Foreign direct investment (FDI) can sustainably strengthen the development of the African continent so that the people that live on it “can create real opportunities and prospects for themselves and their families”, says Günter Nooke, who is the African representative of German Chancellor Angela Merkel.
He says that, in order to achieve this, the European Union (EU) and countries therein – like Germany – should focus on economic development, but adds that “this is not possible without the help of the private sector”.
“We don’t need to re-invent the wheel in and for Africa, but it’s a matter of industrialisation,” Nooke says.
However, he highlights that many parts of Africa’s private sector are based in the informal sector and characterised by either a lack of electricity or bad governance, and other challenges, meaning that foreign investors “have to keep solutions based on the reality of the ground in Africa”.
He suggests key factors to keep in mind that are meant to help Africa grow include the investment climate, a stable institution and legal framework, infrastructure and a well-trained labour force.
However, on the way to economic prosperity for the continent, Nooke laments the continent’s lack of infrastructure, insufficient amounts of which “means less productivity”.
It is in this area, specifically, that Nooke encourages foreign investors to get involved, as a lack of transport infrastructure “also means opportunities” for FDI.
Other investment areas include education and training, “which are priorities for most African countries”, and investing in a well-trained workforce.
With “time being of the essence” as pressure continues to increase, Nooke suggests there are “encouraging trends” that present investment opportunities on the continent.
These include digitalisation, geopolitical commissions, the climate and going green.
With regard to the latter two areas, Nooke says Africa “is prone to the production of renewable energy”, which is something he believes Europe needs to advance in order to achieve its green energy goals, requirements and responsibilities.
The sale of green hydrogen production, or renewable energy, to the EU is “a huge opportunity for Africa”.