Two great continents working in tandem

Two great continents working in tandem

"Africa, the cradle of humanity, is about to become the cradle of business."

Commentary by Jyrki Katainen, Vice-President of the European Commission for Jobs, Growth, Investment and Competitiveness

Africa, the cradle of humanity, is about to become the cradle of business. Its population will more than double by 2050, and the world’s oldest region already has the world’s youngest people. Africa’s next billion people will be the thinkers, makers and doers of tomorrow.That is why I am delighted to see this report highlighting the dynamism of African entrepreneurs and the high growth of their small and medium-sized enterprises (SMEs). To help these small companies become big companies they need both human capital and financial capital.

Investment is a powerful tool. It is more than simply a transfer of money. When African companies engage with global capital, exciting things happen. First, it can be a catalyst of innovation and change, opening new paths to sustainable development, creating jobs and lifting people out of poverty.

It also brings scrutiny from shareholders and incentives to meet international standards for transparency, responsible business and good governance. This helps tackle corruption by rewarding those who play by the global rule book. Sustainable development also means sustainable business practices, including circular economy business models.

Finally, it brings greater visibility to Africa as a place to do business and strengthens links with key trading partners such as the European Union (EU), which remains Africa’s biggest business partner. Europe wants to invest in the future success of Africa.

That is why we developed the European External Investment Plan (EEIP), which will mobilise total investments, both public and private, of up to €44bn ($46.8bn) through a dedicated European Fund for Sustainable Development (EFSD). Alongside this, we will step up our technical support and advisory services, and work with partners in the region to improve the business environment.

The fifth Africa-EU Summit will take place later this year. Africa is our nearest neighbour and a good partner for many centuries, and that relationship is entering a new and exciting phase. The EU will continue to be the world’s largest donor and will deliver on its development pledges. But it will be private capital that will transform the future economic outlook for Africa, taking investment from billions to trillions, and help build a better future for African people.

Together we are investing in Africa’s future, because we know it’s going to be big.