Denmark Steps Up Engagement With Africa

Investment strategies are to be aligned with sustainable development and the needs of African countries.


Investment in Africa’s energy infrastructure is vital. PHOTO Chris Kirchhoff

Denmark is one of the most generous nations on earth. Very few countries meet the United Nations target of giving 0.7% of gross national income in aid to the developing world. Denmark does.

As part of a new focus on Africa, the Danish government launched in 2013 a policy called ‘Opportunity Africa’. This aims to co-ordinate policy in three areas: foreign policy, aid, and trade and investment.

The ‘aid’ word, which has fallen out of fashion in recent times, is replaced in the literature that announced this move with ‘development co-operation’. Although the word ‘aid’ might have gone away, the need for help has not.

Christian Friis Bach, the Danish Minister of Development Co-operation has pledged $717-million (DKK3.8-billion) in 2013 and 2014, ‘for inclusive and green growth in Africa, mainly through bilateral development co-operation with priority countries where we spend $567-million (DKK3-billion)”.

Various African regional and sub-regional organisations will receive about $160-million in the 2013/14 financial year from the Danish state.

The IFU (a private sector initiative, the Investment Fund for Developing Countries) lists 180 investments in Africa that it has supported through giving advice and capital to Danish companies. The capital either gives IFU a stake in the project or is loaned to the Danish company. Overall, the IFU has invested in 787 projects in 85 developing countries, but opportunities are growing in Africa.

Giant logistics company AP Mǿller-Mærsk and the Royal Danish Fish Group are among the IFU’s 80 investment projects in West Africa. New oil finds off the coast of Ghana, plus existing deposits off Nigeria are the most obvious opportunities, but the infrastructure and tourism markets are also growing fast.

In East Africa Rezidor (the hotel group) and Grundfos (who manufacture water pumps, amongst other things) are among the 40 or so projects that the IFU has been involved in. Southern Africa has attracted over two-billion Danish kroner through close to 60 projects.

The renewable energy market is an area where Danish expertise is already playing a big role. Wind company Vestas is very active South Africa, as are LM Wind Power, who are looking for a site to build a manufacturing facility.

Every African country needs energy and the infrastructure that accompanies it. Denmark’s role in this sector is sure to grow.

As the Minister of Trade and European Affairs, Nick Hækkerup, says, “There is a huge demand in Africa for sustainable investments in order to boost inclusive and green economic growth in the region. I think regional economic integration, development cooperation and commercial engagement must often go hand in hand in order to make this happen.”

– Frontier Market Network