India and Africa are emerging centres of growth in the world, with a combined population of over two billion. Their large human and natural resources—which has largely remained untapped—is a potential, if properly tapped, for high rates of growth.

A significant change from the not too distance past, today, Africa is at the heart of several global development initiatives that mark a renewed commitment on the part of the international community towards Africa’s development, such as G8’s focus on Africa, the 25 percent replenishing of resources for the International Development Association (IDA), the progress report by United Nations on efforts to achieve the Millennium Development Goals, etc. In the communiqué on Africa adopted by the G8 Heads of State Summit—which was also attended by Indian Prime Minister Dr. Manmohan Singh—at Gleneagles in July 2005 it was stated that “African countries need to build a much stronger investment climate: we will continue to help them do so, including through the promotion of a stable, efficient and harmonised legal business framework,” noting, “the improvement of the investment climate through the Organisation for Economic Co-operation and Development/The New Partnership for Africa’s Development (OECD/NEPAD) Investment Initiative.” The initiative, launched in Johannesburg in November 2003, aims to foster sustainable growth, employment creation, and poverty reduction by advancing private sector development in African countries. The Initiative uses the Policy Framework for Investment (PFI), and other tools and instruments to identify where the obstacles to investment lie, to assess where the priorities for reform need to focus, and as a basis for building capacity in African countries for investment climate assessment. The Executive Heads of the African Peer Review Mechanism (APRM) and NEPAD Secretariats endorse further exploring the use of the PFI in support of the APRM process. The next roundtable will be held in autumn 2007 and will advance the interest of African countries seeking a more robust, PFI-like investment dimension in the APRM, and support the APRM secretariat to improve their own peer review process in the area of investment climate assessment. The roundtable will also focus on strengthening the regulatory environment for public private partnerships for infrastructure development in the water and sanitation sector. Expected results of the roundtable include the identification of specific success criteria for public private cooperation for mobilising beneficial investment in African countries.

In recent years, there has been a vast improvement in the political and economic stability in the region—this coupled with Africa’s vast oil, gas, and mineral reserves, along with the restructuring of many African economies has turned the continent into a very lucrative destination for trade and investment. Though there are some snags yet to be overcome such as existing bottlenecks in expansion of bilateral cooperation with some countries, there are immense opportunities on offer by many African economies for enhancing trade and economic cooperation between India and Africa. Apart from special ties and initiatives that India shares individually with various African nations, some due to historic reasons, we now see a more inclusive Africa-centric approach being adopted in economic strategy emerging in many forms and forums—such as the Confederation of Indian Industry (CII)-organised India-Africa Project Partnership—to enhance the economic relationship. CII has an Africa Committee that focuses on developing strategies to enhance economic, industrial, and trade relations; identifying areas of mutual cooperation; identifying issues of concern and evolving suitable policy recommendations; evolving guidelines and checklists for different forms of industrial cooperation; and represent sectors for mutual cooperation. CII also has institutional agreements with more than thirty counterpart organisations in nearly twenty African countries with the objective to facilitate exchange of information and promote business interests of both Indian and African Industry. The Indian Ministry of Commerce and Industry announced the Focus Africa Programme in 2002 with a focus on seven countries of the sub-Saharan region: South Africa, Nigeria, Mauritius, Tanzania, Kenya, Ghana, and Ethiopia. With a view to further enhance India’s trade with Africa the scope of this programme was further extended with effect from 01 April 2003 to all other countries of the sub-Saharan region where India has diplomatic missions—Angola, Botswana, Ivory-Coast, Madagascar, Mozambique, Senegal, Seychelles, Uganda, Zambia, Namibia, and Zimbabwe—along with six countries of north Africa—Egypt, Libya, Tunisia, Sudan, Morocco, and Algeria. As many missions in sub-Saharan Africa are concurrently accredited to other countries in the region, the programme, in effect, covers the entire African continent.

India and Africa by and large share a common perspective on many global issues, including the future and importance of multilateralism and multilateral trade negotiations, and South-South cooperation, which has led to fruitful cooperation in NAM, Commonwealth, IOR-ARC, and WTO. In broader terms, the Asian tigers’ boom of the 80s and the subsequent phenomenal growth achieved by China followed by India may indeed be a tough act to follow in the case of Africa; nevertheless, with saturated economies of the west, the time has come for greater cooperation between Africa and Asia: the Afro-Asian Summit adopting the declaration ‘New Afro-Asian Strategic Partnership’ is indicative of the potential and desire that exists for mutual benefit. Beyond Asia and Africa, India is also engaged in multilateral mechanisms such as the IBSA Dialogue Forum, which is a trilateral developmental initiative between India, Brazil, and South Africa to promote South-South cooperation and exchange.

In the study Destination Africa: India’s Vision, conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), top eight destinations in Africa for India’s exports have been identified, namely: Nigeria, South Africa, Kenya, Mauritius, Ghana, Tanzania, Algeria, and Sudan. The study lists five prime sectors—pharmaceutical and health, IT, water management, food processing, and education—as ‘engines of growth’ that will boost Indo-African trade. It has recommended strategies like strengthening of banking networks, signing of FTAs, PTAs, etc., and also highlights the role of government to put in place the necessary mechanisms and frameworks to provide direction to the industry’s efforts. The study states that the absence of Indian banks in many African countries has acted as a major constraint to industry and suggests that India must make its presence felt in Africa through greater visibility in the business arena and must capitalize on the goodwill that Indian industry has acquired over the years, both domestically and internationally. Furthermore, industry initiatives coupled with government support will provide a platform conducive for partnering growth in the emergent African economies.

Since the mid 90s, CII’s ‘Made in India’ (MII) shows, which have been held in Mauritius, Kenya, South Africa, and Tanzania, have been an ideal platform to showcase capabilities of Indian industry including products, services, consultancy, technology, and equipment. Besides the MII shows, CII also organises ‘Enterprise’ shows for exhibiting Indian small and medium enterprises (SMEs), and showcasing the enormous potential that these SMEs represent as a reliable source for world-class products and technologies at competitive prices. So far, these shows have been held at South Africa, Namibia, and Mauritius.

Africa’s rich diversity of mineral resources encompasses metals, gemstones, a variety of industrial minerals, and potential energy resources, such as uranium, coal, and hydrocarbons, with investment opportunities ranging from large-scale mining operations to smaller prospects. The agricultural sector affords participation in production, processing, and marketing of agricultural and horticulture products and commodities. Tourism sites have enormous potential for further, intensified development, and opportunities exist in game ranching, provision for high quality accommodation, transport services, adventure holiday packages, organized tours, and outdoor sports facilities. There are many investment opportunities in the energy sector, for example, hydro-electric projects and interconnectors.

The large opportunities on offer by the African continent that Indian businesses can invest in and benefit from are in areas like metal beneficiation including jewellery and handicraft, metal and hand tool fabrication, pharmaceuticals, ICT including BPO and call centres), biotechnology, telecommunication, infrastructure (tourism, communications, and energy), textiles and apparel, education, vocational training (skills’ development), printing and publishing (notebooks, and school and college textbooks) automotive industry, agro-processing, storage plants for agro products, beauty products, tiles (ceramic), financial services (mortgage finance, venture capital, merchant banking, leasing finance, and developmental banking), floriculture, fishing and aquaculture, mining, forestry and timber processing, and tourism. Indian products with good export potential include automobiles, tractors, two-wheelers, sewing machines, LPG cylinders, hand pump, oil expellers, diesel engines, marine engines, earth moving machinery, mining and construction equipment, building hardware, machine tools, hospital and surgical equipment, dental equipment, kitchen appliances, agricultural machinery and spare parts, ceiling fans and other related accessories, and electric metres and switches.

In spite of the problems still faced by the African continent, once referred to as the ‘dark continent’, its future promises to be bright, and the time is opportune now for Indian businesses to venture into the continent unfettered by the prejudices of the past. China has already made a substantial foray into Africa, but with the enormous opportunities on hand, India will still make considerable gains and substantial returns can be anticipated.