Prof. Dr. Horst Köhler after meeting with Chief Justice, Dr. Willy Mutunga (© German Embassy Nairobi)

A  good  future  for  mankind  depends  in  no  small part on the future of Africa, and the future of Africa depends in no small part on whether this continent will succeed to offer jobs and perspectives to its fast-growing youth population, and the future of jobs in this region will highly depend on a healthy, thriving and inclusive private sector.

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)

Saying that Africa’s success is in the hands of Africans does not mean that we shouldn’t take a look at the bigger picture. So my second point is that there is a responsibility of the global community to get it right in terms of a global enabling environment. 

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.