New office and hub of the Friedrich Naumann Foundation for Freedom in Nairobi
Address at the new Office in Nairobi
Africa has always held special significance for the Friedrich Naumann Foundation. It is a continent of opportunities; it has great potential that can be leveraged through digitalisation and free trade. I will say a little more about this in a moment.
But first I would like to address a question that some of you probably asked yourselves when you received the invitation to this event. Why is the Foundation opening an office in Nairobi only now, in 2022? The other political foundations from Germany have been here for many years.
The answer is quite simple. The Friedrich Naumann Foundation had an office in Kenya before, but it had to close when the then Regional Director, Dorothee von Brentano, fell out of favour with President Daniel arap Moi's regime in the mid-1990s and was asked to leave the country.
Courageous commitment to freedom and democracy sometimes takes its toll. Unfortunately, we experience this repeatedly. Nairobi was not the first or the last office we had to close for political reasons. As examples from the recent past, I would like to mention Hong Kong and Moscow. Freedom is so restricted in China and Russia today that it is no longer possible for us to do meaningful work.
I am not saying this to ask for sympathy for the Foundation. I am talking about a trend that must worry all democrats. Globally, liberal democracy as a form of government is under pressure. In 2022, the Bertelsmann Transformation Index recorded more autocratic states than democracies. This was last the case in 2004. One must fear that this development will continue. In view of global crises – think of Covid and the skyrocketing prices for food and energy to mention but two – the calls for easy solutions and strong, autocratic leaders are getting louder in many countries.
Given all this, I see the return of the Friedrich Naumann Foundation to Kenya as a sign of hope. The time of the Moi regime is long gone and democracy in Kenya has matured. This was impressively demonstrated by the elections at the beginning of August. Disagreement over the election results was not settled violently in the streets, but decided by the Supreme Court – as provided for in the constitution. Kenya has thus become even more of a beacon for the entire Horn of Africa: a beacon for democracy, freedom and economic stability.
Nevertheless, we must not close our eyes to the fact that Kenya and Africa as a whole are facing enormous challenges. Forecasts predict that the population of Africa will almost double by 2050, from the current 1.3 billion to 2.5 billion people. These people will need food, clean water and good health care, but also jobs, housing and an efficient infrastructure. In other words: Africa needs economic growth.
Chances to achieve this are good. Africa has the youngest population of all continents – 70 percent of its people are younger than 35. This large pool of motivated young people is an asset – provided, of course, that schooling and professional qualifications keep pace with the population increase.
This is where technological progress comes into its own for Africa. The triumph of digitalisation provides an opportunity to leapfrog entire stages of development.
Today, intricately fixed-wired communication networks are no longer needed to connect people. Mobile networks enable education, creativity and complex economic activities – even in the vast, sparsely populated regions of the continent.
A wonderful example is the use of mobile payment systems like Kenya's M-Pesa. It is a great success story. Half of the world's mobile money users live in sub-Saharan Africa and the rest of the world can learn from the African experience, for example the planned introduction of a Central Bank Crypto Currency. I hope I am not giving too much away when I say that the team in Nairobi is currently working on a study to this effect.
An important contribution to the required economic growth in Africa can also be made by reducing trade barriers, first and foremost in Africa itself. Intra-African trade accounts for less than 20 percent of the continent's total international trade – in Asia it is 50 percent and in Europe almost 70 percent, a result of the wave of integration since the end of World War II. In this respect, Africa has an enormous amount of catching up to do.
For the first time, there is now an opportunity to really meet this challenge. In 2021, an intra-African free trade area came into force. The agreement – called AfCFTA: "African Continental Free Trade Area" – includes all African countries, 55 states, with the exception of Eritrea. This makes AfCFTA the largest free trade area in the world, at least in terms of the number of countries involved. The World Bank has just published a study according to which AfCFTA will increase real incomes in Africa by 8 percent by 2035. The number of people living in extreme poverty is expected to fall by 45 million in the same period.
The effect would be even stronger if AfCFTA were expanded, as planned. Harmonising regulations in the areas of investment, competition, e-commerce and intellectual property rights would stimulate additional growth. Foreign direct investment in Africa could thus increase by an incredible 111 to 159 percent by 2035 through AfCFTA, according to the World Bank study.
Moreover, AfCFTA could lead to a completely new political approach in relation to Europe. If Africa finally speaks with one trade policy voice, it will be much more difficult for the European Union to dismiss demands to dismantle EU protectionism. Especially in the area of industrial processing of agricultural products, this could boost development in Africa.
Trade relations on an equal footing and a fair share in the value chain are, in my opinion, much more effective than many well-intentioned development projects that are only kept alive by subsidies and collapse when the subsidies stop flowing.
The Global Partnership Hub of the Friedrich Naumann Foundation here in Nairobi is to contribute on the question of how development cooperation can be shaped better in the future. Together with IREN, James Shikwati's Inter Region Economic Network, the Hub has already presented a study this year on the competition between Europe and China in Africa. A highly relevant topic. This success can be built upon.
I bid the Hub and the entire team of the Friedrich Naumann Foundation for Freedom much success in their future work. The conditions could hardly be better than in this new office that will become a wonderful place for the exchange of liberal ideas.
This time, the Foundation has come to stay.