Senegal and Germany:
Working together to strengthen small and medium-sized enterprises

Reducing barriers to investment faced by German companies

Germany’s foreign direct investment in Africa lags behind that of countries such as China, France, the Netherlands, the UK and the USA. In 2018 it accounted for only one per cent of all German foreign direct investment, which was, moreover, concentrated on a small number of African countries. The lack of reliable market information, networks and local business experience makes many companies reluctant to invest. This is where the Task Force on Senegal set up by the Special Initiative "Decent Work for a Just Transition" and BVMW (German Confederation of Small and Medium Sized Enterprises) comes into play.

‘The Task Force intends to make German companies aware of Senegal’s potential,’ says Stephan Kunz, manager of GIZ’s country programme in Senegal within the Special Initiative. To this end, Invest for Jobs and BVMW have connected their networks in various sectors such as metalworking, renewable energy and building construction. Invest for Jobs also provides German companies with services including market analyses, visits by delegations related to sector-specific issues, technical studies in cooperation with local players, and networking with partners in Senegal. This means that several instruments are deployed to minimise the entrepreneurial risk associated with entering the Senegalese market.

The Task Force on Senegal is supported by a Business Scout for Development (BSfD) who is seconded to BVMW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). ‘Intensive contact between Invest for Jobs and BVMW enables the Task Force to provide an appropriate response and to address the individual needs of the member companies,’ Kunz explains. The Task Force’s services are similar to those of a chamber of commerce, coupled with expertise in the country and the sector.

Task Force connects German SMEs with the African private sector

SMEs form the backbone of the German economy. In Africa the SME sector is still in its infancy. Kunz explains, ‘SME development will be boosted in line with the objectives of the Marshall Plan with Africa.’ He adds that for Africa, cooperation with German companies will simultaneously open up a new horizon in business development and in networking on the international market. The entrepreneurs will interact on equal terms and added value will be created for both sides.

In Germany, Africa generally remains underestimated as a potential sales market and business partner. ‘Yet the demand for high-quality products is growing in Africa. ‘German companies can be certain that their products will be valued here,’ Kunz says, adding that as a location Senegal has already attracted a number of German firms owing to its political stability, reliable partners and good infrastructure.

The Task Force aims to make German SMEs more aware of the opportunities on the Senegalese market, promote investment, and create networks between German and Senegalese businesses. It does so by arranging themed visits by delegations from small groups of companies in Senegal, conducting market studies on specific topics, and holding special regional workshops to inform companies in Germany. So far, more than ten business meetings have been organised in Germany to raise awareness of the Senegalese market. Furthermore, around 60 contacts with German firms that are interested in Senegal have been established and maintained. Fifteen German SMEs have been part of delegations to Senegal and gained an impression of the market opportunities there, enabling them to forge important links with Senegalese companies. In addition, technology market surveys of the metalworking and building construction sectors have been conducted and subsequently presented and discussed at special workshops. This resulted in the first specific project proposals that are already being implemented.

More African products on the German market; expansion to include additional countries

In the field of metalworking, the public-benefit Association of International Craft Cooperation e. V. (AICC) was founded with support from Invest for Jobs. Its member companies include German toolmakers and producers, trading firms and commercial end-users. The Association’s goals are to create employment in Africa’s emerging economies and developing countries, and to achieve a lasting improvement in the quality and productivity of local work.

Together with the Senegalese training organisation Pôle de Développement Industriel (PDI), a technical training programme is planned that will offer new specialised courses in industrial pipeline and boiler construction. AICC supports PDI in this area by providing materials and equipment for training courses in order to promote the use of their products on the African market.

In the medium term, the Task Force wishes not only to bring more German goods and services to Senegal, but also to bring more African products to Germany and to encourage production partnerships and the growth of consortia. ‘Our goal is to replicate the success of the Task Force on Senegal in other partner countries of the Special Initiative, and to enter into similar partnerships in Ethiopia, Côte d’Ivoire, Ghana, Morocco, Rwanda and Tunisia,’ Stephan Kunz says. For example, Invest for Jobs in Tunisia will soon be starting a cooperative scheme modelled on the Senegalese Task Force.

The Task Force on Senegal is supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH as part of the Special Initiative "Decent Work for a Just Transition", and by the Business Scouts for Development programme, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).