In February 2022, the EU and the African Union hosted a joint summit, the sixth in a series since 2000. Billed as a “reset” of Europe–Africa relations, it had been postponed from 2020 due to Covid-19. Much fanfare accompanied it, especially the announcement from the European side that half of the Global Gateway finance, a 2021 commitment to spend €300bn on global development between 2021 and 2027, would be spent in Africa, in a blend of both public finance and private investment.
European investors, given their colonial legacies in African countries, already have significant in-roads on the continent. In 2018, foreign direct investment (FDI) from Europe accounted for close to 50% of total stocks in Africa. But growth of European FDI has been slow — barely keeping up with African economic growth, which has quadrupled since 2000. European FDI has also been primarily focused on oil and gas and other extractive sectors, and in generally low value-added, low-tech activities.
Africans have therefore looked to many other players across the globe to invest in other sectors — from vehicle manufacturing to agricultural value-addition, to textiles, fintech and pharmaceuticals. Indeed, it could be argued that due to the lock-in of old extractive supply chains, Europe is a laggard compared to investors when it comes to realising that these are the crucial future economic growth engines for the African continent.