The idea is to team up African nations willing to reform with private investors who would bring business and jobs to a continent where instability or graft often scare off foreign companies.
Merkel is hosting the initiative as part of Germany's presidency of the Group of 20 powerful economies, whose leaders meet in the northern port of Hamburg a month later.
Invited to Berlin are Egyptian President Abdel Fattah al-Sisi and the leaders of Ghana, Ivory Coast, Mali, Niger, Rwanda, Senegal and Tunisia.
Germany, Europe's largest economy, has taken in more than one million asylum seekers since 2015 -- more than half from war-torn Syria, Iraq and Afghanistan, but also many thousands from Ethiopia, Nigeria and elsewhere in Africa.
More From This Section
Hundreds of thousands more have trekked through the Sahara into lawless Libya, hoping that traffickers there will take them in rickety boats across the Mediterranean Sea to Europe.
Those who can't pay the thousands of dollars demanded by the people smugglers are often held in squalid militia- controlled facilities, which German diplomats have likened to "concentration camps".
"The well-being of Africa is in Germany's interest" Merkel said at the time.
Critics have dismissed the latest multilateral Africa initiative as a half-hearted effort without any aid commitment, but organisers say it could help boost prosperity and reduce the mass flight and brain drain, especially of young people.
Under the G20 "compacts" plan, an initial seven African nations will pledge reforms to attract more private sector investment.
Germany will team up with Ghana, Ivory Coast and Tunisia, while other G20 members will support efforts by Ethiopia, Morocco, Rwanda and Senegal.
More than 100 banks, companies and other potential investors are expected at the conference.
"This is not about hand-outs or just money or cheap money, but about the opportunity to attract investment, profits and jobs," said a German finance ministry official.
Non-government groups have criticised that the G20 club -- whose only member on the continent is South Africa -- is offering no financial commitments of its own, and that international trade often hurts African farmers and producers.
The NGO One argued that it does little more than "reiterate existing plans" and remains "insufficient, short- sighted and one-dimensional".
With Africa's population expected to double by mid- century, it said that "the G20 is not yet ready to face the demographic explosion that Africa will experience in the years to come.