Linking Africa and India - new media

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BILATERAL TRADESynergy between India & AfricaUnlimited Trade &Investment PotentialAwaits TappingT.C. Venkat SubramanianChairman & Managing Director, Export-Import Bank of IndiaDespite the many challenges facing Africa,considerable progress has been achieved throughimproved macro-economic management and continuedstructural progress in many countries. This hasresulted from the strong commitments of many Africangovernments to prudent fiscal, monetary and exchangerate policies.Stimulus to sustained growth would emanate from thedeepening of reforms, structural transformation,rebuilding institutional capabilities and sound as well asefficiently managed macro-economic policies. The needfor African countries to redouble their efforts is firmlyarticulated in the New Partnership for Africa'sDevelopment (NEPAD). Reflecting the increasingresilience of the African countries to globaluncertainties, real GDP growth of Africa strengthened toan estimated 4.1 per cent in 2003, from that of 3.5 percent in 2002, and during 2004 is projected to increasefurther to 4.2 per cent. On the inflation front, improvedmacroeconomic policies have resulted in relatively lowinflation rate in most African economies.Since the commencement of operations of Export-ImportBank of India (Exim Bank) in 1982, the countries in theAfrican Continent have been a focus region, and thus acritical component of Exim Bank's strategy to promoteand support two-way trade and investment. Thiscommitment towards building relationships with theAfrican region is reflected in the various activities andprogrammes which Exim Bank has put in place with aview to create an enabling environment to facilitate andenhance bilateral commercial relations between Indiaand countries in Africa.Indo-African Trade RelationsSynergy that exists between India and Africa can begauged from the fact that bilateral trade has risen to asmuch as US$ 6.6 billion in 2002-03 from that of US$ 967million in 1990-91, due to rise in both exports to andimports from the African region. India's exports to Africahave reached US$ 3.1 billion in 2002-03 from a relativelylow figure of US$ 394 million in 1990-91. As a result, theshare of Africa in India's total exports has risen from amarginal 2.2 percent in 1990-91 to a healthy 6.0 percentin 2002-03. Concomitant rise in imports from Africaduring the comparable period attest to increased twowaytrade relations, wherein India's imports from Africahave risen from US$ 573 million in 1990-91 to US$ 3.4billion in 2002-03, with a resultant 5.6 percent share inIndia's total imports, up from 2.4 percent share in1990-91.“Focus Africa” ProgrammeThe “Focus Africa” programme launched by theGovernment of India from the year 2002-03, wasenhanced in April 2003 to cover, in effect, the entireAfrican continent. Besides identifying specificcountries, the programme has also identified specificproduct groups for focussed approach, and has alsocalled for an integrated approach involving allconcerned institutions and agencies for enhancingbilateral trade and investment relations.Exim Bank's InitiativesAs highlighted above, Exim Bank has committedresources and has in place a comprehensive range offacilities and programmes to facilitate and catalyseIndia's trade with the African region.Exim Bank has extended Lines of Credit (LOCs) to anumber of institutions/agencies in Africa with a view toboosting India's exports to the region particularly forSMEs. To add to these initiatives, Exim Bank also activelyfacilitates investment by Indian companies in Africa inthe form of joint ventures and wholly subsidiaries. Theseventures are in countries including Botswana, Egypt,Ghana, Kenya, Mauritius, Uganda, South Africa,Tanzania, Senegal and Zambia, and encompass diverseareas such as hotels, hygiene products, denim textiles,pharmaceuticals, dyes and fertilizers.Participation in projects in Africa funded by multilateralagencies is an important avenue to enhance presence inoverseas markets, and Exim Bank actively facilitatesINDO-AFRICAN BUSINESS 10August-October 2004
BILATERAL TRADEparticipation of Indian companies / consultants in suchprojects. As a partner institution to promote economicdevelopment in Africa, Exim Bank maintains stronginstitutional linkages with key institutions in Africawhich include the African Development Bank, the AfriExim Bank, the PTA Bank, the East African DevelopmentBank, the West African Development Bank (BOAD), theAssociation of African Development FinanceInstitutions and the World Bank. At the same time, EximBank has tie-ups with institutions such as theInternational Finance Corporation (under which theAfrica Project Development Facility is operated), the PTABank, and the African Management Services Company,to provide consultancy support services in the region.Exim Bank has also taken active participation in theinstitutional building process in a number of countries inAfrica. Besides being associated in the setting up of theAfri Exim Bank and taking equity stake, the Bank hasbeen involved in the design and implementation ofExport Finance Programmes of Industrial DevelopmentCorporation, South Africa, and in the establishment ofExport Credit Guarantee Company in Zimbabwe.Exim Bank has recently published a research paper on“Strategy for Quantum Jump in Exports: Focus on Africa,Latin America and China”, which outlines an analyticalapproach for achieving a significant increase in India'sexports, over the medium term, by focusing on Africa, asalso on Latin America and China. With regards to Africa,the study estimates that India could aim to achieve by2007, a target import share of 10per cent in Africa, whichwould translate into an export level valued at US$ 18billion. This, in turn, would give an added edge inachieving the overall export target set by the MediumTerm Export Strategy of the Government of India.Regional Combinations for Focussed ApproachStrategy to enhance bilateral trade and investmentrelations would need to encompass a regional approach,and this in turn could entail focussing on select regionaltrading arrangements in the region. With a view toboost intra-regional trade andinvestment flows,a number of countries in Africa have entered in tradingarrangements while existing ones have been renewed inrecent years. These arrangements envisage removal oftariffs and other impediments to intra-regional tradeflows, while some also aim at fostering commoneconomic and monetary union amongst membercountries, as also common currency.Major trading arrangements in Africa include theCommon Market for Eastern and Southern Africa(COMESA), Southern African Development Community(SADC), Southern African Customs Union (SACU), WestAfrican Economic and Monetary Union (UEMOA),Economic Community of West African States(ECOWAS), Central African Customs and EconomicUnion (UDEAC), Economic Community of CentralAfrican States (ECCAS), Indian Ocean Commission,among others. These trading arrangements representcountries in eastern, southern, and western as alsowestern Africa.Opportunities in the Services and IT-related SectorsOpportunities in the services sector could also beexplored, with many countries in the region activelypromoting business opportunities in recent years.Sectors such as tourism, healthcare, education, financialservices present opportunities for setting up relatedinfrastructure as also skilled manpower to renderservices in these sectors.With the global information and communicationtechnology (ICT) revolution increasing making inroadsin the African region, the strengths of countries like Indiain the IT, bio-tech and software development areas couldbe harnessed to facilitate and supplement the concretemeasures that have been effected in the region. Forinstance, in 1998, 15 African countries agreed to supportan Information and Communication Infrastructureknown as 'The Africa Connection', and developmentefforts are in progress in SADC, COMESA and ECOWAScountries. Further, members of the East AfricanCommunity, viz. Kenya, Tanzania and Uganda, have alsolaunched a telecommunication project to improve accessto advanced and reliable communications. Besidesthese, many African countries have also embarked ondeveloping and building up their ICT infrastructure.With IT set to play a key role in the economicdevelopment in the region, opportunities exist to takepart in developments in the sector, while supportingAfrican countries in formulating national IT policieswould serve to forge long-term relationships in theregion.INDO-AFRICAN BUSINESS 11August-October 2004
Page 1 and 2: www.indoafricanbusiness.comEXIM BAN
Page 3 and 4: EDITORIALDear Readers,Greetings. Wh
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Page 38 and 39: CINEMAomancing Africa,HOLLYWOOD STY
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