Good cooperation: German businesses rate their involvement in Africa positively
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German companies are optimistic about their business in sub-Saharan Africa. Despite global uncertainties, the region is becoming an increasingly important growth market. This is the result of a special evaluation of the AHK World Business Outlook (WBO) Fall 2024.
Volker Treier
© DIHK / Werner Schuering
For the AHK WBO, the German Chambers of Commerce Abroad (AHKs) and the German Chamber of Commerce and Industry (DIHK) survey AHK member companies every six months. This Fall, 3,500 companies worldwide took part – including 433 from Africa. 34 percent of these companies with locations in sub-Saharan Africa rate their current local business situation as good, while 20 percent rate it as poor. This means that the assessment is slightly less optimistic than in spring, but remains stable compared to other regions of the world.
"The economic dynamism in sub-Saharan Africa offers German companies a wide range of opportunities," says Volker Treier, head of foreign trade at the DIHK. "Many markets in the region are developing rapidly and are attracting investment despite global uncertainties."
Sub-Saharan Africa is also largely stable in an international comparison. Almost 60 percent of German companies in sub-Saharan Africa expect business to improve over the next twelve months. The outlook is particularly positive in Nigeria (67 percent) and South Africa (55 percent).
The willingness to invest is also increasing: Around a third of companies (31 percent) plan to increase spending in the region – a significant increase compared to spring 2024 (27 percent). The willingness to invest capital is growing in Kenya (32 percent) and Nigeria (35 percent) in particular. Sub-Saharan Africa is thus defying the global trend of falling investment by German companies – here, the balance of rising and falling investment intentions is 16 points, above the global average of 12 points.
The African Continental Free Trade Area (AfCFTA) offers great opportunities: every second German company (52 percent) sees it as a way to strengthen its competitiveness. The promotion of intra-African trade creates new potential for cross-border business and long-term partnerships.
Volker Treier is convinced: "The agreement on the African Free Trade Area will play a decisive role in the coming years in linking intra-African markets more closely and opening up new trade opportunities." This will create "a promising basis for German companies to expand their activities locally in the long term".
An increasing number of companies active in Africa rate sustainability requirements positively: around half of companies (49 percent) see this as a competitive advantage – in Nigeria, the figure is as high as 63 percent. "The economic dynamism and sustainability endeavours make sub-Saharan Africa a market with growing potential for German companies," says Treier"s findings.
Despite the widespread optimism, challenges remain. Economic policy uncertainty (56 percent), exchange rate fluctuations (50 percent) and limited financing options (49 percent) are seen as the greatest risks. Concerns are particularly strong in Ghana, where three quarters of companies (75 percent) see the economic policy framework as an obstacle.
DIHK head of foreign trade Treier also recognises this: "Of course there is still a need for reform – be it in terms of bureaucracy, the stability of the economic policy framework or monetary policy. But developments in many countries in the region show that progress is possible."
From 2 to 4 December 2024, sub-Saharan Africa will be the focus of the German-African Business Summit (GABS) in Nairobi. The most important business summit between Germany and Africa brings together leading representatives from business, politics and society to discuss opportunities, challenges and concrete partnerships. Further information on the GABS can be found at https://gabs2024.com.
The complete special evaluation of the AHK WBO Fall 2024 can be downloaded here:
