Turning ambition into action: How Africa and Europe can deliver economic growth through partnership and investment

Europe seeks deeper engagement with Africa – geopolitically, economically, strategically. Never has the political rhetoric surrounding the partnership been so ambitious: The European Global Gateway initiative now promises over €400 billion in sustainable investment worldwide, with more than €150 billion dedicated to the African continent. At the Global Gateway Forum in October 2025, the EU announced new guarantee agreements worth €742 million. The EU-AU summit spoke of an “equal alliance”. New raw materials and hydrogen partnerships are being announced nearly every month. In September 2025, the EU pledged an additional €1.3 billion to support Namibia’s transition to green energy and critical raw materials. At the same time, many African countries are advancing bold reforms – improving governance, strengthening regional integration, and creating more attractive conditions for private investment. These efforts underline Africa’s active role in shaping its own development trajectory.

But while ambitions flourish, implementation is stalling. Investments are still sluggish. According to the UN, there is an annual shortfall of four trillion US dollars needed to achieve the SDGs worldwide.

In Africa alone, the need for infrastructure investment is estimated at 130 to 170 billion US dollars per year. The actual level of funding is less than 80 billion US dollars per year – leaving over half of the investment needs unmet.

And: less than 10 percent of the actual funding stems from the private sector, underscoring the urgent need to scale up private investment. Foreign direct investment (FDI) in Africa in 2023 was three percent lower than in the previous year. In 2018 and 2022, less than one percent of German FDI went to Africa – even though Germany ranks among the ten most important sources of FDI on the continent. 

Investors report regulatory hurdles, project fragmentation, political risk, and a lack of planning certainty. In many countries, there are simply no investment-ready projects – even though capital would be available.

Therefore, a key question is: How can European ambition be turned into African impact? The answer is obvious: it cannot be done without the private sector. To achieve this, Europe must adjust the rules of the game to better incentivize private engagement. This includes risk sharing, reducing bureaucracy, and funding innovative investment vehicles.

At the same time, Europe already holds a unique position: it has world-leading technology providers in green hydrogen, energy, and infrastructure; in-depth expertise in building resilient value chains; and investors with long-term interests – including in developing markets. Africa, in turn, has a young, dynamic population – by 2050, more than one quarter of the global population will be African – along with 60 percent of the world’s solar energy potential. Moreover, Africa features a growing start-up scene with thousands of start-ups in the tech space. What’s lacking is an effective mechanism that meaningfully connects all sides. The EU’s Global Gateway initiative is designed to fill that gap — as a strategic investment tool to link African potential with European capabilities, capital and technology. 

Private investment is driven by economic incentives as well as clear and conducive regulatory and policy frameworks. These include planning certainty through reliable regulation, access to investable projects through project development, risk mitigation for example via blended finance, and strong local partners capable of operational implementation.

This is precisely where a range of approaches – jointly developed by GIZ on behalf of the German Government together with European and African partners – comes into play. GET.invest, co-financed by the EU and several member states, is now one of the most successful platforms for promoting private investment in renewable energy in Africa. More than 600 projects and companies have been made investment-ready through targeted support, 280 are currently in the pipeline, and more than 120 have been brought to financial close with a volume of €540 million of catalytic financing. It addresses a key gap: the transformation of good ideas into bankable business models.

Another example is ICAMA – the Innovative Capital Mobilisation in Africa Initiative. This new initiative, which is being implemented by GIZ in collaboration with development finance institutions, investors, and fund managers, aims to mobilise more capital for start-ups and growth firms in Africa. At least three innovative financing instruments are being jointly developed to address existing challenges in Africa’s venture capital market. This gives European investors the opportunity to diversify their portfolios and tap into a new, high-growth market, while also giving innovative companies in Africa the chance to grow further, create jobs, and local value creation – a win-win for everyone.   

The initiative SCALED – Scaling Capital for Sustainable Development – has been launched as a new platform for mobilising private investment in challenging markets. Multiple governments (Germany, Canada, Denmark, France, South Africa, United Kingdom) and private institutional investors (Allianz, AXA, La Caisse, Zurich Insurance Group) have joined forces to establish a structure in which public and private investors develop standards and processes to make blended finance investments more predictable and scalable. The aim is to activate billions in private funds for sustainable projects through clear structures, uniform ESG criteria, and reduced transaction costs. GIZ is managing the initiative’s Secretariat on behalf of BMZ.

The potential is also evident in other areas: Africa holds vast critical raw materials, yet much of the processing happens outside the continent. Europe can help change this through joint ventures, local technology development, and job creation – while advancing its Critical Raw Materials Act.

At the same time, Africa’s start-up scene is growing fast, especially in fintech, cleantech, and agritech. Hubs in Nigeria, Kenya, Egypt, and South Africa are gaining global attention, though many regions still lack funding, infrastructure, and support for entrepreneurs.

GIZ and the German Federal Ministry for Economic Cooperation and Development brings its strengths to bear in all these areas: as a bridge builder between governments, the private sector and the market, and civil society; as an implementing agency with operational depth; and as a platform for dialogue and partnership. In the last five years alone, it has supported over 200 projects related to private capital mobilisation, with a volume of over €3 billion. At the same time, development cooperation plays a strategically important role in creating enabling frameworks for private investment in the first place. After all, by investing in training skilled workers, alleviating poverty, advancing digital transformation, and strengthening the rule of law and good governance, we lay the foundation for a stable and attractive environment for business and investment. On this foundation technology, capital, and entrepreneurship translate into lasting local impacts.

What matters now is implementation. The focus must shift to translating Europe’s political ambitions into tangible results. This requires conducive frameworks, flexible financing solutions, stronger alignment between development cooperation, finance, and trade promotion, and a genuine partnership with the African private sector.

The private sector is not a sideshow, but rather the lever that turns declarations of intent into concrete development and helps achieve the Sustainable Development Goals for all. If Europe intends to deliver on its promises to Africa, it must take the next step and back its ambitions with investment.