40 African Heads to Land in Capital

India Seeks Larger Footprint in the Dark Continent

Africa is experiencing greater productivity, stability and trade than ever before. Seven of the world’s fastest growing economies are now from the continent. All of this means Africa’s engagement with the world is an opportunity for better, more equal relations

More than 40 or more government heads are expected to arrive in Delhi in the third India-Africa Forum Summit from October 26-29.

The African continent is the only one that remains unticked on the Prime Minister’s global travel chart. The summit, which was postponed in December last year because of the Ebola pandemic is now in Delhi.

The first two summits – in New Delhi (2008) and Addis Ababa (2011) – saw a limited number of African leaders in attendance because of the African Union’s insistence on limiting participation to 15 countries as per the ‘Banjul formula’. (Only 15 chosen States from the 53 Nation Africa Union Members participate in Summits). The Chinese equivalent, the Forum on China-Africa Cooperation (FOCAC), started in 2000 in Beijing, has seen extensive participation from almost all African leaders. This year the African leaders once again assemble in Johannesburg for the sixth FOCAC meeting in December 2015. The United States, Japan and the EU also have their own versions of such summits.

China three times US in Africa

China’s trade statistics with the continent are overwhelming. At $222 billion, its trade with Africa in 2014 was almost three times that of the United States – a country that China only overtook in 2009 as Africa’s largest trading partner. In comparison, India’s trade statistics may not look impressive. However, compared to the bilateral trade of $1 billion in 1995, the 2011/12 figure of $70 billion is staggering. The worrying factor is that this figure has remained largely the same for the past 3 years. In 2014/15, the bilateral trade was $71.5 billion. (Indian businessmen have bitter experiences with the regulatory system in Africa, Airtel has just sold off its mobile tower business there at huge loss. Rajan Mittal told this correspondent that it takes 20 years for infrastructure investment to produce result. Indian business needs more than 50% equity in its ventures which the local governments are chary of.

Between 2000 and 2012, China undertook developmental aid projects worth $84 billion in Africa. In 2014, the Chinese Premier Li Keqiang promised another $12 billion – $10 billion in increased credit lines and an extra $2 billion to the China-Africa Development Fund. However, much of China’s aid to Africa is still directed towards infrastructure projects. While no match for China, India has also extended almost 60% of its developmental aid to Africa. In the India-Africa Forum Summit in 2008, Prime Minister Manmohan Singh had announced $5.4 billion as lines of credit to African countries, to which a further $5 billion was added in the next summit in 2011. India also wrote off the debts of Mozambique, Ghana, Tanzania, Uganda and Zambia under the Heavily Indebted Poor Countries II Initiative. Furthermore, the Indian government gives 22,000 scholarships every year to African students.

Criticisms about Chinese neo-colonialism, especially with regard to the unfair labour and environmental practices of the Chinese companies, have become quite vociferous in the past few years. One of China’s strongest supporters, the ruling African National Congress in South Africa, for instance, has recently released a discussion document where it has asked for greater caution on the negative effects of such practices. More than one million Chinese labourers occupy the African job market now. While India will not be able to challenge China’s economic dominance in the region, at least in the near future, its pull as a relatively benign power allows it a greater scope of engagement.

Besides, India’s 3 million strong diasporic community, hitherto untapped, is now viewed as a vital resource in Africa. Given how effectively the BJP government has used the diaspora, mostly in the West, to push its foreign policy agenda (as well as its ideology domestically), it remains to be seen how India’s large diaspora in Africa will be utilised by this government.

Africa Renaissance

Although the relations between India and African countries have generally been good over the years, it was only in the first decade of the 21st century that they gained significant momentum. The push came from India’s burgeoning post-liberalisation private sector but the pull was the ‘African Renaissance’ project – championed by the then-South African President Thabo Mbeki. While making a call for greater solidarity of the African countries with the Global South within the neoliberal paradigm, African Renaissance served as an ideological background for greater economic cooperation between Africa and the rising economies of the Global South.

Nigeria Oil

With only 0.3% of the global energy resources and 17% of its population, India is an acutely energy deficient country. By 2025, 90% of India’s oil demand will come from outside. The often volatile situation in West Asia has pushed India to diversify its energy basket. In the past 10 years, African countries have emerged as a major alternative to West Asia. In a single year, from 2005/06 to 2006/07, India’s imports from Nigeria increased almost 100 times. Today, Nigeria is the second largest exporter of oil to India after Saudi Arabia. Almost 45% of India’s trade with Africa is with only two countries – Nigeria and South Africa. But India’s imports from Nigeria, mostly oil, alone are more than the total trade with South Africa. There are also other benefits of sourcing energy from Africa. The oil from Africa, particularly from the Gulf of Guinea, is low in sulphur and high on quality. Most of the oil fields in Africa are offshore and hence away from conflict areas. Unlike Saudi Arabia and some countries in West Asia, African oil market is open for foreign investment. (Nigeria was notably absent in the Africa Trade Ministers Summit Chaired Nirmala Sitharaman).

Further, India’s ambitions of UN permanent membership rest majorly on the support of African countries which usually vote en-bloc – though the African Union’s Ezulwini Consensus places the continent’s plans for UNSC expansion at loggerheads with that of the G4. Maritime security in the Indian Ocean is another concern that calls for better coordination among India and eastern and southern African countries. Ninety per cent of India’s trade volume and 70% of trade value comes by sea.