GIGA Analysis: G20 Investment Compact for Africa Falls Short

Hamburg, 9 June 2017. The German federal government will hold a conference in Berlin on 12 and 13 June entitled “G20 Africa Partnership – Investing in a Common Future,” where the G20 initiative “Compact with Africa,” meant to promote private and infrastructure-related investment in Africa, is to be advanced. A new analysis from the German Institute for Global and Area Studies (GIGA) takes the critical view that the G20 investment agreement for Africa falls short and that improvements are greatly needed.

The Compact with Africa initiative “might support development in Africa, but alone it will not be decisive,” writes Prof. Dr. Jann Lay, Director of the GIGA Institute for African Affairs, in the analysis. “The initiative addresses a key mechanism of economic (under)development, but the coordination problem that explains Africa’s low income levels extends well beyond the realm of investment and infrastructure. An investment plan that fails to recognise this is bound to fail.”

The expert identifies four areas that the G20 initiative should bring into sharper focus: investment in education, more responsibility on the part of the G20 in terms of trade and investment policy, a consideration of social and ecological risks, and the integration of the initiative into a comprehensive, sustainable development agenda. “Support to Africa can only succeed as a long-term endeavour.”

The complete analysis GIGA Focus Africa 2/2017: “The G20 Compact with Africa: An Incomplete Initiative” is available free of cost on the GIGA website.

In the run-up to the G20 summit, the GIGA publishes short analyses on various aspects of the G20 and discusses these ideas at public events. Further information can be found at www.giga-hamburg.de/g20.