Do not reinvent the wheel

Issue 79 - January | February 2019

Judith Helfmann-Hundack heads the Department of Foreign Trade and Development Policy at the Afrika-Verein der Deutschen Wirtschaft and acts as an EZ-Scout for the German government. She recommends a stronger focus on classic value creation - and slaughterhouses in Ethiopia.

Judith Hellmann-Hundack, Africa Association of German Business
Judith Hellmann-Hundack, Africa Association of German Business
According to Efosa Ojomo, a true innovation revolution could bring Africa to prosperity from poverty in two decades. Is it that easy?

Helfmann-Hundack: I am increasingly surprised by the innovation hype. From the fact that write all apps, there is still no added value. Of this, no shoe is sewn, which can be sold by app afterwards. And then the hundredth app for health, pregnancy, nutritional advice. I think we just need solid industrialization, skilled craftsmen building good houses and roads, trained electricians laying reliable power lines. Desirable are better results in agriculture, higher crop yields. And if there are still 50 percent post-harvest losses, then I do not have to reinvent the wheel for that. I have to either make sure that my infrastructure is improved or that I have more storage and cooling capacity. Best both. I think some innovative ideas are fascinating, but we still need economic development that creates and secures jobs and incomes.

Which industries are the most promising for African development?

Helfmann-Hundack: If I had money, I would always invest in agriculture and then directly in the finishing. Tomatoes and directly tomato puree. The same goes for onions, potatoes and so on. Ethiopia exports live camels to the Arab world. They would like to export vacuum packed camel steaks instead. But that does not work because no one invests in a slaughterhouse. If I had the choice: slaughterhouse in Ethiopia. And right behind a Vakuumieranlage.

Instead of slaughterhouses, Ethiopia is building industrial parks, creating thousands of jobs in the leather and textile industries. But in 20 years, seamstresses or machines will take over the work?

Helfmann-Hundack: That sounds a bit cynical now, but as long as there are low-wage countries, the pressure to automate is not there. Robots are a huge investment, which recovers only slowly. It's a bit like the car industry: you could have a two-liter car long ago, but they still keep that in the drawer until at some point the pressure on oil prices and consumers is too high. Apart from that, Africa needs above all jobs for the steadily growing population; over-automation can not be in the interest of governments.

Germany announced the Marshall Plan with Africa and the Compact with Africa. In Vienna, a high-level EU-Africa forum was held. So is the African mindset changing so fast?

Helfmann-Hundack: Yes, there is a new dynamic. But beyond the planning, the implementation must now follow. Training and employment is one of the new special initiatives in Germany. The Afrika-Verein expects a lot from this, as companies should also be involved at an early stage. The same applies to the Compact with Africa: additional financing will advance the economy and thus also the countries and their population. Chancellor Merkel has promised one billion euros at the Investment Summit in Berlin at the end of October, and the implementation proposals so far are looking very promising.

Which screws should still be turned?

Helfmann-Hundack: It should be invested in project development, in the early stages, which are not always safe due to local legal or political conditions. If, in the end, the project is not realized through no fault of the entrepreneur, then these start-up costs should be partially replaced in the sense of risk sharing.

Vielen Dank für das Gespräch!

Photo: Afrika-Verein der Deutschen Wirtschaft

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