German Companies Plan to Increase Investments in Africa Amid Soaring Energy Prices in Europe
German Chancellor Olaf Scholz, center, waits for the opening of the EU Africa summit at the European Council building in Brussels, Thursday, Feb. 17, 2022.
Muhammad OsmanAccording to a poll conducted by the German-African Business Association, the main investment areas for German corporations are expected to be hydrogen and liquefied natural gas, as Europe’s biggest economy has been seeking to reduce its reliance on Russian energy sources since Moscow launched a military operation in Ukraine.At least 43% of German companies active in Africa are projected to increase their investments in the continent during 2023, a poll conducted by the German-African Business Association showed.The survey, conducted among members of the association, which represents around 85% of German businesses active in Africa, also found that 39% of businesses are willing to keep their spending levels in Africa stable during 2023.
“The majority of companies want to expand their activities in the coming year,” head of the association Christoph Kannegiesser said. “It makes sense, because the continent is still on a growth trajectory.”
German Economy Minister Robert Habeck revealed at the two-day German-African Business Summit that took place in Johannesburg, South Africa in December that German companies invested around 1.68 billion euros ($1.6 billion) in Africa in 2021, including 1.1 billion euros in the Sub-Sahara region.The poll suggested German companies would seek to boost their activities in the fields of hydrogen and liquefied natural gas, given the fact that Germany, as well as other European Union members, has been looking for new energy exporters in order to reduce their reliance on Russian energy since Moscow launched a special military operation in Ukraine.
“The field of green hydrogen and liquefied gas will give a new impetus in many countries,” Kannegiesser said, highlighting Senegal, Nigeria, Namibia, and Mauritania as potential destinations for German investments.
Opinion & AnalysisEnough is Enough: Why West’s Price-Capping is Wake-Up Call for Developing Countries22 December, 11:45 GMTThe interest of European investors in Africa takes place amid soaring energy prices in European Union countries that, according to the European Council, reached record levels in 2022.According to Eurostat, electricity and gas prices in the European Union increased sharply in the first half of 2022 compared with the same period in 2021. Electricity prices rose from €22 per 100 kWh to €25.3 per 100 kWh, while gas prices reached €8.6 per 100 kWh, up from €6.4 per 100 kWh in 2021.The rapid increase takes place as in February 2022, Germany and other EU countries imposed sanctions against Russia in the wake of its military operation in Ukraine.Following the imposition of several sanctions packages against Russia’s energy sector and terrorist attacks on Russian energy infrastructure, among other things, global gas prices accelerated their rise.While the EU has decreased its consumption of Russian natural gas, it is trying to replace the lost amount with liquefied natural gas from other producers, including the US, the Middle East, and Africa.
