D R . R E N U M O D I

C E N T E R F O R A F R I C A N S T U D I E S

U N I V E R S I T Y O F M U M BA I

Africa 2063

The Africa We Want

The Future We Want: Agenda 2063

The African Union (AU) on its 50th anniversary released a

declaration titled „The Future We Want: Agenda 2063.

The document spells out AU‟s vision and plan of action for a

long term development strategy at a time when

the „international finance architecture is changing rapidly and

there are augmented flows of FDI to Africa beyond

commodity producing sectors‟.

The UNGA endorsed the document entitled, Transforming Our

World: the 2030 Agenda for Sustainable Development, which

lays out a roadmap for a post-2015 development agenda.

The Future We Want: Agenda 2063

The UN held the third international conference on 13-16 July

2015 on the theme „Financing for Development‟. In end July

2015, UNGA adopted a resolution „The Addis Ababa Action

Agenda of the Third International Conference on Financing for

Development’.

The document affirms the role of domestic as well as „private

international capital flows‟ and international development

cooperation initiatives from the South as well as the North for

financing development.

The documents listed above provide a road map for Africa‟s

future development in partnership with both the North and

the South, and indicate potential areas of cooperation.

Our aspirations for the Africa we want

Aspiration 1 - A prosperous Africa based on inclusive growth

and sustainable development

Aspiration 2 - An integrated continent, politically united,

based on the ideals of Pan-Africanism and the vision of

Africa‟s Renaissance

Aspiration 3 - An Africa of good governance, democracy,

respect for human rights, justice and the rule of law

Our aspirations for the Africa we want

Aspiration 4 - A peaceful and secure Africa

Aspiration 5 - An Africa with a strong cultural identity,

common heritage, values and ethics

Aspiration 6 - An Africa whose development is people-driven,

relying on the potential of African people, especially its women

and youth, and caring for children

Aspiration 7 - Africa as a strong, united and influential global

player and partner

Why Africa?

India and Africa‟s historical linkages, their struggle against

colonialism and the post Bandung consensus on South- South

cooperation, has given way to pragmatism, economic

diplomacy and beyond.

According to Ernst and Young‟s „Africa attractiveness survey'

(2015) capital investments into the continent rose to

US$128billion. Africa‟s share of global capital investments

and job creation in 2014 was higher than in the past years.

FDI into Africa was second only to the Asia- Pacific region.

Why Africa?

As a result of rapid urbanization and a growing middle class

on the continent sectors such as construction, hospitality,

consumer products and telecommunications were the major

draws in 2014 while traditional areas such as agriculture and

infrastructure too continued to attract investments.

It is estimated that Africa will grow at about 5 percent in 2016

but on its pathway to economic growth, Africa faces both

external and internal challenges for financing development.

The major external challenges include a decline in Overseas

Development Assistance (ODA) and a marked decrease in

demand for commodities by China- a major importer of

natural resources from the continent

Why Africa?

For Africa, India offers a significant avenue for bridging the

financing gap-to fuel growth, generate livelihoods and reduce

poverty.

This it does through 4 avenues:

1. Trade

2. FDI (Foreign Direct Investment)

3. LOC‟s (Lines of Credit)

4. Grants

Indian Development and Economic Assistance

Scheme(IDEAS)

The Government of India (GOI), in 2003-04, formulated the

India Development Initiative (IDI), now known as Indian

Development and Economic Assistance Scheme (IDEAS), with

the objective of sharing India‟s development experience

through (a) capacity building and skills transfer, (b) trade, and

(c) infrastructure development.

Department of Economic Affairs on behalf of Government of

India had been extending Lines of Credit (LOCs) to friendly

developing foreign countries. These LOCs were essentially

„Government to Government‟ (G to G) credit lines as the credit

agreements were signed between GOI and the Government of

the recipient country.

India‟s Trade with Africa (USD billions)

Items 2005-06 2010-11 2015-2016 (April-

Sep)

India‟s export to

Africa 16.2 19.7 32.8

India‟s Imports from

Africa 17.7 32.0 38.6

India‟s Total Trade

With Africa33.9 51.7 71.4

India‟s Export and Import 2015-2016 (April-

September)

Rank Country Export Import Total Trade Trade Balance

1 Nigeria 1,154.31 5,768.41 6,922.72 -4,614.10

2 South Africa 2,012.83 3,310.97 5,323.80 -1,298.15

3 Egypt 1,290.14 804.02 2,094.16 486.13

4 Ghana 302.87 1,779.32 2,082.20 -1,476.45

5 Angola 130.38 1,760.42 1,890.79 -1,630.04

6 Kenya 1,315.21 57.14 1,372.34 1,258.07

7 Tanzania 928.28 343.04 1,271.33 585.24

8 Mozambique 693.55 152.80 846.34 540.75

9 Algeria 462.92 169.67 632.59 293.24

10 Sudan 440.39 113.97 554.35 326.42

Case Study: Cote d‟Ivoire

Cote d‟ Ivoire, on the west coast of Africa is the second largest

exporter of cashew nuts in the world and India imports eighty

percent of the product. These nuts are then processed in India

and re-exported globally.

The above statistic on India- Africa trade brings to light the

urgent need for capacity building and transfer of technology

for value addition to commodities in Africa.

For the „Africa rising‟ narrative to continue, investments must

be made in the infrastructure and manufacturing sectors and

value added or finished products instead of raw commodities

are exported in the global markets. In other words, India‟s role

to further the „Make in Africa‟ agenda can potentially make a

significant contribution to Africa‟s economic growth.

Industrialization can also provide employment opportunities

for a rising population in a continent where growth rates,

across the continent have dropped from the 2014 levels.

Africa has the youngest population in the world. The

continent‟s labour force is estimated to grow to 1 billion by

2040, which will be the largest in the world, ahead of both

China and India.

There is an urgent need to generate employment and upgrade

skills in a continent with„about 200 million people in the age

bracket of 15 and 24 (i.e., about 20 per cent of the

population).

FDI Equity Inflows and Outflow

FDI Inflows During April 2000 to March 2015 FDI Outflow Cumulative (April 1996- March 2015

Country US$ mn Country US$ mn

Mauritius 86,971.80 Mauritius 43211.0

South Africa 289.6 Mozambique 2673.5

Seychelles 181.3 Sudan 1238.8

Morocco 137.4 Egypt 981.0

Kenya 21.7 South Africa 437.6

Liberia 14.6 Libya 254.6

Nigeria 13.1 Liberia 192.3

Ghana 7.7 Kenya 169.4

Egypt 3.3 Nigeria 118.6

Tanzania 1.6 Tunisia 113.4

Africa 88,230.7 Africa 50072.8

Lines of Credit (LOC)

The top ten recipients of Indian concessional loans through the Exim Bank‟s Lines of Credit (LoCs) are Ethiopia, Sudan, Mozambique, Tanzania, Democratic Republic of Congo, Mali, Senegal, Nigeria, Republic of Congo and Central African Republic with approved loans (in USD) of 1069.54 mn, 691.9 mn,626.44 mn,523.04mn, 452.94 mn, 253.00mn, 239.15mn, 216.54mn and 210.44mn, respectively.

It is important to note that India‟s private sector engagements for project execution in Africa are not concentrated in resource rich countries alone! The point that just about 50 percent of the approved LoCs have been disbursed thus far has been an area of concern to both the partners and was addressed at the IAFS III in October 2015.

Lines of Credit (LOC)

Ethiopia heads the ranking with a total of seven LOCs

amounting to more than US$1 billion, which corresponds to

16% of the value of LOCs granted to Africa partners. The

overall focus of LOCs are on energy, agriculture and

infrastructure projects. In addition, a Line of Credit of US$

500 million was extended to West African countries through

ECOWAS Bank for Investment & Development (EBID)

The LOCs have been the most important source of project

financing in Africa. This has helped Indian companies enter

the African market as well as expand their footprints in the

continent. However, there has been a huge gap in the LOC

commitments and disbursements.

Grants

While India's grants to Africa increased significantly since

2002-03, it needs to be noted that this increase has been in line

with the overall increase in India's development assistance.

Hence, while in each of the two fiscal years 2012-13 and 2013-

14, India provided more than US$40 million of grants to

African governments, the respective shares in overall Indian

grants and loans were close to 4.5 percent and 3.5 percent,

respectively.

Further sectors that are prioritised by grants are information

technology, multi-sector projects and health accounting for

16%, and14% and 13% of grants to Africa, respectively

India Grants Africa (Grants)

Country Donation Year

Benin (LDCs) 100 tractors 2009

100 tractors 2010

Central African

Republic(LDCs)

Two learning stations under the Hole-in-Wall Computer Education 2011

Chad(LDCs) 5,000 metric tonnes of rice 2004

Comoros (LDCs) 25,000 tonnes of non-basmati rice 2008

Democratic Republic of

Congo (LDCs)

Setting up an IT Centre of Excellence in Kinshasa 2010

Eritrea (LDCs) 5,000 metric tonnes of wheat 2003

- 1,500 metric tonnes of wheat 2003

- 200 metric tonnes of sugar 2003

Guiana (LDCs) Tata Steel also donated 10 Buses 2013

Liberia (LDCs) 15 buses 2014

Rwanda (LDCs) Solar electrification of 35 schools in rural 2014

- two military vehicles 2014

Zimbabwe HIPC) 50,000 tonnes of rice 2003

500 tonnes of rice 2015

India Grants Africa (Cash)Country Purpose US$D Year

Benin (LDCs) Health 1,000,000 2009

Education 1,000,000 2009

Botswana(HIPC) Health 22.5 mn

(22500000)

2006

- Education 22.5 mn

(22500000)

2006

Burundi (LDCs) Disaster relief US$ 100,000 2014

Cape Verde (LDCs) Fight dengue fever. US$ 50,000 2010

Comoros (LDCs) Torrential rains US$ 100,000 2012

Democratic Republic of the

Congo (LDCs)

60 “Sonalika” tractors with accessories

& spares worth

US$ 0.66 million 2006-07

- Medicine US$ 1,000,000 2008-09

Gambia (LDCs) Health and Education US$500,000 2010

Malawi (LDCs) towards flood relief US$ 0.2mn 2008

- Setting up of capacity building

projects.

US$ 5,000,000 2008

- medical equipment US $ 1.5 million

(1,500,000)

2010

- mammography machines and

ultra-sound

US $ 1.5 million

(1,500,000)

2010

- medicines and drugs US$1,000,000 2015

- tractors and implements supplied US$1,000,000 2015

Namibia(HIPC) Twin Faculties of Mining Engineering

and Information Technology

US$12.16 Millions 2014

Niger (LDCs) food crisis USD 100,000/- 2010

- purchase of two television cameras for

the National Television

5.8mn

(5,800,000)

2011

Republic of the Congo (HIPC) Medicines US$ 2,00,000 2010

- humanitarian assistance and disaster

relief

US$ 500,000 2012

South Sudan (LDCs) Health and education sector US$ 10,000,000 2005

Grants Globally

Grants Amount (Rs. crores)

Aid to Bangladesh 250.00

Aid to Bhutan 2919.40

Aid to Nepal 420.00

Aid to Sri Lanka 500.00

Aid to Maldives 25.00

Aid to Myanmar 270.00

Aid to Afghanistan 676.00

Aid to African countries 200.00

India Africa Forum Summits (2008, 2011 and

2015)

The India Africa Forum Summit I (IAFS-I), India announced a grant of US$D 500 million to assist capacity building in Africa, setting up specialized institutions, extending scholarships, training programs and implementing the Pan-African e-Network project.

At IAFS-II, India announced a grant of US$D700 million for new training facilities, and a US$ 300 million LOC to support the development of an Ethio-Djibouti railway line.

IAFS III, India announced a grant assistance of US$D 600 million. Include an India-Africa Development Fund of US$D 100 million and an India-Africa Health Fund of US$ 10 million and 50,000 scholarships.

IAFS I: April 4th – 8th , 2008, LOCs- US$D 5.4 billion in new

Delhi, India (14 African representatives country)

IAFS II: May 24th to 25th , 2011, LOCs: US$ 5 billon, Addis

Ababa, Ethiopia (15 African representatives country

IAFS III: October 26th -29th , 2015, LOCs: US$ 10 billion,

New Delhi, India (54African representatives country

India has the good fortune of imparting education and

training to around 25,000 African students. Capacity building

institutions to, build and strengthen capacities at the pan-

African, regional and bilateral levels.

India has helped Africa through $7.4 billion in concessional credit

and $1.2 billion in grant since 2008; training of 25,000 young

Africans in India in the past three years; the process of creating 100

capacity-building institutions; and developing infrastructure, public

transport, clean energy, irrigation, agriculture and manufacturing

across Africa.

Partnership with Africa would be further strengthened through a

new concessional credit of $10 billion for the period 2016–20; and an

assistance grant of $600 million. The latter would include $100

million for India Africa Development Fund, $10 million for India-

Africa Health Fund, the financing of 50,000 scholarships in India for

the next five years, funds for the expansion of the Pan Africa E-

network, and of institutions of skilling and training across Africa.

Since the IAFS II (2011) over 24,000 scholarships across 300

training courses conduced across 60 institutions have

benefitted Africans in subjects such as IT, renewable energy,

marine hydrography and agriculture. In 2015- 2016, 900 slots

have been extended to countries in Africa by the Indian

Council of Cultural Relations (ICCR) under the Indian

Technical and Economic Cooperation (ITEC) program.

The top five countries in terms of recipients of scholarship

slots are Mauritius (97), Kenya and South Africa (52 each)

Ethiopia (50) followed by Mozambique (34)

In view of the slow progress of projects under IAFS I&II,

when the Committee desired to know whether any remedial

measures were undertaken by the Ministry, the Ministry

submitted in a post-evidence reply as under:

“The Ministry has been constantly writing and following up with the

Host countries to fulfill their obligations for providing land, building

etc. for hosting the institutions. While efforts are made to resolve

outstanding issues through bilateral engagement wherever possible,

Ministry will also engage with the African Union and/or the

concerned Regional Economic Community to get expedited response

from the host countries or, if necessary, to find an alternative

location.”

THANK YOU!