The distinctive feature of our relations with Africa is that of mutual equality, given our shared suffering from colonialism and exploitation. We cannot compete with western donor countries or for that matter China in bringing cash to the table. Our strength is in capacity building and skill development. We must leverage that in dealing with African nations
Africa has been growing at a remarkable pace in the last ten years or so, despite persistent volatility across the global economic landscape. In fact, the overall economy of Africa grew by over three times since 2002 with at least 27 countries in the continent having already attained the status of middle income countries. Africa’s total GDP in 2012 was pegged at $1.88 trillion. Of the ten fastest growing economies of the world, 7 are indeed in Africa — all registering around 7 per cent impressive GDP growth rate in 2012.
Growing economic clout
The growing economic strength of the continent has led to greater confidence and intent at the political level on the part of Africa to demand and secure greater involvement in resolving its own problems and disputes. By all accounts, democracy has taken commendable roots and even though the political landscape still remains peppered with festering problems, many of which have, no doubt, been exacerbated by external interference from erstwhile colonial and other powers, the continent presents a steadily improving picture of greater maturity, often unmatched by other regions of the world.
Africa’s abundant mineral wealth, including new oil and gas finds, which is quite significant from the standpoint of consuming nations diversifying their supply sources in the context of ever volatile situation in the West Asia, has been a considerable attraction to the world economies. Improving macroeconomic and business climate coupled with the emergence of growing and stabilising market of nearly a billion people characterised by growing middle class and quickening pace of urbanisation has enhanced this attractiveness even further. According to a World Bank report, 45 of the 46 sub-Saharan economies have improved their regulatory regime for business since 2005. FDI flows have consequently grown at a healthy rate of 5 per cent year-on-year basis to reach $50bn mark in 2012. There is indeed an unprecedented level of competition by the world powers in forging new economic linkages in Africa to leverage efforts for maintaining and augmenting secure supplies of required mineral assets.
Africa fed up with romance with China!
China has considerably enhanced its economic footprints in Africa in the last 15-20 years. Its bilateral trade has grown from $12bn in 2002 to $198bn in 2012, backed by single minded policy pursuit at the government level and a sizeable portfolio of soft lines of credit, often linked to the offtake of precious mineral and energy resources.
However, of late, there has been growing apprehension in Africa at the overwhelming Chinese presence, and the nature of operations of Chinese companies has invited widespread resentment. In an article in the Financial Times on the eve of the BRICS summit in South Africa last year, Governor of Nigerian Central Bank called upon “Africans to wake up to the realities of their romance with China” and to actively “fight off Chinese imports promoted by predatory policies.” Echoing popular sentiments, he noted that economic relations with China carried a whiff of colonialism pointing out that Africa was “willingly opening itself up to a new form of imperialism” comparing it to the advent of British in India “to secure raw materials and markets.” He also lambasted the Chinese companies for importing labour from home, “without transferring skills to local communities.”
India welcome
Under the circumstances, many countries would welcome increased Indian exposure for a “balancing” role. In fact, several governments may have already discreetly approached the Indian government and the corporate India in this regard. Our business entities have followed a model of investment which is based on leveraging local human resources by imparting appropriate skill sets and making them stakeholders in the growth. Our proven and acknowledged track record of forging development partnership in diverse range of sectors and institution building is appreciatively acknowledged.
Our engagement with Africa is historic, underpinned by the presence of a large and vibrant Indian diaspora and our unstinting support for struggle against colonialism and apartheid. Bilateral trade has grown from $5bn in 2001 to $70bn in 2012 and Indian investments in Africa have crossed $50bn mark. Significantly, our export basket comprises mainly of manufactured products and that helps the “Make in India” campaign launched by Prime Minister Narendra Modi. Africa also currently accounts for nearly 18 per cent of India’s crude oil imports and over the past decade Indian national oil companies have made sizeable investments in equity assets in Sudan, libya, Egypt, Nigeria and Mozambique.
Growing strategic stake
Given our growing strategic stake in Africa, we need to pay greater attention to Africa at the political level. We already have close relations with most of the countries but need to further intensify our bilateral engagement and arrange, inter alia, an intensive schedule of high-level visits in order to more effectively reach out to the decision makers. We have sought to supplement this by periodic India Africa Forum Summits to provide us a pan African platform. But over-reliance on this instrumentality and consequent dependence on AU bureaucracy may have come in the way of an effective and timely delivery of our assistance programme. Africa is not as homogenous as most people might think. It is made up of disparate groups, each with its own regional satrap and we ought to invest greater resources in directly connecting with various regional organisations.
Bank on Indian USP
The distinctive feature of our relations with Africa is that of mutual equality, given our shared suffering from colonialism and exploitation. We have been on the same side of the divide. And that is our USP in Africa. Destabilising that equation by convening a “durbar” in Delhi with African leaders in “attendance” may not be in our best interest even though it has become quite fashionable for other world powers to indulge in that style of diplomacy. We cannot compete with western donor countries or for that matter China in bringing cash to the table. Our strength is in capacity building and skill
development. We must leverage that in dealing with African countries rather than build unnecessary expectations for providing financial grants or soft loans, which are unlikely to be paid back.
It is also imperative that the Indian academic community revives its attention to an in-depth study of the evolving political and economic dynamics in Africa and in promoting Track 2 dialogue as well as outreach with a view to exploring new areas of convergence and cooperation between India and Africa. The resultant synergies would benefit the Indian corporate sector and the country at large.
(The writer is a former High Commissioner of India to South Africa)