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EU’s Marshall Plan with Africa

The Federal Ministry of Economic Co-operation of Germany recently put out a discussion paper titled Africa and Europe — A New Partnership for Development, Peace and a Better Future.

By Vince Musewe

This paper is inviting input of ideas into a new paradigm on the relationship between Europe and Africa and seeks to set a tone of what the key issues need to be and has termed them the cornerstones of a Marshall Plan with Africa.
The 34-page document is intended to set the framework within which solutions for the future of Africa, in partnership with Europe, will be sought and I want here to look at the key issues which have been tagged as critical for progress.

It is evident that both Germany and Europe are turning their attention to Africa with a view to redefining their relationship with Africa and possibly replacing the Cotonou Agreement of 2000 with a new, more informed and more effective partnership agreement. (The Cotonou Agreement is a treaty between Europe and the African Caribbean and Pacific Group (ACP countries) signed in June 2000 for a period of 20 years to 2020 in Benin. It was signed by 78 ACP countries (except Cuba) and the 15 member states of the European Union.

This is a more holistic approach which seeks to address the root causes of an avalanche of immigrants from Africa to Europe, but will also benefit Africans at home through the creation of sustainable development.

According to the paper, the Marshall Plan with Africa seeks to re-evaluate and enhance fair trade, investment, economic development, entrepreneurship and employment opportunities. Above all, it seeks to increase African ownership of the solutions and reduce the free aid paradigm which has clearly not worked. What will be key is to ensure inclusive democracy and economic growth which has a direct and positive impact on African lives in an inclusive manner.

To remind my patient readers the Marshall Plan (officially the European Recovery Programme, ERP) was an American initiative to aid Europe, in which the United States gave US$13 billion (approximately US$120 billion in current dollar value) in economic support to help rebuild European economies after the end of World War II. The plan was in operation for four years beginning in April 1948. The initiative is named after the then United States Secretary of State George Marshall.

The goals of the United States were to rebuild war-devastated regions, remove trade barriers, modernise industry, make Europe prosperous again, and prevent the spread of communism. The Marshall Plan required a lessening of interstate barriers, a dropping of many petty regulations constraining business, and encouraged an increase in productivity, labour union membership, as well as the adoption of modern business procedures.

The Marshall Plan with Africa has identified 10 key starting points which I have taken the liberty to quote here, but have also included my own words here and there as follows:

The need for a new pact which takes into account that Africa’s population is set to double by 2050 and will then be home to 20% of the world population, the majority of which will be youth and women. It will therefore be critical that young Africans have access to jobs, opportunity, food, and energy. Africa’s resources must therefore be protected and, for once, used to benefit Africans with the help of Europe with knowledge, technology, innovations and investment.

Second, it is now acknowledged that Africa needs African solutions to its problems. However, in my view this must cease to be popular political rhetoric! Africans must articulate their own problems because they understand them better and must come up with their own viable solutions.

Africans must also move away from a dependence on donor funding to that of partnership with Europe. This new partnership must not only involve economic developmental issues but must also cover trade, finance, agriculture, economics, environment, foreign affairs and security issues.

Third, is prioritising jobs or employment creation for young people. It is vital that young Africans see a future for themselves in Africa. Africa’s population will soon top two billion and the creation of 20 million new jobs is being suggested each year in both urban and rural settings. New opportunities need to be created in partnership with Europe and through legal migration and cross pollination of new ideas, innovations, technology transfers and knowledge.

Fourth, is the necessary investment in entrepreneurship. It must be first acknowledged that the private sector is key in creating new opportunities and jobs and this is not the role of governments. There is therefore, the urgency to create an attractive environment for private investment capital which can be increased by developing new financial instruments for attracting and safe guarding private capital including appropriate governance and taxation structures.

Fifth, is the issue of value creation and addition within Africa and not value exploitation by Europe. This will include economic diversification, establishment of new production and value chains, access to markets, support of agriculture and small to medium enterprises (SMEs), increased trade in arts and crafts. Europe must therefore dismantle trade barriers and create better access for African products to its markets.

Sixth, is the international community demanding and supporting the development of the right political environment.

Sustainable economic development and accountability can only happen where there is the rule of law, inclusive growth, gender parity and non-corrupt administrative structures.

Seventh, is the necessity of support by Europe of both political and economic reforms which Africans have committed to themselves to, for example, Agenda 2063.

Eighth, is the establishment of equitable global structures with closer co-operation at institutional level. This includes, for example, fair trade agreements, combating illicit fund flows, limiting arms sales. This must also include a permanent seat for Africa at the UN Security Council and an increased role for Africans at international organisations such as the World Trade Organisation.

Ninth, is the acknowledgement that Official Development Assistance cannot and has failed to provide all the answers.

The thrust should rather facilitate more private investment capital going into Africa in partnership with local investments. Financial reforms and macro-economic stability become key.

Lastly, the Marshall Plan with Africa must be inclusive and should leave none behind. It focusses on people’s basic needs such as food security, water, energy, infrastructure development, digitalisation, health care and access to education especially for women and girls. Rural agriculture development is key and so are the opportunities and challenges posed by with rapid urban development.

Over and above this, Europe is now proposing co-operation based on common values and principles. I think this is the correct approach, The West must stop masterminding Africa because they neither have all the solutions nor the monopoly of wisdom.

Africa is a rich continent with all the resources required to adequately develop itself and feed all its people. Europe believes that this can be achieved within ten years.

Other issues dealt with in the paper which I cannot fully cover here include acknowledgement of the opportunities within Africa, the need to build relevant structures and institutions to create sustainability, the essence of the Marshall Plan with Africa, new financial structures, and many other relevant and pertinent issues such as peace, protection of Africa’s resources and so on.

It seems to me much thought has gone into the suggested new approach of a partnership between Europe and Africa which appreciates what each party can bring to the table to find solutions and the fact that ultimately the success of Africa’s development also benefits Europe.

Musewe is an economist. — vtmuswe@gmail.com. These New Perspectives articles are co-ordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society. E-mail: kadenge.zes@gmail.com, cell +263 772 382 852

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