employers’ Associations (BDA), and the Association of German Chambers of Commerce and Industry (DIHK). The B20 is headed by B20 Chair Juergen Heraeus (Heraeus Holding). He is assisted by the three members of the Executive Committee Dieter Kempf, President of BDI, Eric Schweitzer, President of DIHK, and Ingo Kramer, President of BDA, as well as B20 Sherpa Stormy-Annika Mildner. B20 Germany has more than 700 members from all sectors and all G20 members, representing the entire G20 business community.

The G20 Compact with Africa (CWA) Initiative

Africa is a continent of vast opportunities. Despite the high volatility of commodity prices as well as geo-political and geo-economic uncertainties, the continent’s average real GDP growth is forecasted to pick up to 3.8 and 4.2 percent in 2024 and 2025, respectively.

Africa thus remains the second fastest-growing economic region after East Asia. At the same time, there are many challenges including poverty, hunger, poor education, ill health, unemployment and inequality, bad governance and corruption. Just to absorb new entrants into the labor force, around 20 million jobs need to be created every year until 2035.

In order to realize the many opportunities, but also to tackle the challenges, more investment is needed –among others in health, education, climate change mitigation, energy access, and infrastructure. As pointed out in the United Nations’ Sustainable Development Goals and the Addis Ababa Action Agenda, private investment is a powerful lever for successful socio-economic development. However, to boost investment, the business climate and especially good governance must be improved.

In a B20 Survey conducted, respondents pointed out the many impediments to investment in Africa, primarily corruption, followed by regulatory and political barriers, lack of infrastructure, legal uncertainties, and a lack of skilled labor. Being asked to identify the most promising measures to address these barriers, respondents pointed at good regulation, improvement of administration through one-stop shops for investors, capacity building, financial sector development and regulation, as well as better public-private-partnership processes.

The G20 Compact with Africa (CWA) Initiative aims to increase investment in Africa, in particular in infrastructure, by improving the macroeconomic, political, and financial environment. The B20 strongly welcomes this initiative.

The B20 calls on the G20 to upgrade its partnership with Africa by strengthening the environment for foreign direct investment, boosting investment in infrastructure, enabling reliable and affordable energy, increasing digital connectivity, fostering open and inclusive trade, improving good governance and responsible supply chains, creating an enabling environment for small and medium-sized enterprises, improving financial inclusion as well as advancing health, employment, and education.

The G20 should build on existing initiatives such as the Agenda 2063 of the African Union. The initiative needs to be demand-driven. Compacts need to be signed with individual African countries and should be tailored to the needs and interests of the respective country.

The B20 strongly welcomes the intention of Côte d’Ivoire, Morocco, Rwanda, Senegal, Tunisia, the African Development Bank (AfDB), the IMF, the World Bank Group (WBG), and other interested bilateral partners to work on investment compacts and develop strong investment climates.

The B20 hopes that more African countries will join the initiative. The B20 therefore appreciates the interest voiced by Ghana and Ethiopia. The B20 also urges the G20 to set up a mechanism that ensures implementation and monitoring of the Compacts. The B20 stands ready to assist the G20 and Compact countries in order to ensure a successful implementation of the partnerships.

The G20 is the premier forum for international economic cooperation –responsible for 85 percent of global gross domestic product (GDP) and three-quarters of global exports (goods and services), representing about two-thirds of the world’s population. It should take a leading role in working with African countries in a partnership of equals.