India-Africa Summit, the Scramble for Africa Continues
By Jan van Rooyen(1)
Heralding India’s formal arrival into the new scramble for Africa, the first ever India-Africa Summit is set to take place from 4 - 9 April 2008 in New Delhi. The Summit is aimed at cementing already strong ties between India and the African continent through the planned adoption of the New Delhi Declaration and Action Plan. On the agenda will be discussions surrounding agricultural cooperation and production, tariffs, trade, industry and investment, peace and security, as well as information technology, human resource development and access to minerals and energy.
In attendance will be leaders from 14 African States representing all the major African organisations including the African Union (AU) and NEPAD, the New Plan for Africa’s Development. The Summit follows last year’s high profile China-Africa Summit and raises once again the topic of the ‘Scramble for Africa’ as India’s engagement on the continent is brought under the spotlight.
THE SCRAMBLE FOR AFRICA
India’s engagement in Africa has been shadowed by highly publicised Chinese investments and related economic and political activities throughout the continent. Although keeping a low profile, India has been actively increasing its levels of investment and political influence. Political linkages and economic partnerships have flourished in the wake of India’s rapid economic development and drive to acquire vital natural resources, access to markets and labour. India is largely dependent on Africa for primary resources, though its manufacturing investments have steadily increased markedly with Tata’s growing investments in South Africa. Concurrently, African states have been increasingly focusing attention towards Asia (primarily China and India) as new sources of economic partnerships, Foreign Direct Investment (FDI) and political cooperation - a shift away from traditional Western locusts of power and influence.
INDIA–AFRICA TRADE: A FIVE FOLD INCREASE
Traditionally depending heavily on African imports of rough diamonds and cashews, India has expanded its engagement through not only promoting resource extraction and oil exploration but also through actively investing in manufacturing and subsequent reciprocal partnerships benefiting both sides. India’s strident developments in growing its manufacturing capabilities as well as its burgeoning technological sectors and business experience have proven to be a viable source of skills and knowledge transfer for African states and firms.
Most notably, trade between India and Africa has risen five fold from US$ 5 billion in 2001/02 to nearly US$ 25 billion in 2006/07. Consequently, India has started to shift away from pursuing bilateral relationships to negotiating with regional organisations. The country is in the process of signing a Preferential Trade Agreement with the Southern African Customs Union (SACU) as well as setting up a Joint Working Group to study the feasibility of a Comprehensive Economic Cooperation Agreement with the Common Market for Eastern and Southern Africa (COMESA).
DIAMONDS AND OIL
India’s engagement in Africa has been in part driven by access to scarce mineral resources including, but not limited to, oil and rough diamonds. Currently, India is the world’s largest importer of rough diamonds and subsequent exporter of cut and polished diamonds with 90% of the world’s market share. As a result of the steps taken by individual African countries towards establishing local cutting and polishing capabilities, Indian firms have been aggressively seeking opportunities to establish lasting partnerships with Africa’s diamond operations in order to ensure a constant supply of the rough gem. India’s Minister of State for Commerce, Jiaram Ramesh, recently embarked on a six day trip to Angola and Namibia to source diamond mining opportunities. No less active has been the attempts by India’s major oil companies ONGC Videsh Ltd, Oil India Ltd and Indian Oil Corp. Ltd. to actively pursue oil and gas equity stakes.
UNSC PERMANENT MEMBERSHIP
India’s strong ties with Africa extend back centuries through a shared history of colonialism and the struggle towards liberation. The large Indian Diaspora throughout Southern and Eastern Africa has cemented cultural and economic linkages establishing a continued dialogue and connectivity. Today both share similar challenges, strengths and opportunities that can be used to create a lasting mutually beneficial relationship. India has leveraged its strong ties with African countries to bolster its position in international forums, taking a leadership role in the formation of the India-Brazil South Africa (IBSA) initiative, as well as within the Non Aligned Movement (NAM) and through actively seeking African countries support in its aspirations for permanent membership to the UN Security Council. The role of African countries as a voting block within the international arena is a strong motivation to foster and strengthen diplomatic relationships.
INDIA – AFRICA: THE WAY FORWARD
Through a Framework for Cooperation, the New Delhi Declaration and Action Plan will include the commitments of each side toward cementing political, technical, economic as well as social partnerships. Ultimately, the aim of the summit is to strengthen already existing political and economic ties between Africa countries and India while bolstering a framework of increased cooperation and partnership and facilitating greater economic integration through fostering trade and investment. Both sides can benefit from increased economic and political partnership, ultimately the way forward will entail ensuring the maximisation of these partnerships. If channelled into constructive skills transfer, increased FDI and positive trade growth, Africa stands to benefit from the new scramble for the continent and India’s active engagement both as an economic and political partner.
(1) Jan van Rooyen is a Director at Consultancy Africa Intelligence - jan.vanrooyen@consultancyafrica.com
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