Dear Chancellor Scholz

As Germany continues to solidify its position as a global leader committed to international development, we, the undersigned, are reaching out with a shared sense of optimism and opportunity that exists for both Africa and Germany in fostering a stronger partnership backed up with concrete action, especially in the areas of development finance and investments. The Compact with Africa (CwA) initiative is a clear demonstration of Germany’s leadership and its intent on how it wants to work with Africa.  

Africa, with its diverse resources, burgeoning potential for renewable energy, and rich pool of human capital, presents a remarkable opportunity for collaborative progress. However, the continent finds itself at a crucial juncture, grappling with the pressing issues of sustainable development, mounting debt crises, and the imperative transition towards a greener future. 

Regrettably, the current global financial architecture has fallen short of fully catering to Africa’s dynamic and evolving needs. Despite its immense potential, the continent faces significant challenges in accessing affordable financing and stalling progress across various sectors. By borrowing from the capital market, African countries are incurring a staggering 500% additional cost compared to accessing sufficient concessional capital from the World Bank. This distressing trend could potentially lead to $56 billion in additional repayment costs for new debt raised between 2017 and 2021. With 36 low-income countries (mostly in Africa) already teetering on the brink of debt distress, the looming spectre of an affordable capital crisis emphasizes the pressing need for swift and resolute action.

By recognising the urgency of the situation, Germany, working with governments in Africa,  has a chance to foster a more inclusive and effective system that benefits both parties and the global community. Under your leadership, Germany can be pivotal in driving such transformative efforts to bolster Africa’s growth and leverage the continent’s abundant opportunities for sustainable initiatives.

Specifically, we urge Germany to play a leading role in supporting Africa by:

1. Establishing its fair share of the $80 billion commitment announced by G7 Development Financial Institutions (DFIs) in 2021 to support sustainable economic growth in Africa and calling on other members of the G7 to do the same. The upcoming Compact with Africa Conference would be a perfect opportunity to lay out a roadmap to fulfilling this commitment.
2. Championing the reform of Multilateral Development Banks (MDBs), advocating for greater flexibility, resolving unfair debt systems, and facilitating more accessible finance, with the potential to yield over $1 trillion in funding.
3. Endorsing the push for heightened transparency in credit ratings and assisting African nations to enhance their ratings in line with fair assessments 
4. Increasing Germany’s contribution to IDA, the World Bank’s fund for the poorest countries, and leading a charge for other donor countries to do the same at a time when this fund is facing a funding cliff and needs ambitious replenishment.
5. Supporting the call for increased African representation in decision-making bodies, recognising the admission of the AU into the G20, and emphasising the need for further representation in other multilateral institutions to deliver better services that meet the continent’s needs and aspirations.
6. Partnering with and financially supporting African institutions so that thought leadership, analysis, and policy advice originates in and is driven by leading minds on the continent.

Africa seeks partners who will be sincere allies. Germany has already demonstrated its commitment as a partner for Africa. Continuing to advance Africa’s interests on the world stage will strengthen this partnership.  

Signed by:

1. ONE Campaign
2. African Center for Economic Transformation
3. Global Citizen
4. Save The Children
5. Friends of the Global Fund Europe