India must give its African outreach a new lease of life
AFRICA is being wooed by many nations. China has been remarkably consistent with its three-yearly summits; the ninth edition of the Forum on China-Africa Cooperation was held from September 4 to 6 in Beijing. Over the past two years, leaders of 54 African nations have been hosted by US President Joe Biden, his Russian counterpart Vladimir Putin and Italian PM Giorgia Meloni.
China’s loan-giving spree has waned from $28.4 billion in 2016 to $1 billion in 2022 due to a slowdown in economic growth and its desire for a more sustainable development model, a shift away from direct infrastructure financing towards trade credit for regional exports, with the African Continental Free Trade Agreement offering businesses access to a larger unified African market.
African economies have benefited from China’s unprecedented growth, but they must now adapt to a deceleration of export volumes, investments and loans. According to the International Monetary Fund (IMF), every
1 percentage point decline in China’s real GDP growth rate leads to about 0.25 percentage point decline in Sub Sahara Africa’s total GDP growth within a year. Despite oil prices being high since 2021, China, the US and Europe are buying less crude oil from Africa, resulting in lesser earnings and a significantly heavier debt burden — on average, about 85 per cent of the GDP. This severely impacts the ability to close the $400-billion financing gap that, according to the African Development Bank, the continent needs to meet the Sustainable Development Goals and achieve a just energy transition, especially for the poorer countries.
As China adjusts its approach to Africa to less costly commitments, the interest of several nations, including Russia, India, the UAE, Turkey and Brazil, has increased. What keeps the spotlight on Africa, despite the conflicts in Gaza and Ukraine, is its growing population, high concentration of critical minerals and 54 votes at the UN. Africa has emerged as one of world’s fastest growing regions with an estimated $6.7-billion spending. Africa continues to have a seat at many high tables, and countries find it advantageous to negotiate with all African nations at once. This ‘diplomatic polycentricity’ presents opportunities while raising several questions.
World Bank figures show that Africa has not significantly moved beyond primary production, and manufacturing has declined as a percentage of the GDP in sub-Sahara Africa. Most African countries are locked in a colonial-style trading relationship as exporters of raw materials and importers of finished goods. They may not have deepened their trading relations but have certainly broadened them which, nevertheless, carries the risk of borrowing too much with resultant defaults in payments. The IMF estimates that 25 African countries are on the verge of debt distress. Kenya’s efforts to repay debt by overtaxing people backfired as massive street protests forced it to roll back its decision.
Where does all this place India? Since 2008, when India substantially upgraded its traditional relations by holding the first India-Africa Forum Summit, the policy has been to help Africa help itself. The focus areas have been capacity-building, skill development, trade and investment, agriculture, energy, blue and ocean economy, infrastructure, education, health, peace and security, and cooperation in multilateral fora.
India is Africa’s third largest trading partner with $85 billion in trade and $75 billion in investments. India also provides capacity-building in line with AU priorities such as ‘Educate an African Fit for the 21st Century’. The opening of the IIT-Madras’ Tanzania campus and the Indian National Forensic Sciences University’s Uganda campus are recent examples. India’s help to bridge the digital divide in Africa with tele-education and tele-medicine services is valued. During the Covid-19 pandemic, India aided Africa with medical supplies and equipment.
The defence dialogue with Africa has re-emphasised the Indo-Pacific continuum. The Indian Ocean littoral states of Africa are crucial to the monitoring and protection of sea lanes. The AU vision of peace and security coincides with India’s vision of SAGAR (Security and Growth for All in the Region). We extend e-visa facilities to 33 African countries.
Africa also stands to benefit from India’s three significant multilateral initiatives: the International Solar Alliance, the Global Biofuel Alliance and the Coalition for Disaster Resilient Infrastructure. India and Africa have made effective contributions to protecting the interests of developing countries at international fora, including the Agriculture Framework Proposal and IP (intellectual property) waiver for Covid vaccines at the World Trade Organisation.
India played a major role in the inclusion of African Union (AU) as a full member of G20. To provide a voice to Africa in the UN, India stands behind the AU’s Ezulwini Consensus and the Sirte Declaration. India is among the biggest contributors to the United Nations Peacekeeping Force; we have 46 embassies in Africa.
The twin shocks of Covid-19 and the Ukraine war have dealt a heavy blow to the African economies, which are reeling under debt distress. At the 19th CII India Africa Business Conclave held last month in New Delhi, Vice President Jagdeep Dhankhar said, “India is aligned with Africa’s imperative to reduce its dependence on commodity exports and better integrate its production and trade activities into the global economy.” The India-Africa growth partnership is a building block of the India-Global South partnership. The inordinate delay in holding the fourth India-Africa Forum Summit is worrisome; the previous editions were held in Delhi (2008 and 2015) and Addis Ababa, Ethiopia (2011).
In this era of geopolitical competition and realignment, leveraging the historical partnership with Africa is imperative. India should work closely with the AU regarding the India-Africa Forum Summit and build on the gains made at the G20 Summit by spelling out the agenda, especially in areas like clean technology, climate-resilient agriculture, maritime security, connectivity and the blue economy. The India-Africa summit can be an opportunity to devise a more contemporary agenda for global rebalancing and strengthening of the Global South. Indian leaders should also resume bilateral visits to the continent.
