Experts at the 52nd African Development Bank Annual Meetings, which started Monday in Ahmedabad, India, have identified the missing links to building a strong trade and investment relationship that will lead to sustainable development in India and Africa.
Those missing links are the inability of African countries to exploit the preferential trade agreements provided by India; the need for capacity-building of small and business enterprises in Africa to bring out their real potential; using technology to leapfrog development in many sectors like education; and the inability of Indian financial institutions to push credit facilities to banks in Africa.
Manoj Dwivedi, Indian Administrative Service (IAS) Joint Secretary, Ministry of Commerce and Industry, Department of Commerce, Government of India, highlighted the four missing links when he address the audience at a panel session on African India Co-operation entitled: “Exploring Diversity: Promoting Trade and Investment”. He was joined by Admassu Tadesse, President and Chief Executive of Eastern and Southern African Trade and Development Bank (TDB), who said that his bank has been opening up to India for support it with credit facilities but it has not taken the opportunity.
“It’s time to consolidate our trade agreement preferably with trade blocs such as the Economic Community of West African States (ECOWAS),” said Dwivedi, adding that out of 21 countries, which offered duty-free partnership 11 of them have not subscribed to it.
Mahmood Mansoor, Executive Secretary of Comesa Clearing House, Zimbabwe, who was a participant at the session, concurred. Mansoor insisted that only India can address the problem.
Other panelists included David Rasquinha, Managing Director, Export-Import Bank of India; Sfiso Buthelezi, Deputy Minister, Ministry of Finance, Republic of South Africa; Abdoulaye Fall, Vice-President, Operations, ECOWAS Bank for Investment and Development.
India and Africa have had robust trade relations. Bilateral trade between them has risen around five-fold in the decade from US $11.9 billion in 2005-2006 to US $56.7 billion in 2015-2016. The rapid growth in bilateral trade flows has come about because both Indian and African Governments have systematically brought down the barriers to seamless bilateral trade flows, by dismantling various tariff and non-tariff barriers. Private sectors in both regions have been at the helm of various trade promotion and facilitation initiatives.
According to a theme paper on “Africa-India Cooperation 2017: Partnerships to Industrialise and Move Africa up the Value Chains”, India has steadily opened up its markets to African exports. The result is that Africa’s trade surplus with India has increased rapidly, albeit driven in large part by a narrow range of suppliers and commodities. Consequently, today India’s export to Africa have increased almost four-fold from US $7 billion in 2005-2006 to US $25 billion in 2015-2016, accounting for 9.5 percent share in India’s total exports.
Conversely, India’s imports from Africa, increased seven-fold from US $4.9 billion in 2005-2006 to US $31.7 billion in 2015-2016, accounting for 8.3 percent share in India’s imports total imports. India’s imports from Africa grew at an annual average of 29.8 percent during 2005-2006 to 2015-2016, as against India’s exports to Africa that grew at an annual average of 15.9 percent during the same period.