* Germany slow to invest in region outside S.Africa, Nigeria, Algeria
* Now scrambling to catch up with China, France and other rivals
* World's 2nd-biggest exporter eyes growing African consumer markets
* Africa hopes arrival of Germans will help develop local industry
By Stephen Brown
BERLIN, May 28 German industry's representative in Angola, Ricardo Gerigk, has a tough job drumming up business in Luanda, the costliest city in the world for expats, where contracts tend to go to firms from China, Portugal and other countries with a bigger presence.
Although Angola has dynamic growth and a wealth of resources including oil, gas, rare earths and diamonds, only about 15 German companies have taken what Gerigk calls the "leap of faith" to set up business there. "None of them have any regrets," he adds.
The world's second-biggest exporter has woken up late to the potential of Africa's fast-growing economies and is scrambling to catch up - not just with an aggressive China and France, in its West African sphere of influence, but also smaller European rivals such as Spain and Italy. Emerging powers India, South Korea and Brazil have also been quicker to spot opportunities.
German trade with Africa totalled $60 billion last year, while China managed $200 billion. Beijing wants to double that figure by 2020 and has sent its president and premier to the region to sign infrastructure and credit deals.
German firms do only 2 percent of their overseas business on the continent of 1.1 billion people. Of the 9 billion euros of German investments there, 8 billion are concentrated in South Africa and on energy deals in Algeria and Nigeria.
Africa makes up only 2 percent of German new car exports, according to the auto industry body VDA, which says the market is "still in its infancy". Again, South Africa accounts for almost 60 percent of sales, though its economy has weakened.
"Germans still find the continent challenging and perhaps overwhelming to deal with," says Vera Songwe, an economist at the World Bank and country director for West Africa.
At the consultancy African Development Solutions (Adesol) in Berlin, Saschsa Meyer says the attitude so far has been: "South Africa and Nigeria are where the money is, but where is Ivory Coast? Where is Togo? They are just blank spots on the map."
Now German companies, from industrial giants to start-ups, are overcoming their caution, keen to profit from the combination of rich resources and economic growth. The OECD estimates that growth in sub-Saharan Africa will total 5.8 percent this year.
"Mittelstand firms are now starting to look at Africa," said Meyer, seeing special potential in the burgeoning African middle classes, who "don't need a third Porsche" but goods and services like "decent middle-class housing, modified for African needs".
Africa's population is growing at twice the world rate, while Europe's is stagnating. German exports to Europe, the market for nearly 60 percent of its shipments, grew 0.1 percent in 2013, but the dynamic African market, surpassed only by Southeast Asia, is expected to take 5 percent more German exports this year.
This has prompted Europe's biggest economy to review what experts say remains basically a "donor-recipient" relationship.
With the foreign ministry drawing up new African policy guidelines, the armed forces playing a bigger role in French-led missions and industry bodies urging members to venture into new territory, Germany is jostling for its "place in the sun", a phrase coined by statesman Bernhard von Buelow in 1897.
The Berlin Conference of 1884 launched the first "Scramble for Africa", and Kaiser Wilhelm's "Weltpolitik" began a colonial experiment that led to the genocide of the Hereros in South West Africa - now Namibia - and ended with defeat in World War One.
Even so, it has relatively little colonial baggage compared with some other European countries, which could be an advantage in a region often sceptical about post-colonial powers and asset-stripping, as Chancellor Angela Merkel looks for a geo-political role to match German economic might.
Denying any interest in "Germanising" a continent that has seen too much outside interference, Merkel said in a podcast at the end of March - ahead of an EU-African summit - that Germany could play a useful role as an "honest broker" in the region.
Alex Vines, head of the Africa Programme at Chatham House, said Germany, like all foreign powers, wanted to get its hands on uranium from Niger and Namibia, cobalt from the Democratic Republic of Congo, chromium, manganese and platinum from South Africa and oil and gas from Nigeria, Angola and Algeria.
"But there is growing awareness of another narrative - the emerging African middle class, rising consumerism and growth of 6-7 percent - which Germany shouldn't miss out on," said Vines.
One German firm that has been quick to spot this trend is Rocket Internet, which with Sweden-listed Millicom and South Africa's MTN has launched ventures in Africa such as e-commerce outfit Jumia and delivery service Hellofood.
"There is a huge middle class and very little on offer for them. Even in Lagos there are only a few shopping malls, and you spend lots of time in traffic," said Sacha Poignonnec, co-CEO of Rocket and partners' Africa Internet Holding.
Muhereza Kyamutetera, a 34-year-old advertising executive in Kampala, said that instead of spending lunch finding a parking space and a restaurant, with Hellofood "you spend a few minutes on your computer and, bang, food finds you on your desk".
Germany's traditional industrial exports were facing tough competition from China, Kyamutetera said, but they could find a niche in what he called "offbeat areas" like this.
The hope is that Germany's late arrival will not just boost its own exports but signal that Africa's economy can "move up the value chain to do some industrialisation", said Songwe.
"More than 60 percent of the population of Africa live in the dark, so there are huge opportunities in energy, not just solar but hydro and other forms of renewables," she said from Dakar. "That is a market the Germans can competitively get into and benefit both German and African businesses."
Engineering giant Siemens, which first entered the African market in 1857, sees a demographic "tipping point" in 2035, when more than half the population will live in cities. This will boost demand for energy, water, transportation and healthcare, sectors where Siemens is already well positioned.
"Africa's rising consumption will create more demand for local products, sparking a cycle of increasing domestic growth," said Sabine Dall'Omo, chief financial officer of Siemens South Africa, adding that Siemens's technology could help "make Africa's manufacturing sector globally competitive".
In this context, the Germans' proverbial caution is seen as a guarantee of the commitment needed to develop local industry.
"Germans are very cautious and take lots of time to plan. Our country is in a different situation and we need solutions now, now, now. It's a problem, when you work with the Germans," said South Africa's ambassador to Berlin, Makhenkesi Stofile.
"But when they have done their planning and decided on an investment, then they come to stay," said Stofile, a former government minister. "They are no 'hello-goodbye' investors."
Ulrich Plantikow, whose company WME is finalising a deal for a solar-powered desalination plant in Senegal providing drinking water - and as a byproduct another scarce commodity, salt - said it is actually the foreign investors who need the patience.
"It is slower and more bureaucratic than in Europe or maybe Germany. You have to wait for decisions not for a month but for maybe six months," said Plantikow.
In Angola, which ranks 179th out of 189 on an International Finance Corporation/World Bank "Ease of Doing Business" index, German industry rep Gerigk said the red tape requires "a pioneer spirit and determination". But the rewards can be considerable.
Krones, the world's biggest manufacturer of bottling and packaging machinery based in Bavaria, has operated in Angola for about seven years and already has 90 percent of the market for equipment producing soft drinks, beer and water.
Marcello Pulcini, its general manager in Angola, said at the Krones office in a Luanda suburb there was still "much potential for growth", though he cautioned potential newcomers about the bureaucracy, untrained workforce and "old habit" of corruption.
Such challenges - and news of violence like the Islamist insurgencies of Boko Haram in northern Nigeria and al Shabaab in east Africa - make it a daunting place for companies lacking the global clout of a Siemens or Krones. Business lobbies urge the government to offer safeguards and export credit guarantees.
"We need a sign from the government," said Reinhold Festge of the German engineering association VDMA.
There is a clear difference between Beijing and Berlin when it comes to trade diplomacy. Senegal's Macky Sall, visiting the Chinese capital in February, was showered with promises of help in infrastructure and industry and imports of Senegalese farm goods. In Berlin a month later, Merkel lectured him about graft and complained that German exports to Senegal were "negligible".
The Senegalese president responded that Germany or France would be great partners for infrastructure projects but China gave better credit facilities. "That is the only difference".
Vera Songwe said a Merkel visit would be a "strong signal". Her last trip to the region was in 2011, while China's president and premier have both visited Africa in the past 14 months, and Francois Hollande of France is a frequent visitor.
Germany still has a residue of goodwill dating from the Cold War in countries like Angola, which used to send students to communist East Germany. Some of these people have since risen to the top of the local political and business elite.
"But that will all have changed in five to 10 years' time," warned German business envoy Gerigk. "Then we will have to learn Mandarin to talk to the decision-makers in Angola." (Additional reporting by Sabine Siebold and Rene Wagner in Berlin, Shrikesh Laxmidas in Luanda, Elias Biryabarema in Kampala and Loucoumane Coulibaly in Abidjan; Writing by Stephen Brown; Editing by Noah Barkin, Pascal Fletcher and Will Waterman)