Marshall Plan with Africa must succeed

Gerd Müller, Germany’s federal minister for economic cooperation and development has proposed a Marshall Plan with Africa. He is to be commended for assessing the African scenario and the developmental challenges courageously and candidly.  

The unemployment rate for young people is currently 50 % in Africa. As young people lack jobs and prospect, many contemplate the risky journey across the Mediterranean in the hope of salvation in Europe. Twenty million additional jobs must be created in Africa every year. Tangible action is needed if we want to rise to this challenge.

Müller does not want to leave anyone behind, but he states in no uncertain terms that corrupt elites still wield to much influence in many countries. How can countries be supported if corruption keeps them stuck in misery?

In such cases, funding must not be disbursed to governments but provided directly to the people. If donor agencies focus on the matter, the can drive the generation of employment by supporting millions of small and mid-sized enterprises (SMEs).

So far, only few donor agencies are experienced in SME promotion. Nonetheless, we know what works. Access to credit and financial services must improve, and the strong results of microfinance indicate what must be done. Thanks to microfinance institutions, 190 million women and 10 million men around the world have been able to start businesses, and 95 % of them are repaying their debts.

In Africa, thousands of strong microfinance institutions are waiting for support. They require refinancing and want to extend their field-office networks. So far, microfinance has focused on start-ups. A forceful shift towards lending to existing SMEs is now needed. This approach, by the way, would be an important way to promote women, as Federal Chancellor Angela Merkel has noted for good reason.

However, there can be no secure jobs in Africa unless massive efforts are made to improve skills training. There have only been rather few vocational-training projects in past decades, and many of them failed in the swamp of governmental corruption and nepotism.

We must learn from failure. It is essential to involve private-sector businesses in vocational training, as is standard practice in Germany’s dual system of vocational training. The private sector and its organisations must sponsor vocational training. It is possible to convince managers of this cause because they have a keen interest in vocational-training projects teaching relevant skills. They are equally interested in getting competent and reliable long-term staff. Germans can help.  

These things must be taken into account. They will make a Marshall Plan with Africa succeed.  

Prof. Dr. Winfried Pinger, Cologne, former Christian-Democrat spokesperson for development affair.