We see the Compat 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 acknowledges its special responsibility to join forces in tackling the challenges facing the 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, spurring higher investment levels - particularly from foreign investors - requires improved conditions for investment.
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”) that was warmly received by the G20 finance ministers and central bank governors at their recent meeting in Baden-Baden. This report proposes a catalogue of instruments and measures designed to improve macroeconomic, business and financing frameworks as a way to boost investment.
Investment compacts with interested African countries
To improve these frameworks in a tailor-made way, individualised investment compacts will be set up between interested African countries, international organisations and partner countries. The various partners will commit to specific steps outlined in a catalogue of measures. The G20 will provide political support for comprehensive, country-specific packages of measures and will give African countries a platform to showcase opportunities and conditions for investment.
So far, the initiative has sparked great interest among many African countries. Côte d’Ivoire, Morocco, Rwanda, Senegal and Tunisia expressed particularly strong interest in letters to Finance Minister Wolfgang Schäuble, and their governments were invited in turn to send delegations to the G20 meeting in Baden-Baden. There they submitted clear declarations of intent that will be used as a basis for setting up investment compacts in the coming months.
These five countries, the C-5, will constitute the first group of compact countries. The Compact with Africa is a long-term project and is open to all African countries that are interested in improving their frameworks for private investment on a durable, sustainable basis.
The next key steps - in particular, the inclusion of bilateral partners and private investors - will be prepared at the Meeting of G20 Finance Ministers and Central Bank Governors on Washington, D.C. on 20-21 April 2017 and on the sidelines of the World Economic Forum on Africa in Durban, South Africa, on 3-5 May May 2017. In addition, an international conference on the “20 Africa Partnership - Investing in a Common Future” will be held in Berlin on 12 - 13 June 2017. The conference will provide backing for the G20 Africa Partnership and the Compact with Africa and will present Africa in all its modernity and variety to policy-makers and private investors.
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
- 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]