Doing business in Africa securely with export credit guarantees
The Export Credit Guarantees of the Federal Republic of Germany offer export-oriented companies different forms of cover to reduce their exposure to bad debt losses caused by economic or political factors. At the same time, they facilitate exporters’ efforts to raise finance for export business. This particularly applies to business in emerging economies and developing countries.
In the recent past, the Federal Government has launched various initiatives and implemented a number of improvements in connection with its foreign trade and investment promotion scheme with the aim of expanding economic cooperation with Africa and strengthening trade relations. Thus, it is continuing on the path on which it embarked in 2014 with its export credit guarantees and has improved the scope for cover for transactions with selected countries in sub-Saharan Africa.
This page briefly and succinctly summarises the various solutions offered by the Federal Government as well as the scope available for using Hermes Cover to protect and finance business transactions.
Compact with Africa
At the G20 Africa Partnership Conference, the German Federal Government announced a number of measures aimed at helping to expand economic cooperation with Africa and to strengthen trade relations.
The Federal Chancellor attaches particular importance to this initiative, as a video clip on the conference shows (click on the button).
One key element is the improvement in the terms of export credit guarantees for the delivery of goods to and the provision of services in “Compact with Africa” nations.
“Accordingly, the uninsured percentage on Hermes Cover for transactions with public buyers has been lowered from 10 percent to 5 percent for African countries that successfully implement the Compact with Africa and, in doing so, reduce risks and improve the terms and conditions of business.”
The ten specific measures that were adopted by the Federal Government in November 2019 to strengthen economic cooperation between Africa and German companies are summarised here:
Video podcast, Angela Merkel (DE)
G20 decides Compact-with-Africa
Cover Policy for the individual "Compact with Africa Nations"
Who to contact for more information about African countries
Advice for your foreign customers
The Export Credit Guarantees of the Federal Republic of Germany are cover and financing instruments that offer not only German exporters and banks but also foreign importers a whole series of benefits. For this reason, the Federal Government has broadened its advisory services in selected countries and appointed financing experts for regions such as North and East Africa as well as the Middle East.
Finance backed by Export Credit Guarantees of the Federal Republic of Germany also offers advantages for importers in the form of better financing conditions, thus providing an interesting alternative to local loans or bond finance.
The financing experts are also available locally to German exporters and financing banks and provide them with advice and assistance.
Your contacts abroad
Further measures adopted by the Federal Government to assist you with your business in Africa
Africa Business Network
The Federal Ministry for Economic Affairs and Climate Action (BMWK) has established the Africa Business Network as part of the development investment fund.
Via the Africa Business Network, BMWK is integrating the established players in the field of German export promotion with the development cooperation programmes even more tightly. This gives German companies access to a whole range of advisory services and support for their business in Africa.
Companies can contact the Africa Business Network office directly to discuss their specific business plans. In addition, German companies are specifically alerted to business opportunities in Africa which have been previously identified, examined and prepared by the Africa Business Network. A permanent contact, the “Africa Partner”, is available at the Africa Business Network office to provide companies with optimum support with their export business. The Africa Partner offers preliminary advice and assists interested companies from the initial project idea right through to implementation. Companies that require in-depth advice are referred to other partners within the German foreign trade promotion and development cooperation system. The services provided encompass advice on project finance, business-case calculations, customs and legal questions as well as market exploration and match-making trips to Africa and assistance in building local business contacts.
Euler Hermes Aktiengesellschaft will also be pleased to advise you on the options you have for covering your export activities in African markets.
Africa Business Guide
Partners and companies that are interested in doing business in Africa will find in the Africa Business Guide an initial source of information as well as a platform for sharing. Developed by GTAI for the German Federal Ministry for Economic Affairs and Climate Action, the digital platform (available in German only) provides you with information which will help you to develop your business in Africa. It provides important information, a comprehensive calendar of events and details of contact persons for business in Africa.
The market entry programme (MEP) for SMEs initiated by the German Federal Ministry for Economic Affairs and Climate Action supports German exporters in their efforts to enter new markets.
The programme consists of various domestic and foreign event formats that are tailored to the interests of exporters in specific sectors and address different topics.
Marshall Plan with Africa
With the Marshall Plan with Africa, the German Federal Ministry for Economic Cooperation and Development has initiated a partnership between Africa and Europe that goes beyond individual development cooperation projects.
The Ministry’s aim is to strengthen African nations’ own development capabilities in light of the fact that a sustainably growing economy generates jobs and prosperity that will strengthen the entire continent on a long-term basis.