Africa must tap from India
Dr Nkosazana Dhlamini-Zuma
If we consider the evolving geopolitics of our times, according to the last Human Development Report titled “The Rise of the South”, it is believed that by 2020, the joint GDP of Brazil, China and India will overtake the combined economies of the UK, the USA, France, Canada, Italy and Germany.
It is clear from the above that emerging economies are here to stay. Their influence on the world economy is not only significant today, but it will also continue to grow in the future.
Similarly, Africa represents a frontier for global economic growth and stability, now and in the future. The resources of Africa have been the driving force upon which the world economic engine has depended. This situation is likely to continue long into the future but this time with Africa having a greater say and benefiting from its resources.
African leaders have initiated and embarked upon ambitious and far-reaching strategies and plans that will have a transformative impact on the continent.
These include a plan to industrialise the continent through the Accelerated Industrial Development of Africa, a plan to increase trade between African countries through the Boosting Intra-Africa Trade and a plan to eliminate trade barriers and deepen the integration of the African market through the establishment of the Continental Free Trade Area as well as the Programme for Infrastructure Development in Africa and Agro-Industry Development Initiatives among others.
In this regard, we urge the Government of India to support these initiatives. Africa and India have had, since times immemorial, historic trade relations. The Indian Ocean, which lies between us, not only provides us valuable links of blue highways and optic fibre highways, but it is rich in marine resources that are vital to Africa’s and India’s blue economies and trade relations.
It is encouraging to note that trade between India and Africa has grown exponentially during the past decade and is expected to reach US$90 billion by 2015. As of 2011, India has emerged as Africa’s fourth largest trade partner behind China, EU and USA while Africa has emerged as India’s sixth largest trading partner behind EU, China, UAE, USA and Asean. More than 20 percent of India’s oil and gas imports are from Africa.
Trade is not the only sector growing in the relations between Africa and India. India has begun investing in the energy sector in Africa as well as in mining, including uranium and hydrocarbons, precious metals and gemstones, especially gold and diamonds. We look forward to these investments contributing to Africa’s agenda of promoting industrialisation and value addition to its raw materials within the continent prior to their exportation and to the development of African skills and know-how.
This will ensure inclusive growth that translates into sustainable and decent job creation and retention as well as poverty eradication. In addition, while calling for more Indian foreign direct investment in Africa, such investment should be diversified and encourage local private sector participation, particularly for women and Africa’s growing youthful population.
African governments have adopted a joint Plan of Action with India for enhanced co-operation including trade. But we rely heavily on the private sector and on public private partnership to concretise this agreement. We therefore expect a lot from the Africa-India Business Council.
There is no doubt that both Africa and India have much to gain through South-South co-operation. In this regard, human resource development, investment in infrastructure development and institutional capacity building will be critical to ensure successful South–South co-operation, based on mutual and equal benefit.
We therefore wish to express deep appreciation to India for the number of capacity building institutions and various training programmes it is offering to African citizens. I am urging our member states who have offered to host those institutions to move with speed in the operationalisation of these institutions and programmes.
We must assess the state of play with all of the institutions, see where we can assist those countries that offered to host to move forward, and if not possible, to then identify other countries where these can be established in the shortest possible time.
At the recent Conference of Ministers of Industry as well as at a meeting of the African Women Entrepreneurship Programme, the need for business incubators was raised to enable women and youth to be better trained and equipped with the necessary skills so as to graduate from micro-enterprises to medium and larger enterprises with a view to satisfying both national and export demands and contribute to their respective countries’ economies.
As we prepare for the 9th WTO Ministerial Conference in Bali, we need to ensure that the interests of developing and least developed countries are safeguarded, particularly in agriculture and food security.
We must ensure that this process is used to push for greater policy space for all developing countries to pursue national and regional policies that allow them to industrialise and develop their economies, eradicate poverty and build shared prosperity.
As much as trade facilitation in itself is a necessary action for boosting intra-African trade and increasing our competitiveness, the proposed text could create supplementary challenges to our weak technical, administrative and financial capacities.
It is therefore important to ensure that the negotiation outcomes strike the right balance in ensuring that African priorities are reflected without African countries incurring crippling costs to meet WTO trade facilitation obligations. Thus, it is important to ensure adequate financial and technical support for African countries to meet the binding obligation that may be agreed upon.
The priorities for Africa are clear: we must industrialise, grow our manufacturing sectors, expand intra-Africa trade, develop our skills and human resources, grow our agriculture and agro-processing sectors and develop our infrastructure. We encourage our Indian partners to support us on this issue.
As we start reflecting on areas of co-operation for the next Africa-India Forum, it is fortunate that the period of the next Programme of Action coincides with that of the AUC’s Strategic Plan and therefore will facilitate harmonisation and follow-up action.
Dr Nkosazana Dlamini Zuma is Chairperson of the African Union Commission.