Durban: German Vice-Chancellor Lars Klingbeil has announced that Germany will provide an initial contribution of pound 10 million towards the Group of Twenty (G20) Compact for Africa initiative, which promotes private investment in Africa. “This is not only a strategic investment; it is one that can boost growth, create business opportunities, and reduce pressure on public budgets in important Member States,” Klingbeil stated during the G20 Finance Track Meeting.
According to South African Government News Agency, the Compact for Africa was established under the German G20 Presidency in 2017, with the primary aim of increasing the attractiveness of private investment through substantial improvements in macroeconomic, business, and financing frameworks. The initiative is governed through the G20 Africa Advisory Group, co-chaired by Germany and South Africa, and coordinated by the African Development Bank Group, the International Monetary Fund (IMF), and the World Bank Group.
Klingbeil expressed Germany’s commitment to providing the pound 10 million to the World Bank’s Trust Fund this year. He urged other G20 members to consider making contributions to ensure the Compact’s long-term success. He emphasized the importance of joint efforts in unlocking the Compact’s potential for the benefit of African partners and the global community.
Klingbeil also highlighted that Compact members have seen higher levels of foreign direct investments, despite challenges such as the COVID-19 pandemic and global uncertainties, which underscore the need for continued political and financial support for sustainable and inclusive growth across Africa.
The German Vice-Chancellor reiterated the new German government’s intention to deepen engagement with South African partners and support the Compact. He announced plans for a new North-South Commission to facilitate regular meetings among experts from politics, civil society, business, and research to explore new and efficient solutions for development partnerships.
Klingbeil stressed the importance of equitable partnerships between the Global North and South, advocating for mutual respect and collaboration on equal footing to address global challenges. He praised the G20 Compact with Africa as a dynamic, results-driven initiative that showcases the power of partnerships and peer-to-peer learning.
South African Finance Minister Enoch Godongwana noted the Compact’s success in mobilizing over $191 million in private capital and improving access to services for over 13.5 million people. He emphasized the importance of maintaining country ownership, reform-driven initiatives, and result-oriented approaches for the Compact’s continued success.
Godongwana called on governments, multilateral institutions, and the private sector to create enabling conditions for sustainable development and inclusive growth, as Africa’s development trajectory faces challenges such as infrastructure deficits and climate vulnerability. He highlighted the Compact with Africa as a promising platform for fostering investment partnerships between African countries and the private sector.
South Africa assumed the G20 Presidency on 1 December 2024, under the theme: “Solidarity, Equality, and Sustainability.”