A plan for partnership

Print edition : July 11, 2014

A mine worker at a copper mine near Lubumbashi in the Democratic Republic of Congo. Mining is one of the high-growth areas. Photo: NAASHON ZALK/BLOOMBERG NEWS

Prime Minister Manmohan Singh and African leaders at the 2nd Africa-India Forum Summit in Addis Ababa, Ethiopia, on May 24, 2011. Photo: AP/Xinhua

Ways in which India can contribute to and benefit from Africa’s economic and political resurgence.

Africa is going through a period of resurgence in terms of its economy, regional integration and increasing role on the world stage. But its track record in the political domain—in areas like democracy, security, governance, ethnic harmony and institution-building—continues to be a mixed one as negative stories of atrocities by Nigeria’s Boko Haram and violence in countries such as Mali, Libya and the Central African Republic crowd out positive reports from other countries.

Africa looks up to India as a successful democracy, an exemplary development model and a vibrant economy, with a vast potential to assist it in its rise. This perception, sustained by a collective memory of India’s past contribution to the struggle against colonialism and apartheid, exploitation and injustice, has helped India-Africa ties to blossom into a multidimensional partnership, especially since 2008, when the first India-Africa Forum Summit (IAFS) was held in New Delhi. The second summit, held in Addis Ababa in 2011, deepened the process further.

African Complaints

Given this backdrop, some of India’s top Africa experts were surprised when they heard presentations by a number of senior African diplomats at a recent brainstorming meeting, hosted by the Indian Council of World Affairs (ICWA) at Sapru House, New Delhi. Among several complaints hurled at India by these diplomats, one related to the absence of any reference to Africa in President Pranab Mukherjee’s address to Parliament on June 9. Indian scholars took pains to explain that the speech was essentially about the government’s national programmes and priorities rather than a detailed survey of foreign affairs. India’s Africa policy not only will remain consistent but may even get stronger in the future in terms of focus and momentum.

Another complaint from the African side was about the delay in finalising the dates for the third edition of the IAFS. Our scholars were quick to assure our African friends that India was fully committed to hosting the summit in 2014. Mention was made of the statement by Navtej Sarna, Special Secretary in the Ministry of External Affairs, at the 17th Ministerial Conference of the Non-Aligned Movement in Algiers on May 29, wherein he had expressed categorically that the summit would take place “later this year”. Depicting India-Africa relationship as “unique”, he had stressed that India looked forward to “partnering with Africa in the new growth story that is emerging from the continent”.

Previous Summits

In the past decade, cooperation in political, economic and other areas has shown substantive strides. This process began with the new initiatives launched by India, such as “Focus: Africa Programme” (2002) and “TEAM-9” project (2004), to strengthen trade relations, and the Pan-African e-Network (2007) to expand development cooperation through a $125 million grant for tele-medicine and tele-education projects. The CII-Exim Bank Conclave on India-Africa Project Partnership, organised every year since 2005, has emerged as the principal platform for business-to-business interaction.

Against this backdrop, and having noted what other Asian powers such as Japan and China have done to connect with Africa, India too embarked on the path of summit diplomacy through the two summits held in 2008 and 2011. But, unlike the African summits with Japan and China, India’s summits had only limited, though representative, participation from Africa, determined by the African Union’s (A.U.) “Banjul Formula”. Nevertheless, the summit deliberations and outcomes had a Pan-African relevance as mutually agreed upon cooperation programmes were applicable to all the 54 member countries of the A.U.

The fundamental agreement at the two summits was that Africa and India would assist each other in pursuing their political goals, including reform of global governance, sustainable development, fair deal at the World Trade Organisation (WTO), and South-South cooperation. Further, they would work together to deepen their economic cooperation. A Framework of Action was crafted in 2008, which was further refined in 2011. The plan identified seven specific areas of cooperation, ranging from agriculture to energy, capacity building and information technology. India announced a special duty-free scheme to help Africa’s less-developed countries (LDCs) expand their access to the Indian market. India’s developmental assistance was increased significantly. At the 2008 summit, India pledged a sum of $5.4 billion for new lines of credit (LOC) and $700 million for human resource development. At the 2011 summit, it was $5 billion for LOC, $500 million for training institutions and programmes, and $300 million for the Ethiopia-Djibouti railway line. Moreover, the 2008 commitment by India to establish 19 training institutions was raised dramatically in 2011 to a package of over 100 institutions.

India’s dialogue at a new level, that is, with senior officials of the Regional Economic Communities, was started in 2010. The next round, scheduled for August in New Delhi, should enable both sides to undertake pre-summit evaluation of the implementation of past commitments. Although official information is unavailable, it is estimated that the sum allocated for LOC-aided projects in Africa following summit decisions is $8.5 billion. Of this, nearly 65 per cent has already been disbursed. The funds set aside for training programmes have been utilised fully. However, progress in establishing new training institutions has been inadequate due to various shortcomings on both sides. At the Sapru House meeting, a prominent African diplomat suggested that Prime Minister Narendra Modi’s triple mantra of “skill, scale and speed” should be applied to the implementation of the agreements.

Trade and Investment

A vital pillar of economic cooperation is trade and investment, which has increased significantly in the past decade. Two-way trade reached $70 billion in 2013, with India’s exports touching $27 billion and imports $43 billion. The present trade flow is high, but it is far smaller than China-Africa trade, which stood at $211 billion in 2013. Experts point out that the comparison is unfair because, after all, the Chinese economy is at least four times bigger than the Indian economy.

In the field of investment, however, India’s foreign direct investment (FDI) flow into Africa was $64 billion for the period 2003-12, while FDI from China stood at $51 billion. (The McKinsey Asia Centre report, however, concedes that the actual size of the Chinese portfolio may be larger than this figure.) Duty-free access, support through lines of credit, and active trade promotion programmes have made a valuable contribution to the growth of India’s trade and investment. If this mix could be reviewed and improved further, there could be more growth in future.

As Africa’s economy is likely to grow at an annual rate of 5 per cent in the next 12 years (that is, higher than 4.7 per cent, the growth rate during 2000-13), McKinsey estimates that both trade and investment sectors can see impressive expansion. Two points are noteworthy here. First, India Inc. should note that the five sectors that have received the highest share of FDI in Africa are energy and mining, hotels and tourism, communication, manufacturing, and software and IT services. Second, the eight African countries that may account for 70 per cent of Africa’s GDP growth in 2013-25 are Nigeria, South Africa, Egypt, Libya, Algeria, Angola, Morocco and Ethiopia. This is not a plea for ignoring other countries but only to emphasise that these major markets will require a stronger push and a coordinated plan by the government and the national chambers.

Ideas for Future

The interaction between African diplomats and Indian scholars led to a number of constructive ideas on how to strengthen the partnership further. A consensus view was that the A.U. should drop the “Banjul Formula” to determine its representation at future summits with India. Instead, it was suggested that all member states should attend future summits. This is a call for the A.U. to take. Second, implementation of summit decisions must improve significantly through sustained joint endeavours. Neither side can afford the present situation of “over promise and under delivery”.

Third, the time is ripe to enrol other actors—civil society, media, academic-strategic community, youth and women’s groups—in order to strengthen people-to-people relations, because without this facet getting stronger, governments and business communities may not be able to achieve their goals. A suggestion was made to set up an “India-Africa Centre” to help expand commercial, cultural and educational cooperation. In this context, mention was made, with appreciation, of the ICWA’s success in organising eight international conferences, four in Africa and four in Indian cities, in the past three years. These have widened awareness about the potential and stakes involved in this vital relationship. Fourth, the need for India’s top leaders to visit Africa for raising visibility and showcasing commitment to Africa was particularly stressed.

Fifth, the participants recognised an essential requirement, that is, the need to improve communication between governments. A diplomat from a small African country related the story of how his President was keen to visit India. The diplomat’s four letters to the Indian authorities, it was claimed, evoked no response. When the President called the diplomat and asked him: “Are you still working in New Delhi?” he had nothing to say. Clearly, more should be done to engage African diplomats based in India. Finally, they too should step up their public diplomacy in order to connect better with a more self-confident and resurgent India. “It needs two to tango,” remarked an Indian participant.

A former High Commissioner to South Africa and Kenya, Rajiv Bhatia is the Director General of ICWA. The article reflects his personal views.

This article is closed for comments.
Please Email the Editor