Sustainable investments in Africa: creating synergies of profits, people and planet
Dr. Karin Wedig, Regional Chief Economist Africa, GIZ
Dr. Matthias Rompel, Head of Division Southern Africa, GIZ
Poverty rates are decreasing, but inequality is increasing in many African countries – aggravated also by the effects of climate change. The panel discusses different pathways to achieve synergies between investors’ interest, local people’s demands for decent jobs and the necessity for transforming economies in ecologically sustainable ways.
Poverty rates in Africa are going down, but inequality rates are among the highest in the world and especially in African countries with fast economic growth, inequality is increasing even further. Simultaneously, the effects of climate change are threatening to aggravate inequality, to endanger livelihoods, and reduce living standards for large parts of the population at an unprecedented speed. At the same time new development policy agendas have emerged which put the promotion of investments and job creation in African countries at its core. Against this background, the drive to increase investment in Africa requires an intensive focus on creating synergies between investors’ interest in profits, local people’s demands for decent jobs and the necessity for transforming economies in ecologically sustainable ways. This panel discusses different pathways to achieve such
synergies at the level of regional economic development initiatives, national investment strategies, sector specific development plans and individual investment projects. Drawing on current debates about the structural transformation of African economies, as well as relevant project examples from international cooperation, the panel seeks to illuminate and discuss in how far existing strategies for investment promotion, including approaches that form part of bi- and multilateral initiatives, address the key challenges for socially and ecologically sustainable investment on the continent. This includes a critical reflection of the current focus on FDI, which on the one hand helps to mobilize muchneeded private sector capital, but on the other hand poses significant challenges for locally owned economic development, because the creation of an investment environment that is conducive to foreign investors is likely to put domestic investors at a disadvantage. The panel aims at critically reflecting current strategies for economic transformation and illuminates potential solutions that adapt existing concepts and theories in a context-specific manner.