India in Africa

20 May

International interest in African states as investment destinations and political allies is growing fast. Although China grabs the headlines, India‘s re-engagement in Africa is also expanding as evidenced by the second India – Africa Forum on 24-25 May in Addis Ababa.

Bilateral India-Africa trade has grown from approximately $ 1 billion in 2001, to around $ 50 billion in 2010. India’s Commerce and Industry Minister, Anand Sharma, hopes it will reach $ 70 billion by 2012. Following the first Africa-India Forum Summit in New Delhi in 2008, the second India-Africa Forum is intended to build on that growth, themed as ‘enhancing partnership: shared vision’, and includes agriculture, trade, security, communication and governance. It will be preceded by a meeting of foreign ministers and trade seminars and an India-Africa Media Symposium.

16 heads of state and government representing the founders of The New Partnership for Africa’s Development, the Regional and Economic Communities and the chair of the African Union (AU) will attend the summit with Indian Prime Minister Manmohan Singh. With an eye on enhancing trade, special invitations have gone to a few beyond this group, such as the former AU chair, Malawi, and Egypt. We should not expect to hear much about governance as the President of Equatorial Guinea is this year’s AU chair and Libya and Swaziland are invited – all countries with significant governance and human rights problems. The first summit received little attention in India, and domestic press coverage was minimal. In an attempt to increase this year’s summits’ profile in India, Indiapost will issue a commemorative postage stamp on 25 May.

Looking ahead, New Delhi will continue to focus on building capacity and developing existing projects in Africa, such as the India Africa Institute of Foreign Trade in Uganda, the India-Africa Institute of Information Technology in Ghana, the India Africa Diamond Institute in Botswana, and the India-Africa Institute of Education, Planning and Administration in Burundi.

Energy, particularly oil, coal and uranium, will remain at the forefront of India’s strategy in Africa. Indian imported 12% of its crude oil from Nigeria in 2010. The International Energy Agency predicts that by 2025, the Indian growth trajectory will make it necessary for the country to import 90% of its petroleum supply. India has increasingly looked to Africa in order to diversify its energy sources, and in this way to reduce its dependency on the Middle East, which accounts for two-thirds of its imports.

India has found head-on competition with China for oil equity frustrating, lacking Beijing’s deep pockets, but Delhi offers African leaders an attractive opportunity to further diversify their trade and diplomatic relations. Indian firms and expertise have made impressive contributions to agricultural extension in Senegal and commercial farming in Ethiopia. However, there have been controversial mistakes, such as the Indian built Golden Jubilee House in Ghana, funded by concessionary loans and intended to be the new presidential complex. Completed in late 2008, shortly before elections in Ghana, and at a cost of $ 50 million, the new government of President Atta Mills has refused to move in. The controversy highlights the political risks for India of offering concessionary loans for such high profile projects. It may be indicative of insufficient Indian oversight of some aspects of India’s engagements in Africa.

In the four years since the first India-Africa Forum summit, Indian trade and investment in Africa have significantly increased. This push by the Indian private sector is helping the Indian government to define what India’s strategic vision in Africa is and make it distinctive. The India-Africa Forum is part of that process. Yet the Indian government’s capacity to manage growing engagement in Africa remains patchy and investment in diplomacy will be required if it is to avoid the reputation risks that are growing alongside business engagements.

Friday 20 May 2011
by Alex Vines, OBE, Research Director, Regional and Security Studies; and Head, Africa Programme

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  1. India, China and Africa | ikners.com - May 23, 2011

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