By Dr Zhu Ming
Last week, the two-day Sixth European Union-African Union Summit was held in Brussels. As for the concrete outcomes, the most eye-catching one is surely an Africa-Europe Investment Package of at least €150 billion (about R2.5 trillion).
Regardless of the EU’s former and not ideal records of keeping investment promises in Africa, the €150bn investment package is, at most, a new package but with very little outlook of more extra financial resources for Africa. In other words, we could label the new offer as kind of “old wine in a new bottle” or a “game of numbers”.
Why?
First, we need to figure out how much of the investment package would be used annually. In other words, how long is its implementation period? The answer is not mentioned in the summit documents, but is easy to guess.
As the EU side claims that the Africa-Europe Investment Package is within the Global Gateway Investment Package initiated by Brussels in 2021, it is probable that they share the same implementation period, which is as long as seven years. An amount of €150bn over seven years means that the annual average scale would be around €21.4bn.
Second, let’s figure out the annual financial flows from Europe to Africa. What has been publicly disclosed is mostly composed by ODA (official development assistance), Team Europe (EU institutions plus its 27 member states) is Africa’s biggest donor, the total volume of ODA is more than €20bn in recent years.
We could make an early prediction that the just-made Africa-Europe investment promise would easily be fulfilled in the next seven years without any difficulties. This is because ODA resources from the Team Europe are enough to meet the investment target, not to mention that Team Europe’s billions private investments in Africa annually.
But there could be some risks if Team Africa fails to keep its promises. Since the finance resources would be from Team Europe which is composed of 28 actors, there have been no detailed contribution plans among the group yet. What is more, there are no concrete protocols to regulate Team Europe when it fails to keep its promises.
It is clear that the €150bn package is an easy task for the Team Europe amid this huge number. But there exist some risks of breaking the promise, with the risk the EU escapes its responsibilities without making any de jure promises related to itself.
* Dr Zhu Ming, Center for West-Asian and African Studies, Shanghai Institutes for International Studies of China; Visiting Scholar of Centre for Africa-China Studies, University of Johannesburg.
** The views expressed here are not necessarily those of IOL and Independent Media.