India-Africa Forum Summits

India-Africa summits started from 2008 with New Delhi as its first venue. Since then it, was decided to hold these summits every three years, alternately in India and Africa. Second summit was held in Addis Ababa in 2011. The third summit, scheduled to be held in 2014, was postponed because of the Ebola outbreak, and took place in October 2015.

Rationale

India and Africa had comparatively stronger relations in the first three decades of independence but then India lost momentum in the wake of its recalibrated foreign and economic policies. The idea of India-Africa summits was mooted to reboot the relationships. Currently, India has significant strategic, economic and political stakes in Africa. Africa is a resource rich content but most countries out there lack expertise to exploit those resources. India has technology and can build synergy in this respect with African countries. Further, the shared interest of India with Africa include fight against terrorism, piracy in Indian Ocean, Africa’s support towards our UNSC ambitions and setting off China’s progress in that continent.

Importance of 2015 Summit

For the first time, the India-Africa summit has done away with the so called Banjul Formula.

This summit was important because it dispensed with the practice of following the Banjul formula. This Banjul Formula was adopted by the African Union (AU) in 2006 and it meant that India would invite only 15 heads of state or government through the African Union. But this time, all the 54 heads of state and government were invited and of all who came, 40 were heads of state. This was largest gathering of leaders in India after India hosted 1983 NAM summit. Hitherto, only few other countries viz. China, Japan and USA have engaged the entire African continent.

Major Agreements Announced In 2015 Summit:

• In addition to the $7.4 billion concessional credit pledged in 2008, India has announced credit of $10bn over a period of five years.
• India will offer grant assistance worth $600 million, which will include $100mn for the India-Africa development fund and $10mn for an India-Africa health fund.
• India has also announced 50,000 scholarships to African students to pursue their studies in India.
• Expand and extend the Pan Africa e-Network… which links 48 African countries to India and to each other.
• Joint monitoring mechanism with the Africa union will be set up.
• African countries have insisted that next conference held after five years not three years.

Key Facts About Africa’s Economy

The combined GDP of African continent is $2.5 Trillion and the economic growth in recent years has been around 3.5-3.9%. The GDP of Africa is dominated by Oil Exporting Economies, evident from the fact that three fourth of African GDP comes from five countries viz. Nigeria, South Africa, Egypt, Algeria, and Angola.

In terms of Global Trade, few countries have shown upward trends but most Africa countries are grappling with developmental challenges such as high unemployment, lack of economic transformation, chronic food insecurity, environmental degradation etc. The African Countries recognize these challenges at the continental level and have formulated a so called “Agenda 2063” to deal with these pernicious issues.

Areas of Cooperation Between India and Africa

India and Africa have a three-layered relationship viz. bilateral, regional and pan-African. The foci of these relations are Energy Cooperation, Trade and Investment, Maritime Cooperation, Peace and Security and Cooperation towards global negotiations with respect to UNSC Reforms, Environmental talks etc. Other focus areas include Infra Development in African, skill development of African students and youth and sharing India’s adaptable technologies with Africa. Some of them are discussed below:

Energy Cooperation

Oil holds centre place in India-Africa relations. Currently, 70% of India’s oil imports are coming from Middle East (mainly from Saudi Arabia and Iran). There is a need to diversify the portfolio of the crude energy suppliers to set off the problems created by any political turmoil in Middle East. Towards this end, India has been nurturing its relations with oil producing African economies including Nigeria, Ghana, Equatorial Guinea, Côte d’Ivoire and Sudan. Currently, one-fourth of India’s crude oil imports are sourced from Africa. Further, India is also importing coal from South Africa.

Apart from coal import, India is also increasingly investing in oil exploration in Africa. The ONGC Videsh Limited (OVL) has large overseas investment in Sudan and has acquired stakes in Senegal and other African countries like Côte d’Ivoire, Libya, Egypt, Nigeria and Gabon.

Trade and Investment

India is currently, fourth largest trading partner of Africa. While crude oil accounts for some 67% of India’s total imports from Africa, other imported items include gold, inorganic chemicals, metal ores, metal scrap and cashew nuts. After Nigeria (Crude Oil) , South Africa (Gold, Coal) is largest source of India’s imports from Africa. In terms of exports, South Africa is the leading destination for India’s exports to Africa.

India’s private sector has played a pivotal role in the expansion of trade relations. Indian investments in Africa have multiplied and are currently pegged at around $ 35 billion dollars. They are spread across sectors such as telecommunications, information technology, hydrocarbons and agriculture.

Maritime Cooperation

There has been a growing convergence between India and Africa maritime cooperation and security issues. Most of the issues of common concerns are piracy, drug trafficking and security of sea lanes. In recent years, India has deployed its Navy in the Gulf of Aden in the Indian Ocean region in a bid to deal with the piracy challenge. In most parts of Africa, the navies and coast guards are not equipped to deal with this threat. Thus, the possibility of India – Africa maritime cooperation is immense. The African countries have developed the Africa Integrated Maritime Strategy 2050 that provides a roadmap to deal with the maritime security challenges and measures to develop the blue economy. This strategy blends well with the Modi governments focus on ocean governance and economy. Thus the possibility of India extending a hand across Indian Ocean to promote Samudri Mitrata (Friendship across the Ocean) cannot to be discounted.

Peace And Security

Africa is dealing with terror problem with Boko Haram in Nigeria, Al Qaeda in Maghreb (AQIM) in Mali, the presence of Islamic State in Libya and Al Shabaab in Somalia. Terrorism and extremism are perceived as the greatest challenges the African continent is confronted with. The rising number of attacks and their increasing level of sophistication along with transnational connections with radical Islamist groups are a matter of concern for Africa. India has long been a victim of terrorism and therefore can share its experience in countering terrorism with the African countries if they so desire.

UNSC Reforms

Both India and Africa are keen to reform the existing global governance structures, especially the UN Security Council (UNSC), and shape the emerging global regimes, particularly those related to food, energy, climate, water, cyber and space. Africa remains vital for India’s emergence as a global actor in the international institutional arena. For example, India has been aspiring for a permanent seat on an expanded Security Council, arguing that the powerful veto-wielding body fails to reflect today’s reality. To get elected to a revamped Security Council, India needs the support of Africa, which with 54 votes forms the largest voting bloc in the UN.

Similarly Africa, with more than a quarter of the members of the UN, is not represented in the powerful UN body. India’s claim is that as the second most populated country and the largest democracy in the world, it deserves a permanent seat in a reformed Security Council.

Issues and Challenges

Increasing interests of India in Africa has its pros and cons. Currently, the India Africa Trade is worth $70 billion and its only a third of Africa-China trade of $200 billion. Further, on many issues such as climate change, UNSC reform and UN peacekeeping, there are significant differences between India and some countries of African continent. In case of UNSC reforms, for instance, the Ezulwini Consensus adopted by African nations {on behest of China} effectively preserves the status quo. Thus, the African consensus is beneficial for exisiting five five permanent members of the UNSC rather than either India or Africa’s interests. Further there are some more challenges that hinder India’s strategic and economic interests in Africa. Firstly, there is no dedicated mechanism to pursue strategic investments and business opportunities in Africa. Like China, Indian investments abroad in Africa need to pay attention to CSR (Corporate Social Responsibility) aspects of business also there. Secondly,  Indian investments in Africa have been questioned several times. For example, a few years ago, questions were raised on the subsidised export of rice to some sub-Saharan African countries. Thirdly, most African countries are still least developed and look forward to credit lines. To work in Africa means to run a credit line worth billions of dollars. However, the eventual beneficiaries of these credit lines would be the Indian companies with whom the recipient governments are obliged to buy. This model has helped China. Fourthly, Indian Diaspora in Africa is not integrated within the political and cultural milieu of the host countries. More economic and cultural interaction can well change that situation.

China’s Prescience In Africa

Americans, Europeans, Koreans, Chinese and others have shown remarkable interests in Africa in recent decades but all are dwarfed by the presence and engagement of China in Africa. China has made heavy investments in Africa including in infra projects such as roads, railways, airports, government buildings etc. Only in Sub-Saharan Africa, China has invested more than $180 billion in decade of 2005-2015 in areas ranging from energy to transportation. India’s current trade with Africa is almost one third of that of China. Further, there are some specific differences between India’s presence in Africa vis-à-vis China. Firstly, while China prefers government-to-government deals, Indian investment is mainly in the private sector, notably in telecommunications, pharmaceuticals and manufacturing.

Secondly,  China’s naval presence in the waters of Africa has become more intensive and sustained. Beijing is said to be negotiating different kinds of access arrangements for its armed forces in Africa. The tiny but strategically located Djibouti has confirmed that it is in talks with Beijing on the development of a base. We note here that Djibouti already hosts the military facilities of America, France and Japan. India is nowhere in the scene in this context. Thirdly, the imperative to protect its growing trade and investments in Africa has seen a surge in China’s military profile also. China is engaged with Africa in defense exchanges, military assistance, cultivation of special security partnerships and arms sales etc. Further, China has gone beyond the traditional emphasis on “non-intervention” to a more active role in “conflict resolution”. It has sent combat troops to peacekeeping missions in Africa and to join regional efforts to counter non-traditional threats to security.

In summary, India’s presence in Africa is dwarfed and can be eclipsed by China as India does not have resources to beat the level of China’s engagement there.

But does India need to go the China way in Africa? It is neither desirable nor compulsory to follow a path of narrow economic interests based on resource exploitation. Currently, there is more of private investments and Indian companies should adhere to the basic canons of corporate social responsibility (CSR) and a partnership-oriented business culture. India has worked and should in future work towards value-addition, employment creation and skill development; much like we did in Afghanistan. The India sponsored Pan-African e-Network (in partnership with the African Union) links 53 countries through tele-medicine, -education and -governance, and plays a crucial role in fostering skills and human resources that are critical for Africa to develop in a sustainable way. In the long term, such initiatives will pay off as African countries start to recognize India’s added value in contributing not only to the quantity, but also to the quality of their economic growth.

Apart from this, the African countries expressed their interest in learning from India’s successful experience with federal democracy, local government institutions and independent judiciary. Moreover unlike china; India’s soft power stand and policies like respecting other country’s sovereignty would give more space to India in building a long term relationship.