, , , , , , , ,

Image: Highway

full text: http://blogs.die-gdi.de/2017/02/22/a-new-basis-for-the-cooperation-with-africa/#more-1164

A new basis for the cooperation with Africa

Seldom is the African market discussed in terms of an opportunity for international cooperation. As long as Europe and the USA subsidise their agriculture, African farmers have no place within the European markets. A stable middle class struggles to develop in consequence. Germany and Europe could help trigger a turnaround if processes of endogenous development were supported by economic measures and technological and research collaborations.

„The missing middle“

It would be good to introduce a little more economics into the debate around the cooperation with Africa. Only those who produce on an industrial scale can also create jobs; only those who create a modern agriculture linked to the food industry can kick-start the necessary endogenous dynamic. This is the first point to note.

A second aspect is also of relevance. Many analyses demonstrate that large and medium-sized formal enterprises are the exception rather than the rule in Africa. A mid-tier sector is virtually non-existent, which is why „the missing middle“ is a frequently-heard phrase. The number of medium-sized businesses is very low.

No mid-tier sector without market integration

A third point is that industrialisers lagging behind the main pack – as is the case with the majority of sub-Saharan countries – face a problem. Industrialisation can no longer be viewed as a panacea for growth and employment. Poorer countries now have great difficulty in becoming industrialised successfully in the face of global competition, rapid technological change and global demand shifts towards services. These hurdles can only be overcome with a growing, competitive mid-tier sector. The political economy of favouring large companies, practised by state elites, constitutes an obstacle to economic growth. …..


full text DIE/GDI International Development Blog. Africa and its partners: building alliances for sustainable development http://blogs.die-gdi.de/2017/02/22/a-new-basis-for-the-cooperation-with-africa/#more-1164

Additional literature:

Robert Kappel, Birte Pfeiffer and Helmut Reisen (2017 forthcoming), Compact with Africa: Fostering Private Long-Term Capital for Africa, Bonn: DIE/GDI Discussion Paper.

Robert Kappel, Birte Pfeiffer and Helmut Reisen (2017), Compact with Africa. Fostering Private Long-term Investment. Blog graensengrenzen 9.2.2017. https://graensengrenzen.wordpress.com/2017/02/09/compact-with-africa-fostering-private-long-term-investment/

Helmut Reisen (2017). Pakt mit Afrika oder Deal für die Allianz. Blog Weltneuvermessung 3.2.2017. https://weltneuvermessung.wordpress.com/2017/02/03/pakt-mit-afrika-oder-deal-fuer-die-allianz/