We see the Compact with Africa as a long-term, demand driven process. The African countries will determine what they want to do to improve conditions for private investment, with whom they want to cooperate, and in what form.
Dr Wolfgang Schäuble, Federal Minister of Finance
Resolution on the Compact with Africa adopted by G20 finance ministers and central bank governors in Baden-Baden
The G20 countries are aware that they have a special responsibility to work together to tackle the challenges facing the world’s poorest countries, especially in Africa. The Compact with Africa initiative aims to boost private investment and investment in infrastructure in Africa. Such investment is an essential precondition for strong, balanced and sustainable growth. However, achieving higher investment requires improved investment conditions.
To this end, the World Bank, the International Monetary Fund and the African Development Bank have produced a joint report (“The G20 Compact with Africa: A Joint AfDB, IMF, and WBG Report”), which proposes a range of instruments and measures designed to improve macroeconomic, business and financing frameworks as a way to boost investment. The report was warmly received by the G20 finance ministers and central bank governors at their meeting in Baden-Baden in March.
A comprehensive G20 Africa Partnership initiative was adopted at the G20 summit of heads of state and government in Hamburg in July 2017. The Compact with Africa is the central pillar of this partnership. An Annex to the Leaders’ Declaration outlines the aims of the Compact with Africa, the roles of the various stakeholders (participating countries, international organisations and bilateral partner countries), and the process. It was agreed that the initiative will be coordinated and monitored in the G20 Finance Track. The finance ministers and central bank governors will receive regular updates on the progress made and the targets attained.
Investment compacts with interested African countries
The idea behind the Compact with Africa initiative is to improve conditions for private investment. Interested African countries enter into investment partnerships with the World Bank, the African Development Bank, the IMF, and partner countries and institutions, in which they agree on specific measures to improve investment conditions. The G20 supports the initiative by offering the African countries a political platform to showcase investment opportunities and highlight the attractiveness of their countries for foreign investment.
The initiative has sparked great interest among African countries. In the first half of 2017, Ethiopia, Côte d’Ivoire, Ghana, Morocco, Rwanda, Senegal and Tunisia announced that they were setting up compacts. They produced ‘country prospectuses’ for the meeting of G20 finance ministers and central bank governors and for the G20 conference “G20-Africa Partnership. Investing in a Common Future”. In these prospectuses, they outlined the priorities they would like to pursue in their compacts. They are currently working on defining specific measures for achieving their goals. The finance ministers of the participating African countries will have an opportunity to present the progress made at the meeting of finance ministers and central bank governors in Washington.
Germany has concluded investment partnerships with Côte d’Ivoire, Ghana and Tunisia.
The G20’s Compact with Africa initiative is a long-term project which is open to all African countries that are interested in improving their frameworks for private investment on a durable, sustainable basis. A number of other interested countries are currently holding exploratory talks with the participating international organisations (the African Development Bank, the International Monetary Fund, and the World Bank).
G20 Africa-Conference in Berlin
On 12-13 June 2017 the international conference “G20 Africa Partnership - Investing in a Common Future” hosted by the German Federal Ministry of Finance, the Federal Ministry for Economic Cooperation and Development and the Deutsche Bundesbank took place in Berlin.
The conference provided a platform for government representatives as well as experts and private sector stakeholders to initiate the G20 Africa Partnership and to strengthen this dialogue by exchanging views on joint opportunities and measures to overcome challenges. Central to the discussions of the conference were the three pillars of the G20 Africa Partnership: (1) to improve inclusive economic growth and employment; (2) to develop quality infrastructure especially in the energy sector; and (3) to strengthen the framework for private finance and investment in Africa (Compact with Africa). The G20 Africa Partnership builds on existing regional and international strategies in order to ensure alignment, coherence and ownership; it is based on the assumption that peace and stability are prerequisites for sustainable growth and development. Participants in the conference expressed strong support for the G20 Africa Partnership and committed to actively support it.
The conference also provided a platform for the African countries that are participating in the G20 “Compact with Africa” initiative to emphasise their political commitment and priorities. The finance ministers of Côte d'Ivoire, Ethiopia, Ghana, Morocco, Rwanda, Senegal and Tunisia, announced ambitious reform measures aimed at improving the framework conditions for private investment. The heads of the African Development Bank, the International Monetary Fund, and the World Bank as well as many G20 members and non-G20 partners indicated their support for the initiative and the implementation of individual investment compacts. The participating international organisations committed to work closely together to ensure effective coordination of the input from all Compact partners.
During the high-level investor round table discussions as well as during the follow-up bilateral discussions with investors, the finance ministers of the Compact with Africa countries presented the first outlines of their compacts to private investors and also pointed to specific sectors and projects where private-sector participation is most needed in their countries. They used the opportunity to ask the invited private sector representatives for their feedback on the compact outlines (prospectuses).
Investors welcomed the Compact with Africa initiative and appreciated the opportunity to start a dialogue with the Compact countries. They highlighted the importance of good governance and mutual trust, good public infrastructure, access to decision-makers, transparency of decision-making, skills and training, well-functioning domestic capital markets, transparent and reliable regulation and taxation as well as minimal red tape, which are all crucial for private investors. Several business representatives indicated their interest in investing in specific countries and sectors.
Others highlighted their presence in the Compact countries and the extent of their operations. The representatives from the development finance institutions also highlighted their commitment to the initiative and specified potential contributions, ranging from technical assistance to developing innovative products that will help to crowd-in private capital.
G20 Finance Track Documents
Compact with Africa – Country prospectuses
The Federal Finance Ministry is not responsible for the content and information provided by the individual country prospects.
- G20 Compact with Africa - Ghana [PDF, 1MB]
- G20 Compact with Africa - Tunisia [PDF, 1MB]
- G20 Compact with Africa - Senegal [PDF, 2MB]
- G20 Compact with Africa - Rwanda [PDF, 2MB]
- G20 Compact with Africa - Côte d’Ivoire [PDF, 2MB]
- G20 Compact with Africa - Morocco [PDF, 8MB]
- G20 Compact with Africa - Ethiopia [PDF, 535KB]
Information about the participating countries [PDF, 603KB]