Stronger ties will balance Nigeria, Germany trade relations, says Stefan Liebing
The German–African Business Association (Afrika-Verein der deutschen Wirtschaft), is the foreign trade association representing German companies and institutions with interest in Africa. With over 80 years in the service of German–African economic relations and well-established networks, the association has succeeded in promoting exchange between German and African representatives for both business and politics.
The Association is equally advocating a new conception of Africa as a continent of opportunities in Germany.
In this interview, head of the association, Dr. Stefan Liebing, who is in the company of the German Chancellor, Angela Merkel, on her visit to Nigeria, tells Niyi Bello (Abuja Bureau Chief), and Bridget Chiedu Onochie, some of the factors affecting relationship between Nigeria and Germany, and what should be done to balance trade relations between both countries. Excerpts:
What do you think is responsible for the lopsided export relationship between Nigeria and Germany in favour of the latter?
We have mainly three reasons for this development.
First, there are very high quality and documentation standards on the level of the European Union when it comes to imports of agricultural products.
African producers cannot meet these standards so far in many cases.
Secondly, low oil and other raw material price levels have also contributed to the problem.
And there is one more reason that I think may be the most important one, German SME buyers of goods and products do not have Nigeria on their radar screen as an attractive market for sourcing their needs.
What can then be done to change the situation?
It is our obligation to work on all the three drivers that I have just mentioned.
Obviously, we do not want to lower standards, and this is regulated on the European level in most cases anyway.
So, the first step will be to help Nigerian producers to meet these standards so that they can supply to Germany in future.
This is a joint task for both German buyers because it is in their interest to enter into long-term partnerships, but also, for development institutions.
I believe it would be good to discuss the matter between the two governments so that we can see how to best work together to the benefit of the business people on both sides.
For my Association and its members, it is also a top priority to promote business cooperation between the two nations.
And by doing so, by informing German business people, the media and the public, we can raise Nigeria on the radar of potential buyers.
How has the Nigerian-German trade relations been in the last three years?
I believe we are on a good path here. German business has been hesitant towards African activities in recent years.
This is partly because of the difficult economic situations some African countries have gone through.
Currency and foreign exchange issues, low oil prices as well as government income have not made it easy to develop new business on the continent.
However, German government has understood that there is a need to support those German companies that want to invest and create jobs in African countries.
Some serious actions have already taken place that have led to a significant increase of German investment and trade activities in the past few months.
Germany has taken the number one position of African trade partners in Europe from France presently.
We expect more than $1billion of investment decisions of German enterprises in Africa only for this year, which would be an increase of 10 per cent of total investment in Africa from Germany in just 12 months.
And the amount of export credit guarantees issued by the German Government has doubled in the first half of 2018 compared to last year.
So, these are all good indicators that the stagnation during the past three years that we all have witnessed is over now.
What is the current trade volume between the two countries?
After two rather weak years, German exports rose for the first time in 2017, rising by 21.8 per cent to €935million. In 2016, it was €768million.
In the first five months of this year, German exports fell by 18.2 per cent to €319million, and imports also fell by 14.9 per cent to €274million.
The monthly figures fluctuate considerably. January was relatively weak with €46million of German exports, while April reached €72million, and May reached €70millions, which were at the previous year’s level.
In view of the further recovery of the Nigerian economy, trade volumes between Germany and Nigeria are expected to increase in the next few years.
Germany has comparative advantage in renewable energy; how can Nigeria benefit from this in terms of manpower development, equipment supply, and others?
Indeed, Germany has, may be the strongest position in renewable energy worldwide.
Our own energy system has undergone a transition towards renewables in a speed and depth that is unique around the world. We now generate around one third of our electricity from renewables.
I believe we can bring this to Nigeria, and we are ready to do so.
It will not start with training or with equipment supply. I believe German project developers should come and invest.
Investors will then of course also design, build, operate their plants, bring German equipment and they will need trained staff.
So, training academies will follow. In order to push German investment in renewable energy, we need two tasks to be accomplished.
I believe the regulatory system for foreign investors in renewables in Nigeria at the moment is not stable enough to attract much needed foreign money and know-how.
And the German Government will need to provide new means to issue guarantees for risk-averse investors, risk capital for the development phase and other tools that investors from different countries enjoy today.
On the latter, we are working heavily and I invite the government of Nigeria to work with my member companies so that we can remove some of the obstacles that the regulatory system in Nigeria currently entails.
Germany also has advantageÍ in manufacturing of agricultural equipment. In what ways can Nigeria benefit from this?
Indeed, German companies offer high quality and innovative machinery; seeds, or chemicals that can help improve agriculture and develop a state-of-the-art industry.
German companies even offer latest IT technology such as highly reliable satellite-based weather forecasting systems, trading platforms for the products or automated GPS-based machines and tractors.
We have just set up a German-African Agribusiness Alliance that has given itself the task to develop more and new businesses in that sector.
The German Chancellor is on a visit to Nigeria, what shall we expect from this visit?
I believe the visit is of critical importance and it comes at the right time.
It will draw significant attention to Nigeria in Germany, just by the fact that the media will inform the public about the trip.
And more importantly, it has given impetus to a number of projects for which investors are going to sign agreements while Chancellor Merkel will be in Abuja.
It is not by coincidence that she is joined by a group of high-ranking business leaders.
Finally, I expect that Chancellor Merkel and President Buhari will have good talks and hopefully agree on new mechanisms to support and guarantee joint ventures between entrepreneurs of the two nations and create new dynamics exactly at a time when Germany is strongly looking to Africa.
Germany has so far been insulated from high rate terrorism, could assistance be provided for Nigeria that is facing armed banditry in some states in this regard?
Thank God we have been lucky and had good protection by security institutions in Germany.
I believe it would be a good move to cooperate in fighting terrorism, but that is for political leaders to decide and agree.
I am just speaking on behalf of German business and in that capacity, I can say that German technology companies will be happy to help within the framework set by the law and political decisions to help by improving security and providing technology, for example, to support border protection, identification etc.
Many Nigerian scholars are increasingly making German institutions their first choice destination, how can relationship be proved in this regard?
We are very proud to see more Nigerians coming to Germany so that they can help in developing scientific success and educational systems in Germany and beyond.
But I think it is important to make sure this is not a one-way road.
We need to make sure we make the maximum out of their Africa experience by setting up programmes of scientific and educational cooperation.
I believe more university partnerships between our countries could be important first steps.
Vocational training will be offered by German investors as more of them come to Nigeria now.
In Kenya, we are currently setting up an East-African-German University of Applied Sciences.
If the basis of German employers in Nigeria gets strong enough, I believe we could
also propose something similar with Nigeria.
And for suchinstitutions, Nigerian scholars with work experience in Germany will be invaluable assets.
Germany and Nigeria have a long relationship in cultural promotions and renaissance especially through promotions of arts. What is being done to strengthen this relationship?
Germany takes Nigeria seriously as a partner in this context.
Proof of that is the first trip to Africa by our new State Minister at the Foreign Office, Mrs. Michelle Müntefering to Nigeria in May 2018.
After the visit, she emphasized that Nigeria is a partner not only on the economic level, but that the cooperation on a cultural level plays a big part in growing a stronger partnership between our countries.
Cultural exchange at all levels, even the creative industry itself, can serve as mechanisms to educate Germany about the diversity in Nigeria.
You can see the importance of that aspect in different programmes that have existed between Germany and Nigeria for decades.
The Goethe-Institut in Lagos was opened in 1962, but we also have an exchange programme for journalists, and additionally the German Embassy/Consulate regularly hosts workshops for German and Nigerian artists.
In 2016, a project started in which Nigerian films from the 1970s in Germany are to be restored and digitised.
In 2017, the Nigerian Film Corporation (NFC) received a film scanner from the State Department’s Cultural Preservation Programme for the sustainable restoration and digitisation of old film rolls.
For the Berlinale in 2018, the digitally restored Hausa film, Shaihu Umar, was performed as part of the Forum Expanded.
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