UNICEF Ethiopia
World News /05 Sep 2019
09.05.19

A New Economic Race For Africa

The original Marshall plan was developed by the United States and put into effect following the Second World War, when much of Europe lay in ruins. The heavy bombardment of strategically vital cities and other economic locations left many industries having to start from scratch. The plan was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent.

Named after its creator, George C. Marshall, it aimed to revive the commercial/industrial relationships between European neighbours so as to reach pre-war levels. Additionally, it hoped to bring the spread of communism to an end. Considerable amounts of the fund were distributed to major industrial powers such as Britain, France, and West Germany. The thought behind this being that for overall European recovery, these and other larger nations were critical for progress.

Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) has started a Marshall Fund to aid economic development and slow migration pressure on the African continent. Germany’s “Marshall Plan with Africa” started in 2017. Germany is looking towards Africa in order to maintain a stable relationship with the continent, as well as to further investment.

Germany’s Marshall Plan is not necessarily a recovery program as such, as many countries on the African continent are not in ruins per se. However, over the years Germany and the European Union have come to realize that Africa bears huge economic potential. As of 2019, the budget provided by the BMZ stands at $11 billion. In March 2019, BMZ announced that they want to maintain this figure until 2020.

According to German Development Minister Gerd Mueller: “[Germany] need[s] a paradigm shift; we have to realize that Africa is not the continent of cheap commodities but that the people of Africa need infrastructure and a future.”

By establishing the “Marshall Plan with Africa” initiative, this could potentially lead to increased official development assistance (ODA) to some African countries. In turn, this shows an openness by many African nations and Germany alike to implementing good governance reforms. As displacement and migration are likely to remain key focus areas of Germany’s development cooperation, the specific geographical regions of note are set in the Middle East, North Africa, and sub-Saharan Africa. Agriculture and nutrition security, as well as climate change, are likely to remain further key priorities as well.

German engagement is bundled into five specific points: peace support Friedensfoerderung; development Entwicklung; migration Migration; collaboration with African partners Zusammenarbeit mit afrikanischen Partnern; and, cooperation with civil society groups Mehr Kooperation mit der Zivilgesellschaft.

The main challenge within Africa is that there are over fifty nations that should ideally work together to achieve a common goal. Given the current state of affairs though, this is highly unlikely. Although all UN-recognized states are members of the African Union, it does not mean that all of them are willing to cooperate with each other.

Foreign military and political intervention further complicates the matter. With the UN-military peacekeeping intervention based in Congo and Mali for example, a military strategy was established to reinstate order, support diplomacy, and prevent further crisis. Germany, as a member of the UN, has sent thousands of peacekeeping troops abroad. Military intervention in Mali is taking place unbeknownst to much of the population. Massive protests following a massacre in the village of Ogossagou resulted in Westerners being viewed as occupiers. A sense of colonialism is coming back and with it the exploitation of resource-rich countries and regions. Foreign investors seem to want to secure their share in this financial potential.

So how does German military intervention tie in with the funding plan? On the surface it seems that it does not. The main reason being is that there are two entirely separate entities at work. On the one hand there is the German parliament making decisions to protect an EU mandate – with the background of stabilization and counter-terrorism intervention. On the other hand there is the private sector that wants to make investments work securely and also wants to see development thrive. However, the two entities have a common goal and that is to have stable economic growth. Both establishments are in desperate need of each other in order for those common goals to be achieved.

International aid experts are wary of Germany’s dedicated decision to fund the project just in Africa because of a reluctance of private investors to take an impromptu risk – but also because of the mere costs that would be involved. Africa has been in economic development for many decades. It has been estimated that Africa as a whole will need $93 billion per annum to take care of infrastructural problems alone and another $600 billion to implement the UN Sustainability Development Goals. Therefore, Germany’s initial fund in comparison to these figures seems like a drop in the bucket. And the bucket is growing.

Germany is making use of all available means to secure a relatively stable relationship within certain African countries. The investors are there, the investments are in the process of being made, and it may seem to be a guaranteed success. However, it remains a work in progress and as of 2019, the effect and impact beyond the initial planning and implementing phase will have to be carefully monitored. In the economic race for Africa only time will tell who will come in first.

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