Nelson Mandela, South Africa’s first democratically elected President had once said that “the freedoms which democracy brings will remain empty shells if they are not accompanied by real and tangible improvements in the material lives of the millions of ordinary citizens.” Today, Africa is living up to Mandela’s vision of a better life in a way that has the world sit up and take notice. The ten fastest growing economies in Africa increased their national income by 5-8.5% in 2016, 18 countries have achieved medium to high human development status reflecting improved health, education and overall living standards. A young and growing workforce expected to touch 1.1 billion by 2034 is key to a demographic dividend that will boost Africa’s growth and prosperity.
This is truly Africa’s transformative moment and one of the best things is the catalytic role that India has played in this makeover through a sustained development partnership—to a great extent with the African Development Bank (AfDB). The India-Africa economic engagement has witnessed a dramatic widening of scope with duty-free access to Indian markets—barring very few exceptions—for all the Least Developed Countries of Africa and commitment of a $10 billion line of credit by prime minister Narendra Modi, signalling a more constructive approach towards African countries. It is, therefore, appropriate that the annual summit of the AfDB—in a break from precedents—is happening in India.
The business dynamics get a punch with an exposition featuring relevant technologies of Indian companies and affordable and adaptable innovations in vital sectors like energy, agriculture, healthcare and ICT organised by FICCI. The atmospherics aside, the AfDB summit is important for two reasons. First, both the Indian and African economies are at an inflection point and are displaying a collective strength that can work miracles for their future. India’s economy post-demonetisation is projected by IMF to touch 7.7% GDP growth in 2018-19—powered by bold tax reforms, measures on ease of doing business, robust FDI flows and opening up of vital sectors like defence and pharma to100% foreign equity. Africa, a $2.2 trillion market offers a great market potential with hikes in infrastructure investments, improved transportation systems, manufacturing output and efforts to integrate African stock exchanges.
These dynamics, if matched well, can expand bilateral commerce which stands at Africa contributing nearly 10% of India’s global exports and nearly one-fifth of Indian overseas investments during April 1996 to March 2016.
Second, the AfDB meet is in sync with India’s recognition as an important source of investment for projects in Africa—across sectors such as pharmaceuticals, IT and telecommunications, engineering, education, health. Indian industry, led by FICCI, has established strong footprints in Africa through initiatives like ‘Namaskar Africa’, a flagship programme showcasing Indian strengths across diverse sectors to facilitate Africa’s move towards a more open–market economy.
Also important, and in the context of time, an Indo-Japan partnership for African development is taking shape that can build up a strong trilateral framework for a highly diversified economic engagement in the continent. What this means is huge avenues of collaboration between the private sectors in India, Japan and Africa for specific joint projects in training and capacity building, health and infrastructure and a proposed “Asia-Africa Growth Corridor” to connect India and Africa through port development and linkages to the Delhi-Mumbai Industrial Corridor.
If we harness all this potential, Africa will be unstoppable and so will be the economic engagement with India. The AfDB has put in place a set of ambitious “High 5s” priorities—energy, agriculture, industrialisation, e-governance and healthcare and pharma— that can unleash the real potential of India-Africa cooperation. With Africa looking at the transformation of agriculture into a business for creating wealth, Indian successes in agro-business initiatives, low capital-intensive farming and in farm mechanisation can be an asset in driving greater productivity in African agriculture.
The big opportunity is access to electricity. The AfDB is leading an “off-grid renewable energy revolution” in Africa backed by a $500 million Fund for Energy Inclusion to provide affordable finance for companies investing in renewable energy. India can match its plans to install 100 gigawatts (GW) of solar power out of a total renewable-energy target of 175 GW by 2022 with investments in solar and other renewable energy projects. India has taken a lead in establishing an International Solar Alliance, which is a great platform to build mutual cooperation in energy. India with its demonstrated technological advances can push African businesses’ up the global supply chain as manufacturing output in the continent rises from current $500 billion to a projected $930 billion in 2025, according to the Exim Bank of India.
Potential sectors include wholesale and retail, food and agro-processing, light manufacturing, and construction. Innovation and R&D are passports to industrial successes and here the India-Rwanda Innovation Growth Programme spearheaded by FICCI is of immense value. The FICCI initiative to match Rwandan private and public enterprises with leading edge Indian technologies and innovations is aimed at commercialisation of ‘Made in India’ technologies and innovations and generation of skill and entrepreneurship development, and is a successful template to be replicated in Africa as a whole.
Healthcare is a burgeoning opportunity in Africa where prescription drugs, generics and over-the-counter medicines and medical devices are expected to show significant growth, opening up enormous possibilities for the advanced technologies that are being developed by Indian companies and greener pastures for their growth.
The digital economy is the future and India is the natural go-to partner in bridging Africa’s quest for efficient governance through adoption of digital technologies that are reaching traction courtesy the ‘Digital India’ movement. Partnership with Africa in this area has a bright future as penetration of smartphones in Africa is about to reach more than 50% in 2020, from only 2% in 2010. Our engagement with Africa has a strong human development content and industry is keen to share in the AfDB’s mandate to build skills through technical and vocational training in potential sectors like agriculture, food processing, textile and small industries.
Source:FE
