In the next few days, the India-Africa Forum Summit 2015 will begin in New Delhi. Among top leaders being expected is the toast of the moment, President Muhammadu Buhari. In this piece, YUSUF ALLI x-rays what India is putting on the table for Africa and its effects on the nagging poverty afflicting the continent.
Ahead of the third India-Africa Forum Summit, New Delhi is in a frenzy to host Heads of State and Government from Africa , Indian leaders and world leaders. Though India and Africa share geographical proximity with a fast link through the Horn of Africa, the two had gone through the same destiny in the past decades, including colonialism, apartheid, huge population, poverty and disease. While Africa is often regarded as the “cradle of human civilization, India was a product of a rich ancient civilisation.”
With 54 missions in Africa, the Prime Minister of India, Hon. Narenda Modi, and his crack team will engage delegates from these nations to take stock on the status of their bilateral relations, mileage, weaknesses and the gaps to fill. The biggest “catch” causing excitement for the summit is the confirmation by Egyptian President, President Abdel Fattah el-Sisi, that he would attend the conference. The United Arab Emirates(UAE) and Singapore might also send high-power delegations to the forum. On October 15, the Times of India reported that “the number of leaders attending is now over 50, the largest number of foreign leaders to assemble on Indian soil after the NAM meet in 1983. India had invited all 54 African countries for the summit.”
The star of the forum is likely to be President Muhammadu Buhari (if he accepts the offer) whose integrity and symbolic victory in March 28 Presidential Election has rewritten Nigeria’s electoral process and redefined the nation’s image. Underscoring the importance of the summit, Modi’s common refrain is: “India and Africa share a deep bond of friendship, forged by history, common challenges and a shared journey on the path of progress.”
Why Africa is important to India
Apart from their mutually rich heritage, India and Africa share many things in common which have made them to look like Siamese twins. Blessed with a population of about 1.032 billion in one-fifth of the world’s land mass, Africa is faced with a task of how to manage and provide for its booming baby factory. Its ready-made ally is India which has 1.271billion people to harbour one sixth of the world’s population. Though India is a sub-continent, its story is not different from African continent because they are both ravaged by squalor, poverty, disease, hunger and under-development.
Since the 70s, the two developing sides had been trying to find solutions to their unending problems. With huge investment in human capital and technology, India has gained a considerable advantage over Africa to the extent that it is moving on a fast pace to become a developed economy. In the spirit of brotherhood, India is extending its “CAN DO” spirit to Africa. From being a model of democracy (the largest democracy in the world), India serves as inspiration to Africa and members of the Non-Aligned Movement (NAM) and it is making its beacon for economic prosperity available to needy and willing countries.
Beyond the inspirational factor, many Asian nations, especially India and China, have been scrambling for new markets following industrial revolution on their continent. Like the case with Europe in the 19th and 20th centuries, the Asian tigers are making investment inroads into Africa which has many untapped natural resources and potential. Unlike the Europe, which invaded Africa with crude colonialism, the new Asian powers are seeking the black continent’s cooperation with a “human face and mutual respect.”
India and Africa have been engaging in robust economic ties since the 80s although the relationship blossomed in the 90s. From a mere $1 billion volume of trade in 1995, African Development Bank (ADB) indicated that India-Africa exchange has risen to $36b (2008), $45b (2011); $73b (2013); and about $75 billion in 2014, a meteoric development which made India the fourth largest partner of Africa. Out of the figures, however, the Indian High Commissioner to Nigeria, Amb. Ajjampur Ghanashyam, said recently that the bilateral trade volume between India and Nigeria was at about $16.36 billion. Ghanashyam said: “Nigeria is India’s largest trading partner in Africa and India is Nigeria’s largest trading partner in the world”.
In spite of its economic ‘prosperity’, India needs Africa to survive in some areas, especially energy for its booming industries and high population density. In a survey, the Confederation of Indian Industry (CII), based in South Africa, rated India as the “world’s fifth largest consumer of oil” and might jump to the third place by 2030. Yet, it does not have oil reserves. But it sources 70 per cent of its oil from Saudi Arabia, Iran and others in the Middle East. The striking of many oil wells in Nigeria, Libya, Angola, Ghana, Equatorial Guinea, Côte d’Ivoire, Sudan and South Sudan has made Africa attractive as alternative source of oil and gas. According to Reuters, “India’s African oil imports rose to the highest in more than four years, from 15.5 percent in April to 26 percent in May with tankers mainly from Nigeria and Angola. It also said “the share of Middle Eastern oil to India fell to 54 percent in May from 61 percent in
April, with Saudi Arabia supplying some 732,400 barrels per day.” The report said “Nigeria has replaced Saudi Arabia as the largest crude oil supplier to India after its oil exports to India last month surged by nearly 200 percent, supplying some 745,000 barrels per day.” Since 2006, ONGC-Mittal (an Indian company) had promised to invest $6 billion in a refinery, a power plant and a railway line in Nigeria. Besides importing coal from South Africa, an Indian firm, Cairn India, acquired a 60 percent in¬terest in a gas discovery block on the South African West coast.
An international consulting firm, Mckinsey predicted that Indian pharmaceutical industry “sees good prospects for growth in Africa, with the sector having quintupled in size in terms of value in just over a decade. In its report, Mckinsey projected that the continent’s pharmaceutical market would grow from $40 billion to $65 billion by 2020. It added: “That growth is continuing at a rapid pace: we predict the market will be worth $40 billion to $65 billion by 2020.”
Another different report said: “Africa is an equally important source for India of precious metals and gemstones, especially gold and diamonds. India is the world’s major jewellery maker – in 2008- 09, the gems and jewellery sector constituted 13 percent of India’s total exports. Furthermore, India is the world’s leading processor of diamonds, accounting for 85 percent in terms of volume on the total world market. Gold in particular defines India’s economic relations with South Africa, the latter being the world’s leading supplier of gold.”
Africa’s potential gains from India
India and other world powers have assisted Africa to stabilize its democracy in the last 15 years. But Africa is already looking beyond enthronement of democracy, it is rabidly after economic dividends of democracy. The President of South Africa, Jacob Zuma, captured the mood of the continent when he said: “However, the benefits of democracy must lead to economic development and help reduce poverty – to improve the quality of life of ordinary people. You can’t eat democracy.” Africa is capitalizing on India’s liberal trade terms and investment opportunities to boost its economy. Although in the 80s, Indian teachers were in many African countries to help in educational growth, the relationship is assuming a fair and equitable dimension.
About 16 per cent of Indian imports come from Africa. They include the following products: petroleum, metallurgical goods, raw cotton, fruit, vegetables and preparations, chemicals, non-metallic mineral manufactures, precious stones, textile yarn, gold, nickel, and Ferro-alloys. India’s exports to African countries include machinery and transport equipment, petroleum products, paper and wood products, textiles, iron and steel, plastic and linoleum products, rubber manufactured products, agro-products, chemicals and pharmaceutical products.
Mutual investment opportunities are in such sectors like tourism, pharmaceuticals, electronics, computer software and accessories, information technology related products, financial services and textiles. India’s investment portfolio in Africa was said to be over $35billion.
A report by The Financial Express in September, said: “Africa is estimated to have 130 billion barrels of oil reserves and 500tcf of gas reserves. The total comes to a little more than 7.5% of global reserves. Major suppliers to India are Nigeria, Algeria, Angola, Mozambique, Sudan and South Sudan, Egypt and Libya. It said India is expected to import $125billion crude oil and products this year.
“Virtually every African country has an investment pact with India with South Africa, Mauritius having a swell of time. In Niger and Namibia, India is exploring uranium mining opportunities in these nations. The Indian State of Andhra Pradesh struck a deal with Kenya and Uganda to send 500 farmers to cultivate land in these East African countries. The agreement covers the tilling of 50,000 acres (20,234 hectares) of land in Kenya and 20,000 acres (8,000 hectares) in Uganda. Over $5billion financial assistance has been given to African countries under an Export-Import Scheme called “Focus Africa.”
Setting agenda for India-Africa Forum Summit
A product of South-South Cooperation, the India-Africa Forum Summit (since 2008) seeks to open new economic frontiers between India and Africa. The Indian Minister of External Affairs, Ms Sushma Suwaraj, has already set the tone for the summit. She said: “Our direct engagement will provide direction to India and Africa to face the challenges of shaping a more equitable world order.”
The Secretariat of the summit gives a summary of what to expect in a preview. It isolated the issues to be addressed as follows: challenges of globalization; terrorism; climate change; poverty; illiteracy; hunger; disease; and how to shape the future.
It says: “The India-Africa Forum Summit (IAFS) is a celebration of the close partnership between Africa and India. It is an acknowledgement of our shared history as well as our future prospects. From our struggle against colonialism and apartheid, we have emerged to jointly accept the challenges of a globalizing world.
“Even as we combat with common threats – the threat from international terrorism; the scourge of poverty, disease, illiteracy and hunger; the challenge of climate change – and collectively promote the socio-economic advancement of all our people, we believe that India and Africa traverse the same path, share the same values and cherish the same dreams.
“A vibrant India and a resurgent Africa have a vision of a close partnership. A partnership that is anchored in the principles of equality, mutual respect and mutual benefit. This vision takes us beyond our strong bilateral relationships, our close ties with regional economic communities and aims to develop a new paradigm of cooperation which takes into account Africa’s own aspirations for pan-African institutions and development programmes.
“The third edition of the four-day IAFS summit, which will take place from 26th-29th October 2015 enables consultations at the highest political level between the heads of government of 54 nations across Africa and the Indian government to give a new thrust to our age-old partnership. It provides an opportunity to not only reflect on the past, but to define the road ahead in tune with the times we live in.”
Expectations from the summit
Some of the expectations of the summit include increasing the trade volume between India and Africa; exploring more investment opportunities; how Africa can benefit from India’s ICT enormous potential; learning from Indian healthcare service which has earned it much from medical tourism; anti-corruption drive or policy and how to promote knowledge-based economy in Africa through functional and quality education. Above all, Africa must take away from the summit, India’s magic wand behind the generation of 350,000 megawatts of electricity within 15 years and the secret of small and medium industries.
The Editor-In-Chief of India Writes, Manish Chand( India and Africa: Sharing interlinked dreams) has predicted what both sides may gain from the summit. He said: “Africa has decisively shed the stereotype of a ‘Hopeless Continent’ and become a ‘Cape of Good Hope,’ with six of the world’s fastest-growing economies located in Sub-Saharan Africa and more than 30 African countries becoming functioning democracies. Add to this potent mix, the demographic dividend, shared by both India and Africa, with the bulk of their population in the age group 19-35. The emergence of a new generation of quality-conscious middle class consumers has enhanced the attractiveness quotient of both Africa and India. What it all adds up to is that new doors are set to be opened for up scaling bilateral trade and investment, adding to economic muscle of both sides. The India-Africa trade is estimated to be around $70 billion, and if the current optimistic trends are anything to go by, the two sides should be able to ramp up their bilateral trade to $100 billion in the next 2-3 years.
”This economic resurgence will be also reflected in other areas of engagement. Since the two sides launched an ambitious and multi-layered summit process in the summer of 2008, India has pledged over $8.5 billion in Lines of Credit for a wide array of development projects across the emerging continent. Over 65 per cent of this soft loan package has already been disbursed. Going by past record, the new Indian government is expected to announce an ambitious multi-billion dollar developmental package at the New Delhi summit in 2015. In a signature initiative, India is also in the process of delivering on its promise of setting up over 100 training institutes in different African countries, encompassing a wide array of areas ranging from agriculture, rural development and food processing to information technology, vocational training, English language centres, and entrepreneurial development institutes. Trade, Technology and Training remains the enduring
tripod that frames the multifarious India-Africa relations and will remain so in the months to come.”
Will African leaders rise to the occasion?
Beyond the klieg lights, the ball is in the court of African leaders to seize the opportunity of the third summit to learn, negotiate, promote trade, and explore the large size of the economy of India to change the fortunes of the continent. So far, India has not shown any sign of neo-colonialism, Therefore, African leaders must seek equity with open hands at the summit.
