COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL Communication on a new Africa – Europe Alliance for Sustainable Investment and Jobs: Taking our partnership for investment and jobs to the next level
Date: 2018-09-12
Institutions: Directorate-General for International Cooperation and Development, European Commission
Subjects: Africa, EU aid, European neighbourhood policy, economic cooperation, economic integration, education, investment, job creation, private sector, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.9.2018  COM(2018) 643 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL  Communication on a new Africa – Europe Alliance for Sustainable Investment and Jobs:   Taking our partnership for investment and jobs to the next level           
 
 
Communication on a new Africa – Europe Alliance for Sustainable Investment and 
Jobs: taking our partnership for investment and jobs to the next level  

In a rapidly changing global landscape, Europe and Africa have much to gain from increased 
economic  and  political  ties.  This  document  sets  out  the  key  strands  of  action  for  a  strong 
economic  agenda  for  the  EU  and  its  African  partners.  It  seeks  to  promote  a  substantial 
increase  of  private  investment  from  both  Africans  and  Europeans,  boost  trade,  enhance  job 
creation  and  contribute  to  sustainable  and  inclusive  development,  promoting  standards  of 
modern  and  sustainable  technology,  environmental  and  labour  protection,  and  responsible 
business conduct. It amounts to an Alliance for Sustainable Investment and Jobs as part of 
the European Union – African Union Partnership.  

This Alliance is more than a financial plan. It represents a radical shift in the way we work as 
partners towards a logic focussed on Africa’s economic potential and the mobilisation of the 
private  sector.  The  Alliance  is  about  unlocking  private  investment  and  exploring  the  huge 
opportunities  that  can  yield  benefits  for  African  and  European  economies  alike,  with  a 
specific  focus  on  jobs  for  youth,  responding  also  to  Africa’s  demographic  patterns.  It  is  an 
economic strategy that puts the respective strengths of Europe and Africa to work, taking the 
ambition of the External Investment Plan1 to the next level. Building on concrete actions, the 
Alliance will support the generation of 10 million jobs in Africa in the next 5 years. 

This Alliance is not a stand-alone initiative. It is part of the wider set of EU-Africa relations 
and strategic frameworks joining Europe and Africa, such as the United Nations 2030 Agenda 
and its 17 Sustainable Development Goals as a guiding vision for both continents, as well as 
in  the relevant policy frameworks of the African Union (Agenda  2063) and the EU (Global 
Strategy2, European Consensus on Development3). It is a key element to deliver on the agreed 
commitments of the African Union-European Union Abidjan Summit Declaration and is also 
part  of  building  a  strong  African  pillar  in  the  Post-Cotonou  framework  and  developing 
partnerships  in  North  Africa  under  the  European  Neighbourhood  Policy.  The  principles  of 
partnership,  dialogue  and  ownership  will  be  at  the  heart  of  the  Alliance.  To  achieve  its  full 
potential  the  Alliance  should  mobilise  and  coordinate  EU  and  Member  States’  actions  and 
instruments with Africa. 

This coherent economic strategy builds on the June 2018 European Council’s conclusions that 
call for the creation of “a new framework enabling a substantial increase of private investment 
from both Africans and Europeans”, as well as on the European Commission’s proposals for 
the  next  Multi-Annual  Financial  Framework,  and  the  outcomes  of  the  EU-African  Union 
Commission – to - Commission meetings. It seizes upon the significant decisions of the 10th 
Extraordinary Summit of the African Union in Kigali on 21 March 2018. It also reflects the 

1 Strengthening European Investments for jobs and growth: Towards a second phase of the European Fund for 
Strategic Investments and a new European External Investment Plan, COM(2016)581. 
2 A Global Strategy on Foreign and Security Policy for the European Union, 2017. 
3 New European Consensus on Development ‘our world, our dignity, our future’, OJ C 210 of 30.6.2017. 

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line of the Meseberg Declaration of 19 June 20184 and intends to contribute to the agenda of 
the 2019 French Presidency of the G7.  

A  vigorous  mobilisation  with  African  partners  on  investments  and  jobs  is  fundamental    to 
address together mobility and migration, promoting a coordinated engagement of countries of 
origin,  transit  and  destination,  in  line  with  the  principles  of  solidarity,  partnership, 
accountability and sharing of responsibility. At the same time, improved common migration 
and  mobility  management  contributes  to  overall  stability,  which  favours  sustainable 
investment.  The  Alliance  is  an  essential  part  of  a  strategy  combining  in  a  coherent  and 
balanced way the different elements of our joint approach to migration: a shared responsibility 
for  addressing  the  root  causes  of  irregular  migration  and  forced  displacement,  effectively 
managing  borders,  preventing  and  fighting  migrant  smuggling  and  trafficking  of  human 
beings,  rescuing  and  protecting  lives,  offering  paths  for  legal  migration,  and  ensuring 
improved  cooperation  on  return,  readmission  and  reintegration  of  irregular  migrants  in  line 
with  the  established  principles  and  international  law  obligations,  as  well  as  agreed 
arrangements.  

As  part  of  this  comprehensive  approach,  legal  pathways  to  the  EU  should  be  enhanced  in 
order to offer safe and viable alternatives to dangerous routes and irregular migration. To this 
effect, in its new Communication on enhancing legal pathways to Europe5, the Commission 
calls  for the  realisation of  an  improved  EU  Blue  Card  Scheme    and  for  the  development  of 
pilot projects on legal migration with selected countries in Africa.  

As  the  dynamics  of  growth,  employment  and  inequalities  and  the  challenges  regarding 
instability,  resilience,  health  and  governance  vary  across  Africa’s  regions  and  between 
countries, the Alliance will take into account the diversity across the African continent and the 
specificities  of  each  country,  including  the  specific  challenges  of  fragile  situations  and  the 
contractual relations of the Northern African countries through their Association Agreements 
and  their  experience  of  cooperation  with  the  European  Union  through  the  European 
Neighbourhood Policy.  

1.  Boosting  strategic  investments  for  job  creation  and  strengthening  the  role  of  the 
private sector 

The private sector holds the largest potential for generating jobs and growth and it is therefore 
essential to boost responsible private – domestic and foreign – investments in Africa.  

State of play  

Investments  in  Africa  show  an  uneven  picture,  reflecting  global  uncertainty,  with  Foreign 
Direct  Investment  flows  to  Africa  fluctuating  and  not  showing  the  strong  upward  trend 
required.  South  Africa,  Nigeria,  Kenya,  Egypt  and  Morocco  attracted  collectively  58%  of 
total Foreign Direct Investment in 2016, while less advanced and more fragile countries face 

4 Meseberg Declaration, 2018. 
5 Enhancing legal pathways to Europe: an indispensable part of a balanced and comprehensive migration policy 
COM (2018) 635 

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systemic  challenges  to  attract  private  investment.  If  some  African  countries  continue  to  be 
commodity-dependent, others have managed to diversify their economies reacting to the low 
commodity  prices.  Furthermore,  since  2016  we  see  a  further  broadening  of  Foreign  Direct 
Investment beyond the extractive sector6.  

As  regards  EU  investments  in  Africa,  the  EU  is  Africa’s  biggest  investor,  with  its  Member 
States holding approximately 40% of Foreign Direct Investment stock worth EUR 291 billion 
in  20167.  Africa’s  strong  economic  progress  over  the  last  two  decades  and  the  inherent 
potential  for  the  future  mean  that  there  is  substantial  opportunity  for  doing  more. 
Demographic projections for Africa make it clear that it is also necessary to generate millions 
of new jobs, especially for youth entering the labour market. 

Proposed course of action 

Action  #1.  Support  to  Africa  to  crowd  in  investments  will  be  further  boosted  by  using 
increasingly substantial amounts  via blending and guarantees in order to leverage resources 
from  capital  markets  with  international,  European  and  national  financial  institutions,  to  de-
risk investments and to facilitate access to finance. The priority goes to value-adding sectors 
with a high potential for sustainable job creation, notably for women and youth, increasing the 
opportunities  for  them  to  realise  their  aspirations,  including  through  start-ups.  Specific 
attention  will  also  be  paid  to  situations  of  fragility.  Between  2014  and  2017,  the  EU  has 
leveraged through blending operations approximately EUR 35 billion. Since the launch of the 
External  Investment  Plan  and  the  creation  of  the  European  Fund  for  Sustainable 
Development8  in  2017,  the  EU  is  mobilising  funds  expected  to  leverage  EUR  15  billion  of 
investments  through  blending  and  over  EUR  16  billion  under  the  Guarantee.  Between  now 
and  2020,  it  is  on  track  to  deliver  on  the  global  External  Investment  Plan’s  objective  of 
leveraged  investments  in  Africa  and  the  Neighbourhood  worth  EUR  44  billion  by  2020.  
Concrete results  will  include  access  to  electricity  for  30  million  people and  companies,  and 
increased  renewable  energy  capacity  by  5  gigawatts.  24,000  people  will  have  access  to  all-
seasons roads through our leveraged investments in transport infrastructure. 3.2 million jobs 
are expected to be created in Africa just by the investment programmes focussed on small and 
medium  enterprises  alone.  These  are  powerful  examples  of  the  scale  and  impact  of 
interventions under the proposed Alliance.  

Under the next long-term budget (Multiannual Financial Framework), the EU should further 
improve its instruments and tools by ensuring a more efficient delivery and by substantially 
increasing available funding for that purpose.  

Action #2. For a surge in private sector investments to have the biggest possible impact, the 
most promising value chains at national and regional level must be identified. To this end, 
Jobs  and  Growth  Compacts  are  currently  under  discussion  with  most  of  our  African 

6 A case in point is Ethiopia, now the second largest recipient of Foreign Direct Investment in Africa with 3.6 
billion USD in 2017, mainly in sectors such as light manufacturing, textile and automotive (UNCTAD, 2018). 
7 EUROSTAT, 2018. 
8 Regulation (EU) 2017/1601 of the European Parliament and of the Council of 26 September 2017 establishing 
the European Fund for Sustainable Development (EFSD), the EFSD Guarantee and the EFSD 

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partners in order to steer the joint efforts around those value chains with the highest potential 
for  job  creation,  seizing  the  opportunities  for  manufacturing  and  processing,  unlocking  the 
huge  potential  of  the  green  and  blue  economy,  supporting  transition  to  low-carbon  and 
climate-resilient  economies,  exploiting  the  full  potential  of  the  digital  transformation  of  the 
economy,  in  particular  e-commerce  and  data  economy,  and  tackling  the  areas  requiring 
reform  in  order  to  improve  the  business  enabling  environment.  The  work  on  the  Jobs  and 
Growth Compacts requires also a structured dialogue with the European and African private 
sector, based on the Sustainable Business for Africa platform set up in the framework of the 
External Investment Plan. A link with the G20 Compact with Africa will be ensured. 

Action #3. Europe and Africa have an interest in working together more seriously on strategic 
developments  and  interests.  The  European  Commission  will  bring  together  African  and 
European public, private and financial operators and academia on a sectoral basis before 
the  end  of  this  year  to  examine  and  support  strategic  developments  in  critical  economic 
areas such as digital solutions, energy, transport and agriculture. The objective is to look at 
the long-term challenges and strategic interests, by examining how to accelerate impact, boost 
public and private investments, and best share knowledge and know-how. This would serve to 
define  strategies  to  promote  and  prioritise  sectoral  policy  and  regulatory  reform  in  African 
countries and facilitate related EU public and private investments. In May 2018, the EU and 
the  African  Union  already  set  up  a  Task  Force  for  Rural  Africa,  comprised  of  African  and 
European experts, to provide advice and recommendations on priorities and the next steps in 
our cooperation in the field of agriculture, looking inter alia at how to boost public and private 
investments  in  African  sustainable  agriculture,  how  to  facilitate  EU  responsible  private 
investments,  boosting  intra-African  trade  as  well  as  exports  from  African  countries,  and 
identifying the best policies to support African youth working in agriculture, agribusiness and 
agroindustry.  Following  the  European  Union-African  Union  Commission  to-Commission 
meeting in May 2018, an European Union-African Union digital economy taskforce is being 
established.  Moreover,  joint  sectoral  ministerial  meetings  between  Africa  and  the  EU  are 
being  organised  and  being    pursued.  The  Commission  will  also  lend  its  support  to  similar 
initiatives from Member States contributing to the realisation of this Alliance such the Africa-
Europe  High-Level  Forum  organised  by  Austria  in  the  context  of  their  Presidency  of  the 
Council before the end of the year. 

West Africa - Supporting entrepreneurs and Small and Medium-Sized Enterprises  

The EU is partnering with Proparco9  to strengthen the financing and support to entrepreneurs 
through : (i) a seed-funding mechanism in the form of refundable advances, which will allow 
the  financing  of  experimental  and  prototyping  phases  and  to  accompany  the  youngest 
entrepreneurs in the development of their project; (ii) technical support to assist Micro, Small 
and  Medium-Sized  Enterprises  to  improve  their  management,  marketing,  production  and 
governance  capacities  ,  and  to  closely  support  the  local  investment  funds;  (iii)  a  guarantee 
covering the first losses of the local investment funds. The leverage created by the EU’s EUR 

9 Proparco is a subsidiary of Agence Française de Développement (AFD) focused on private sector development. 

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15.6  million  contribution  will  allow  financing  of  50  Micro,  Small  and  Medium-Sized 
Enterprises    representing  5,000  jobs  created  or  maintained.  The  programme  covers  Burkina 
Faso,  Niger  and  Senegal,  and  be  widened  to  Mauritania,  Cameroon,  Mali,  Ghana  and  Côte 
d’Ivoire from 2019. 

West Africa - NASIRA Risk-Sharing Facility - Financing for underserved entrepreneurs 

The  EU  is  partnering  with  the  Dutch  development  bank  Financierings-Maatschappij  voor 
Ontwikkelingslanden  to  address  perceived  and  real  risks  of  lending  to  entrepreneurs  in 
countries  neighbouring  the  EU  and  in  Sub-Saharan  Africa.  The  project  improves  access  to 
investment loans by offering local financial institutions portfolio guarantees containing loans 
to entrepreneurs. It focusses on i) internally displaced people, refugees, returnees, as well as 
women  and  young  people.  Under  this  programme,  EUR  75  million  from  the  External 
Investment Plan’s Guarantee will generate  EUR 750 million up to EUR 1 billion investment 
in 800,000 jobs in Africa. 

Morocco - Hybrid solar power plants NOOR Midelt I and NOOR Midelt II  

The  EU  is  helping  build  the  infrastructure  for  renewable  energy  to  cope  with  increasing 
demand  for  electricity  and  contributing  to  the  objective  of  52%  renewable  energy  by  2030, 
with a positive impact on competitiveness.  The EU is providing a grant of EUR 60 million to 
leverage  funding  to  help  meet  the  cost  of  infrastructure.  The  action  is  co-financed  by 
Kreditanstalt für Wiederaufbau (lead Agency), Agence Française de Développement and The 
European Investment Bank from the EU side and by World Bank, African Development Bank 
and the Clean Technology Fund. 

Tunisia - Supporting Start-up ecosystem  

The EU’s wide-ranging assistance to Tunisia’s economy (which has included 60,000 people 
receiving microcredits to start or grow a small business) aims to ensure that the country can 
meet  the  needs  of  the  growing  numbers  of  young,  educated  Tunisians  ready  to  enter  the 
workforce. A new programme  worth EUR 25 million will support about 1,000 Tunisian start-
ups:  (i)  improve  the  services  available  to  start-ups  and  entrepreneurs    (such  as  co-working 
spaces,  incubators,  or  accelerators);  and  (ii)  support  the  implementation  of  an  enabling 
regulatory environment for innovative entrepreneurship and start-ups. Promising start-ups will 
also  receive  seed  funding.    The  objective  pursued  by  such  an  innovative  programme  is  to 
contribute to Tunisia’s economic diversification and to an acceleration of its growth through 
the creation of new types of businesses with high potentials. 

2. Investing in people by investing in education and skills 

An economic partnership seeking to boost investments and create jobs must look at matching 
skills with the demands of the labour market. More investment is needed to provide people, in 
particular  girls  and  women,  with  access  to  education,  notably  Technical  and  Vocational 
Education  and  Training,  as  well  as  digital  skills  and  competences,  and  to  address  the 
mismatch  between  the  skills  that  young  people  receive  at  secondary  and  tertiary  level  and 

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those  needed  for  their  working  life.  This  will  help  equipping  youth  with  relevant  skills  to 
build their future, whilst consolidating as well pathways to legal migration.  

State of play 

Africa  has  the  youngest  population  of  any  region  of  the  world  and  continues  to  experience 
strong demographic growth, but its workforce is the least skilled in the world10. Enrolment in 
Technical  and  Vocational  Education  and  Training  across  Africa  stands today  at  only  6%  of 
total enrolment in secondary education11. Although some degree of skills mismatch is natural 
and unavoidable in any growing and restructuring economy, many graduates from technical, 
vocational,  and  general  education  in  Africa  pursue  fields  for  which  there  is  weak  labour 
demand12. 

The  EU  is  Africa’s  longstanding  partner  in  the  area  of  education,  from  early  childhood  and 
primary to higher education, including Vocational Education and Training and entrepreneurial 
learning as well as in research and innovation. Between 2014 and 2020, the EU is supporting 
bilateral education programmes in Africa with approximately EUR 1.34 billion. Nearly EUR 
230 million (17%) of this amount is for Vocational Education and Training. By 2020, 35,000 
students and researchers from Africa will have benefitted from Erasmus+, leading to a total 
number of 105,000 by 2027. By 2020, 750,000 people will also have received Technical and 
Vocational  Education  and  Training  for  Skills  Development.  In  addition,  through  the 
Emergency  Trust  Fund  for  Africa,  the  EU  is  massively  supporting  economic  development 
programmes aimed at addressing skills gaps, at improving employability through vocational 
training, and at supporting job creation and self-employment opportunities. In the Sahel and 
the Horn of Africa, these programmes have reached a total of EUR 1.1 billion since 2015. In 
2014-2020,  the  EU  is  also  supporting  education  in  Africa  through  global  initiatives  such  as 
the Global Partnership for Education with EUR 475 million.  

More investment in education is needed, both from the EU, its Member States and from our 
African  partners in line with  the African  Union’s Continental Education Strategy for Africa 
(2016-2025).  

Proposed course of action 

Action  #4.  The  EU  will  support  an  important  African  Union  skills  initiative13,  aimed  at 
developing  an  African  continental  qualification  framework,  a  facility  to  enhance  private 
sector  involvement  in  Technical  and  Vocational  Education  and  Training,  supporting  labour 
market and Technical and Vocational Education and Training system diagnostics and piloting 
mobility  of  students  and  staff.  Access  of  higher  education  and  research  institutions  to 

10 Africa Pulse (2017), World Bank. 
11 African Union Continental Education Strategy 2016-2025. 
12 Africa Pulse (2017), World Bank. 
13 EUR 27 million from the Pan-African Programme in support of i) the “Skills Initiative for Africa” Financing 
Facility in cooperation with Kreditanstalt für Wiederaufbau for a total of EUR 14 Million, ii) the “Skills 
Initiative for Africa” Technical Cooperation in cooperation with Deutsche Gesellschaft für Internationale 
Zusammenarbeit GmbH for a total of EUR 8 million and iii) pilot “EU-African Union Vocational Education and 
Training mobility project” for a total of EUR 5 million. 

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adequate e-infrastructures will be supported14. The mobility of students, staff and academics 
across the African continent will be further facilitated (African “Erasmus”)15. The contents of 
tertiary education programmes and skills acquired by university students will be made more 
relevant  to  labour  market  needs  and  the  harmonisation  of  higher  education  across  the 
continent  will  be  supported  aiming  to  ensure  the  recognition  of  qualifications  within  Africa 
and  the  EU16.  The  EU  will  continue  to  support  scholarships  and  exchange  programmes 
between  tertiary  education  institutions  and  support  knowledge  creation  in  universities  to 
become  full  actors  in  the  complex  processes  of  innovation  on  which  future  economic 
development and job creation depends through Erasmus+. In total, EU support under the Pan-
African  programme  will increase from EUR 45  million in  2014-2017 to EUR 63  million in 
2018-2020, reaching EUR 108 million. 

Action  #5.  Improved  support  at  national  level  will  match  skills  to  strategic  development 
choices for each country17, taking inspiration from successful initiatives in North Africa such 
as the Med4jobs programme18. Support will be linked as much as possible to the sectors with 
strong  potential  for  investment  and  job  creation.  It  will  therefore  be  on  the  agenda  of  the 
discussions  regarding  the  Jobs  and  Growth  Compacts  as  well  as  addressed  in  the  sectoral 
strategic  meetings  with  private  sector,  academia  and  financial  operators  (as  proposed  in 
Action  3).  Under  the  next  Multiannual  Financial  Framework,  a  significant  effort  should  be 
made  to  further  strengthen  the  EU’s  engagement  in  this  area,  in  full  coherence  with  the 
foreseen boost to leverage private investments for job creation. The EU will ensure that such 
increased investment is also more strategically targeted, with a focus on the sectors with the 
highest potential for job creation, taking into account the sizeable importance of the informal 
sector in the African economy with a view to improving its typically low productivity rates. 

The Gambia - Youth Empowerment Scheme 

The EU is partnering with the International Trade Centre and the Government of The Gambia 
to  support  job  creation  and  entrepreneurship  for  Gambian  youth.  This  EUR  11  million 
programme    provides  skills-building  training  and  support  to  young  entrepreneurs  and  trade 
promotion organisations. The aim is that by 2021, 7,000 youths should complete technical or 
vocational  training  programme  or  an  apprenticeship,  and  that  at  least  8,000  should  benefit 
from entrepreneurship services – such as business advisory support and access to finance. 

Mediterranean Initiative for Jobs benefiting North African countries  

14 EUR 30 million in 2018-2020 from the Pan African Programme, in addition to EUR 20 million allocated 
during 2014-2017. 
15 EUR 20 million in 2018-2020 from the Pan African Programme, in addition to EUR 20 million allocated 
during 2014-2017 
16 EUR 13 million in 2018-2020 from the Pan African Programme, in addition to EUR 5 million allocated during 
2014-2017. 
17 EUR 40 million in 2018-2020 foreseen for Botswana, Gabon, Ghana, Guinea-Bissau and Mauritius. 
18 The programme addresses the mismatch between skills and labour market needs, by fostering 
entrepreneurship, intermediating between labour supply and demand, and by enabling Micro, Small and 
Medium-sized Enterprises through the promotion of incubators and coaching programmes. 

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The Mediterranean Initiative for Jobs (Med4Jobs), developed between the EU and the Union 
for  the  Mediterranean  covers  both  the  supply  and  demand  side  of  the  labour  market,  by 
targeting three core issues: (i) Employability, by identifying and scaling-up across the region 
successful  training  experiences  that  address  the  mismatch  between  skills  and  labour  market 
needs;  (ii)  Job  intermediation,  by  replicating  successful  job  facilitation  and  intermediation 
experiences; (iii) Business Environment, by developing an enabling business environment for 
Small  and  Medium-sized  Enterprises,  such  as  coaching  programmes  or  support  for  creative 
industries. 

Guinea - Support Programme to the socio-economic integration of young people 

The  EUR  65  million  INTEGRA  programme,  on  which  the  EU  partners  with  the  Belgian 
Development  Agency,  Gesellschaft  für  Internationale  Zusammenarbeit  and  the  International 
Trade  Centre,  intends  to  create  11,000  jobs,  and  to  involve  14,000  youth  in  vocational 
trainings  to  improve  their  employability  and  their  integration  on  the  job  market.  7,420 
promising Micro, Small and Medium-sized Enterprises will be supported and seven financial 
institutions offering products adapted to the Micro, Small and Medium-sized Enterprises and 
young entrepreneurs will be strengthened.  

3. Strengthening business environment and investment climate  

Boosting  private  sector  investment  requires  peace,  security  and  stability,  and  an  enabling 
investment  climate  and  business  environment,  including  macro-economic  stability  and  open 
financial systems for increased private sector credit. It encompasses also adequate actions to 
address broader critical governance issues, such as strength of government institutions, rule of 
law, transparency and accountability, as well as corruption and illicit financial flows.  

State of play 

The  investment  climate  in  Africa  has  been  generally  improving,  with  significant  national 
differences, but investor surveys19 also clearly indicate that much more is needed in this area 
to  improve  Africa’s  capacity  to  compete  worldwide  in  attracting  investment  capital.  Since 
2009, Foreign Direct Investment inflows to Africa have systematically accounted for less than 
5%  of  total  foreign  direct  investment  inflows  worldwide.  Rule  of  law,  an  independent 
judiciary,  and  predictability  of  taxation,  as  well  as  peace  and  stability  are  all  key  factors 
influencing both domestic and foreign investors’ decisions. The cost of setting up a business 
is thought to be around three times higher in fragile states, significantly discouraging private 
investment20.  

Proposed course of action 

Action #6. Under the Alliance for Sustainable Investment and Jobs, the Commission proposes 
to  develop  a  strengthened  dialogue  and  cooperation  with  African  partners  on  the 
investment climate, including investment protection where appropriate.  This will be backed 

19 Inter alia World Bank Doing Business Report 2017. 
20 European Political Strategy Centre strategic note, The Makings of an African Century (2017). 

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up by continued support to policy reforms that improve the business environment and to the 
institutional  and  technical  capacities  of  African  institutions,  including  through  digital 
solutions,  to  ensure  strong  public  finance  management,  including  transparency  of  public 
procurement  and  expenditure  and  the  fight  against  corruption  and  fraud,  improved 
accountability as well as respect for the Rule of Law and access to Justice. The enhanced use 
of  EU  instruments  of  Twinning  and  Technical  Assistance  and  Information  Exchange  will 
support  efficient,  transparent  and  accountable  public  administrations.  Efforts  will  also  be 
stepped up to support partners on domestic resource mobilisation, including the fight against 
Illicit  Financial  Flows21,  which  are  responsible  for  at  least  USD  50  billion22  leaving  the 
continent  annually,  largely  surpassing  the  total  amount  of  annual  Official  Development 
Assistance. These issues are raised in EU dialogues with the partner countries, notably in the 
context of budget support and of political dialogue; they will also be addressed in the private 
sector dialogues under the External Investment Plan as well as in EU Business Fora and the 
strategic sectoral discussions with private sector, academia and financial operators. The link 
with the G20 Compact with Africa will be ensured. In 2016, the EU and EU Member States’ 
support to improving the business climate in Africa amounted to EUR 200 million23, of which 
EU support represented EUR 50 million. For the period 2018 to 2020, a significant increase 
of EU support to business and investment climate reforms in Africa is envisaged under Pillar 
3 of the External Investment Plan,  moving to EUR 300-350 million on average per year, in 
addition  to  dedicated  actions  geared  at  improving  governance  and  ensuring  peace  and 
stability. This should further increase in the period 2021 to 2027 under the next Multi-Annual 
Financial Framework.  

Benin - Fighting corruption through budget support 

The EU has concluded with the Government of Benin a Good Governance and Development 
Contract  for  budget  support  worth  EUR  114  million  in  2016.  The  aim  is  to  promote  good 
economic  and  financial  governance  by  strengthening  the  transparent  management  of  public 
finances,  creating  a  credible  system  to  fight  corruption  based  on  the  independence  of  the 
judiciary, and improving the business climate. Payments under this contract will be done on 
the basis of  progress of reforms in these areas.  

Côte d’Ivoire - Trade and regional integration support programme 

This EUR 16 million programme supports the modernisation of trade and investment related 
regulations  and  institutions,  as  well  as  trade  facilitation.  This  has  contributed  to  Côte 
d’Ivoire’s  improved  ranking  in  the  “Doing  business”  classification,  moving  up  from  167  in 
2010 to  142 in  2016. Exports have increased as well as the share of Côte d’Ivoire in  world 
exports, which has positively impacted on its ability to take advantage of the new Economic 
Partnership Agreement. Import delays have improved from 864 hours in 2011 to 125 hours in 

21 Unrecorded capital flows derived from corruption, criminal activity, tax evasion and laundered commercial 
transactions. 
22 Report of the High Level Panel on Illicit Financial Flows from Africa, 2014. 
23 Organisation for Economic Co-operation and Development, 2018. 

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2016. It has been the first programme of this size in favour of Ivorian competitiveness and has 
enabled Ivorian companies to expand their business and create jobs. This was complemented 
by a budget support programme to improve transparency in the judiciary system and in public 
procurement, as two other key elements of the investment climate, and a regular dialogue with 
both authorities and private sector on impactful policy reforms. 

Egypt - EU facility for inclusive job and growth creation 

The EU is supporting a series of measures to improve the environment for business creation 
and  economic  development,  facilitate  access  to  finance  for  Micro,  Small  and  Medium-sized 
Enterprises and develop their role in key value chains, in order to stimulate the economy and 
create  jobs,  particularly for  youth.  This  EUR  75  million  intervention  is  expected  to  leverage 
around EUR 400 million. It aims to (i) lower the administrative burden on Micro, Small and 
Medium-sized Enterprises, and strengthen the protection of intellectual property rights; (ii) to 
facilitate Micro, Small and Medium-sized Enterprises’ access to long term finance and know-
how;  support  enterprise  growth  and  competitiveness;  facilitate  business  linkages  to  foster 
value  chain  development;  encourage  innovation  among  Micro,  Small  and  Medium-sized 
Enterprises, including young entrepreneurs. 

Ethiopia – supporting dialogue on the business environment 

The  EU  has  provided  the  start-up  funding  for  the  EU  Business  Forum  in  Ethiopia,  which 
supports  the  dialogue  on  business  climate  between  different  government  agencies  and  EU 
investors  and  has  held  regular  discussions  with  the  Ethiopian  Investment  Commission  since 
2015. The issues raised (on the basis of a business barometer conducted in 2014 and updated in 
2016)  included  tax  administration  and  administrative  burden,  business  registration/licensing 
and visa issuance, logistics and Forex availability. Some of these topics have also been raised 
at  higher  level  in  the  context  of  the  political  dialogue.  It  has  contributed  to  progress  on  the 
investment climate and a channel of communication between the government and the business 
community. The EU Business Forum in Ethiopia is now self-financed.  

4. Tapping the full potential of economic integration and trade  

Investments  in  value-adding  and  labour  intensive  sectors  also  requires  markets  for  the 
products  and  services.  Advancing  the  economic  integration  process  at  regional  and 
continental  level  in  Africa  and  boosting  trade  relations  with  the  EU  are  therefore  essential 
components of a coherent economic strategy.  

State of play 

Intra-African trade remains very low despite significant growth potential; in 2000, it was at 
10%, in 2014 at 16% according to data24 from the United Nations Conference on Trade and 
Development,  African  trade  with  the  EU  is  significant:  the  EU  is  Africa’s  biggest  trading 
partner, accounting for 37% of African exports in goods worth EUR 110 billion and 35% of 
African  imports  in  2017  worth  EUR  133  billion  and  the  EU  remains  the  most  open  market 

24 UNCTAD, Africa Economic Outlook 2017. 

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and the main destination of African manufactured goods. Africa is also the largest recipient of 
EU  Aid  for  Trade  in  the  world,  amounting  to  EUR  4.8  billion  commitments  in  2015.  Yet, 
overall  EU  trade  figures  with  Africa  are  comparable  to  EU  trade  with  Switzerland,  which 
amply demonstrates that there should be significant growth potential for EU – Africa trade25 
in both directions.  

Proposed course of action 

Action #7. With the launch of the African  Continental Free Trade Area in  March 2018, the 
launch of the Single African Air Transport Market and the signing of the Protocol on the Free 
Movement of Persons, African aspirations for further economic integration are clearly spelled 
out. The EU will lend its full support to the African Continental Free Trade Area. Support to 
the African Continental Free Trade Area negotiations should increase from EUR 7 million 
(2014-2017)  to  EUR  50  million  (2018-2020),  funding  institutional  support  as  well  as 
technical  support  to  the  various  phases  of  the  negotiations  (on  issues  such  as  Technical 
Barriers to Trade, Sanitary and Phytosanitary measures, Intellectual Property Rights including 
Geographic  Indications,  investment,  competition,  e-commerce),  including  support  for  data 
gathering and data analysis.  

Action  #8.  Strengthening  trade  between  the  EU  and  Africa.  Building  on  the  African 
Continental  Free  Trade  Area  implementation,  the  long-term  perspective  is  to  create  a 
comprehensive continent-to-continent free trade agreement between the EU and Africa. To 
prepare this, Economic Partnership Agreements, Free Trade Agreements including the Deep 
and  Comprehensive  Free  Trade  Areas  on  offer  to  the  countries  of  North  Africa,  and  other 
trade regimes with the EU should be exploited to the greatest extent, as building blocks to the 
benefit  of  the  African  Continental  Free  Trade  Area.  The  ambition  is  to  further  increase 
African  exports  and  to  attract  investment,  including  into  manufacturing  and  processing 
sectors, and to encourage the creation of regional value chains through flexible rules of origin. 
In  support  of  this,  the  Alliance  will  further  strengthen  and  better  target  Aid  for  Trade 
measures in support of trade facilitation and approximation of technical and quality product 
standards and other regulatory measures.  

Action #9. Economic integration and the development of value chains that are linked to the 
regional, continental and global set-up also require connectivity, both intra-African as well as 
strategic linkages between the EU and Africa. Infrastructure investments underpin the ability 
of  African  countries  to  fully  capitalise  on  job  and  growth  creation  opportunities26.  The 
Alliance will look at supporting the policy frameworks and  the core enabling infrastructure,  
including  broadband  and  e-infrastructures.  Particular  attention  will  go  to  sectors  including 
sustainable  energy,  transport,  data  economy,  information  and  communications  technologies, 
circular economy, sustainable use of natural resources, waste and water management and blue 

25 Total EU trade with Africa only represents 7.5% of overall extra-EU trade, roughly the size of EU trade with 
Switzerland.  South  Africa  and  Northern  African  countries  account  for  almost  two  thirds  of  this  (European 
Commission,  Eurostat,  Comext,  Client  and  Supplier  Countries  of  the  EU28  in  Merchandise  Trade  (value  %), 
trade: 
2016, 
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122530.04.2018.pdf. 
26 Africa Economic Outlook 2018, African Development Bank. 

excluding 

intra-EU 

11 

 
 
                                                            
growth;  this  could  include  offering  partnerships  with  EU  industry,  in  particular  where  it  is 
world  leader.  This  will  be  linked  up  with  the  support  provided  to  investments  through 
blending and the guarantee.  

EU Aid for Trade for Africa  

The EU and its Member States are the leading global Aid for Trade provider with EUR 13.2 
billion in commitments (29% of the global Aid for Trade figures), of which Africa continues 
to  receive  the  largest  share,  i.e.  EUR  4.8  billion  in  2015  (36%  of  EU  collective  Aid  for 
Trade). Africa is the first recipient of grants with respect to other regions whose type of flows 
is more diverse (grants, loans and equity). This includes the EU’s Trade Related Assistance 
(including  trade  policy  and  regulation,  trade  promotion  and  facilitation,  and  other  trade-
related needs) as well as wider Aid for Trade categories, such as trade-related infrastructure 
(physical  infrastructure  including  transport  and  storage,  communication,  energy  generation 
and supply), building productive capacities (trade development and productive sectors such as 
agriculture,  fisheries,  forestry,  industry,  mineral  resources  and  mining),  trade-related 
adjustments  (contribution  to  government  budgets  in  countries  implementing  trade  policy 
reforms). 

Madagascar - Economic Partnership Agreement Implementation Plan 

Under  the  Madagascar  National  Economic  Partnership  Agreement  Implementation  Plan, 
Malagasy companies in the textile sector have drawn benefits from the Economic Partnership 
Agreement with the EU and the support associated to it (up to EUR 10 million). For example, 
the  Malagasy  textile  company  EPSILON  has  seized  the  opportunities  from  the  duty-  and 
quota-free access to the EU market with more beneficial rules of origin, allowing for single 
transformation and the opportunity to source raw materials from all over the world. The Plan 
rapidly  increased  its  worldwide  recognition  thanks  to  its  compliance  with  EU  and 
international  standards,  collaborating  with  leading  brands  to  promote  Corporate  Social 
Responsibility in industry. The company was established in 1999 with 100 employees. Today, 
it counts 2000. 75% of its workers hold bank accounts; 100% of employees’ children are in 
school; 50% of employees are homeowners; 98% of managers come from internal promotion.  

5. Ways and means  

Action  #10.  For  the  Alliance  to  be  successful,  constant  dialogue  between  European  and 
African  partners,  increased  involvement  with  the  private  sector  and  close  consultation  with 
civil society are needed. The Alliance also needs to be backed up with an important package 
of  financial  resources.  The  EU  and  its  Member  States  already  are  Africa’s  first  partner 
representing,  in  2016,  55%  of  all  Official  Development  Assistance  to  Africa,  amounting  to 
EUR 23 billion.  

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The  Commission’s  proposal  for  the  future  Multi-Annual  Financial  Framework  of  the  EU 
foresees  an  ambitious  Neighbourhood,  Development  and  International  Cooperation 
Instrument27 worth EUR 89.2 billion for 2021-2027, with Africa and the Neighbourhood as its 
priorities. At least EUR 32 billion of grants for Sub-Sahara Africa and an expected EUR 7.7 
billion for North Africa will be further complemented by additional funding from the thematic 
pillar,  the  rapid  response  and  the  “cushion”  of  the  Instrument.  Building  on  the  External 
Investment  Plan  and  its  European  Fund  for  Sustainable  Development,  the  instrument  also 
foresees  a  substantial  increase  in  the  use  of  blending  and  guarantees,  to  leverage  sizable 
amount  of  funds  from  the  public  and  the  private  sector.  Under  the  proposed  new  external 
investment  architecture28,  with  an  increased  firepower  of  the  External  Action  Guarantee  of 
EUR  60  billion  globally,  Africa  will  be  a  priority  region.  The  High  Representative  with 
support of the Commission has also proposed to set up the European Peace Facility29 worth 
EUR 10.5 billion for 2021-2027, which will further enhance our work with Africa in  ensuring 
peace,  security  and  stability  across  the  African  continent,  which  are  crucial  for  economic 
development. 

Summary of actions 

#1  Boosting strategic investments via blending and guarantees 

#2 

Supporting the opportunities for manufacturing and processing at national 
and regional level via the Jobs and Growth Compacts  

#3  Establishing  sectoral  groups  of  African  and  European  public,  private  and 
financial  operators  and  academia,  under  the  lead  of  a  Commissioner,  to 
provide expertise, advice and recommendations  

#4 

#5 

#6 

#7 

#8 

Supporting education and development of skills at continental level 

Supporting skills development at national level to match skills to strategic 
development choices for each country 

Strengthening the dialogue, cooperation and support on the investment and 
business climate 

Supporting the Africa Continental Free Trade Area  

Strengthening  intra-African  and  EU-African  trade  in  the  long-term 
perspective of a continent-to-continent free trade agreement 

#9 

Supporting connectivity both intra-African and between the EU and Africa 

#10  Mobilising a substantial package of financial resources 

27 COM(2018) 460 final, 14 June 2018. 
28 The Commission has adopted today a Communication Towards a more efficient financial architecture for 
investments outside the European Union (COM (2018) 644) setting-out ideas on rendering the current system 
even more effective. 
29 See factsheet on the European Peace Facility. 

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