As Africa continues its strong economic growth, a growing number of German companies are looking at investing in the continent amid growing international competition for Africa’s resources and markets.
German firms are increasingly doing business in Africa. The German-African Business Association, which promotes trade and investments in Africa, now has nearly 700 members, including global companies such as Siemens and steel giant ThyssenKrupp.
But it is medium-sized enterprises, some of which have been dealing with Africa for decades, which are responsible for the bulk of German trade with African countries.
However, Germany needs to make sure it doesn’t get left behind.
China has become Africa’s biggest trade partner
Competition to do business in Africa is stronger today than ever before, the chairman of the German-African Business Association, Stefan Liebing, said in an interview with DW. He pointed out that public and private companies from China, India and Brazil are becoming increasingly involved in the continent.
German companies with no experience of the African continent often fear the risks they associate with Africa, Liebing noted. In addition, German products can be too costly for developing countries that often opt for cheaper goods.
“Everywhere you go in Africa, you hear that German quality and technology are appreciated but the German products are often more expensive,” Liebing said.
Thirst for know-how
As well as products that are tailored to the African market, projects that involve knowledge transfer are also of interest to Africans.
Whoever delivers the technology should also follow this up with training. An example is the renewable energy sector, which is going to be vital in building a reliable future energy supply in Africa, according to Nigeria’s Minister for Science and Research, Okon Ita Bassey Ewa. During a recent visit to Germany, Bassey Ewa spoke of his desire to set up partnerships between Nigeria and Germany, especially between universities.
Demand for energy is drawing many to Africa
“This could lead to Nigerians coming to Germany to study how to build solar cells,” the minister said.
Several African countries are also looking towards Europe to provide them with nuclear power know-how.
Even though nuclear energy has become increasingly unpopular in Germany, Bassey Ewa said Germany would be a welcome partner in achieving Nigeria’s nuclear power ambitions.
Made in Africa
Many African states have been pushing to better utilize their resources by employing more local staff, producing technical equipment or processing raw materials locally. This is especially true in the oil and gas sector.
Siemens is preparing to raise its ‘local content’ in African countries such as Ghana, Angola and Nigeria in the coming years to almost 90 percent.
German power-plant builders could even imagine Nigeria producing its own turbines at some point.
“We are now investing in a workshop to repair turbines; this is a first step toward production,” said Toyin Abegunde, Head of Personnel Development with Siemens in Nigeria. “If we can successfully repair turbines in Nigeria then we could produce the next few components of the turbines on site.”
The next step perhaps would be for the the entire production process tto tke place in Nigeria, she said.
Siemens is also seeking to employ more local people in management positions. Toyin Abegunde is a good example – a German had previously occupied her post.
More Africans are taking on business leadership roles
To develop qualified staff, Siemens in Lagos has established a training academy which runs a six-month career program for youth.
“Twenty university graduates are receiving training on energy technology,” Abegunde said. “We are committed to hiring two or three of them, provided they show excellent performance.”
The Siemens spokesperson believes all sides benefit from highly trained indigenous people, since expatriates from industrialized countries are often very expensive to hire. And many foreign companies find it hard to send expatriates to some African countries due to security reasons.
Author: Thomas Mösch / cm