Prof. Dr. Horst Köhler after meeting with Chief Justice, Dr. Willy Mutunga (© German Embassy Nairobi) |
Let me point out three things that I believe are necessary so that the currently much-used slogan of “Africa rising” will not remain wishful thinking. I’d like to talk about responsibility and success, as success is not so much the product of luck but the result of effort and taking responsibility.
My first point: I find it encouraging that more and more African leaders in politics and business are pointing out that it is their own responsibility to create a climate in which the private sector can thrive. Africa’s transformation can only come from within. The rule of law, functioning institutions, macroeconomic stability or a tax system that is fair and efficient are all ingredients without which long-term and inclusive growth will remain elusive. Nobody knows better than businesspeople how important trust is, and it is the responsibility of each African nation to build trust in and respect for its institutions, otherwise, it will be hard to attract the right kind of sustained investments.
The right kind of investments, of course, is the kind of investments that bring forward a country as a whole. Investments that create jobs, investments that move Africa up on the ladder of value-addition, investments that bring infrastructure, education, health care, and, finally, prosperity for all in the nation. It is the responsibility of African politics to create the necessary and sufficient conditions for these private and public investments.
Prof. Dr. Horst Köhler launches 1st East African-German Business Colloquium, Nairobi, 4 June 2014 (© German Embassy Nairobi) |
I am sure that you all are tired of hearing the old dictum that what Africa needs is trade, not aid, but let me repeat this: the international trading system is still far from being development-friendly and the job of creating a truly inclusive trade regime is not done yet. Industrialized nations are holding tight to their vested interests, although they should realize that in the long-term, they only have to gain if they enable Africa to economically stand strong on its own feet, and we all have much to lose if it will not.
So for those negotiating a Transatlantic Trade and Investment Treaty between the US and the EU, let me say this: good idea, but not if it is to the detriment of trade and investment in Africa! On the part of Africa, I strongly endorse the efforts for a pan-African free trade zone and the push for more regional integration. I very much hope that Europe finds a way to adequately reflect these African priorities in its own stance on European-African trade relations.
Another crucial issue that needs to be resolved globally certainly is global warming, the single biggest threat to the survival of the human race. Of course, the irony of history is that the continent which is least responsible for the looming catastrophe is also the one that will suffer (and already suffers) the most from it. The international community needs to find an effective climate regime that is cutting CO2 emissions, and industrialized countries absolutely have a responsibility of leading by example.
When it comes to the responsibility of both global leaders and African politics there certainly is also the issue of illicit capital flows which is robbing Africa of around 50 billion USD every year. This needs to be stopped, and the building blocks for that are the fight against corruption, clear national tax codes as well as a global fight to tackle tax havens.
In all these debates on a global enabling environment, I hope that Africa will be a constructive voice for transformation that does not fall back into the routine trenches of country blocs dating back to the Cold War era.
Thirdly: business needs freedom, but freedom also entails responsibility. A business cannot succeed in a society that fails. Our track record in Germany shows that especially small and medium-sized enterprises have a business culture that takes an inclusive and long-term perspective. They know that only a well-trained and motivated work force will be able to deliver sustained profits, and that business is healthier if it is rooted in healthy local communities. This, in turn, allows the middle class to grow, which is a stabilizing anchor for society as a whole. We have seen in the current crisis in Europa that socially responsible and locally rooted business is a strength, not a weakness.
In the first meeting between African and German entrepreneurs that I chaired (two years ago in Cadenabbia, Italy) it became clear that skills are a main bottleneck for sustainable and job-creating growth in Africa. This is why I continuously underline the importance for German government and business to share with their African counterparts our positive experience with technical and vocational education and training.
Responsible business also means taking part in the political process. Buying the political system (and believe me, this is not a danger that is unique to only Africa) will only further corrupt it, and while a corrupt political system may be used for the benefit of some, no society will be able to flourish within such a system. At the meeting in Cadenabbia, one of the African entrepreneurs expressed his concern that party financing in the emerging African democracies is still a problem and he asked for advice on transparent party financing laws. For me, it was encouraging that such a point was made from within the African business community.
I am glad that more and more Germans are discovering the vast business opportunities that Africa, and especially East Africa, is offering them. And as I got to know many African entrepreneurs, I am sure that their German peers can learn a lot from them, learn how to get access to one of the most vibrant future markets.
By Horst Köhler
Former Federal President at the East African-German Business Dialogue, Nairobi, Kenya, June 2014.