The decision makes Germany one of the IMF’s largest CD partners in the region, bringing its total contribution to IMF CD in Africa to €30m over the next three years, the IMF said.
IMF managing director Christine Lagarde said: “Under Germany’s leadership, job creation and poverty reduction in Africa have become strong priorities for the G20.”
Lagarde said the support of Germany, through the Federal Ministry for Economic Cooperation and Development, would help the IMF “continue working with Africa’s policymakers as they build resilient macroeconomic institutions that support investment and sustainable, inclusive growth”.
Greg Jones of Pinsent Masons, the law firm behind Out-law.com, said: “This further contribution from Germany to the IMF’s CD efforts in Africa gives a new opportunity to build and strengthen the capabilities of African policymakers, build effective and resilient institutions and promote participatory and sustainable growth across the continent.”
Germany’s contribution follows pledges the country made as part of its ‘Compact with Africa’ initiative, launched under Germany’s presidency of the G20 last December, which aims to boost private investment and increase infrastructure development in Africa.
Germany’s federal finance minister Wolfgang Schaeuble said earlier this year: “Capacity development is important to improve conditions for private investment in Africa. This is why we support the IMF's very valuable efforts both financially and conceptually.”
The IMF said it maintains a network of six regional CD centres in sub-Saharan Africa that “anchor IMF support for economic institution building”.
The centres are jointly financed by the IMF, external development partners and IMF member countries. Current partners include the European Union, which has contributed about $200 million since 2009, the UK, Switzerland, Canada, the Netherlands, France, Australia, the African Development Bank, Germany, China, the European Investment Bank, Kuwait, Luxembourg, Italy, South Korea, Brazil, and Russia.
In 2015, the chairman of the sub-Saharan Africa Initiative of German Business, Heinz-Walter Grosse, told the first ‘German-African Business Summit, supported by Deutsche Bank, that it was "time to focus more clearly on Africa as a highly promising economic partner and future market”.
Grosse said: "The interest of the German business community in Africa is growing. Over the last 10 years exports have risen by 64% to around €23bn. Even more impressively, German direct investment in the continent rose by almost 25% in the years 2009 to 2012.”