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African countries are becoming increasingly important economic partners for German companies. This is shown by our "Africa Report", for which we surveyed companies with business activities on the continent in cooperation with the German-African Business Association. According to the report, more than half of the companies surveyed (59 per cent) want to expand their business in light of geopolitical developments and 20 per cent are considering the continent as an investment location for the first time. Irrespective of this, two thirds (66 per cent) of companies intend to expand their investment activities in Africa over the next five years.

Despite investments - Germany lags behind in international comparison

Germany has more than doubled its investments over the past 20 years. But in an international comparison, Germany still has some catching up to do when it comes to investment in Africa. France has increased its capital stock six-fold in the same period, while China has even increased it by a factor of 90. German companies are feeling the effects of this past reluctance to invest today: 22 per cent are observing growing market shares for the German economy. At the same time, however, more than a third (38 per cent) see themselves exposed to dominant international competition, particularly from France, China and Turkey. 

South Africa, Kenya and Nigeria are the most important markets for German companies, followed by Ghana and Egypt. This essentially reflects the largest sales markets in Africa. Although Ghana is rather small, it is very popular with German companies due to its political stability and relatively resilient economy.

Market size and growth as the most important location factors

The report shows that German companies are already very successful in doing business on the continent and that the vast majority of local companies are optimistic about Africa. The outlook is also viewed positively. More than half of those surveyed expect their turnover to increase either slightly (39 per cent) or significantly (17 per cent) in the 2023 financial year. Over the next five years, more than three quarters of respondents even expect turnover to increase. The companies cite market size and growth (69 per cent) and the availability of labour (27 per cent) as key locational advantages. When comparing Africa with China, the rapidly growing population (51 per cent) and the untapped markets (52 per cent) are seen as key advantages. According to forecasts, every second megacity in the world could be located on the African continent by the end of the century.

The report also sheds light on the developments and opportunities in Africa's most promising sectors, namely the energy, automotive, healthcare, chemical and consumer goods industries as well as wholesale and retail - all sectors in which the German economy is well positioned and internationally active and successful.