India ‘can help Africa industrialise’

1 October 2013

India is ideally placed to help Africa industrialise by lifting its investment in manufacturing on the continent, South African Trade and Industry Minister Rob Davies told the 3rd Africa-India Trade Ministers’ Meeting in Johannesburg on Tuesday.

The trade ministers of several African countries – including Nigeria, Ethiopia, Benin, Namibia, Senegal and Libya – are attending the high-level gathering, which South Africa is hosting on behalf of the African Union (AU) Commission.

Speaking at the opening of the meeting, Davies praised India for its continued involvement in Africa’s development, describing the country as the continent’s oldest ally. “Our relations with India are undisputed. We have been partners for many years, and our trade relations continue to grow from strength to strength.”

But Africa was now at a point where it needed to industrialise, he said, in order to move beyond the extraction and export of commodities to the production of value-added goods.

Despite India’s relatively weaker growth in 2012 and this year to date, Davies was adamant that the target of achieving US$90-billion in total trade between Africa and India by 2015 was still a realistic one. “In 2011, Africa and India’s bilateral trade reached $60-billion, suggesting we are on track to reach that target.”

At the same time, South Africa needed to pay more attention to the quality and content of that trade.

“It’s a question of what we are trading. We need to record that while Indian imports in Africa have risen by an average of 14%, they still predominantly mineral fuel, lubricants and gold. In other words, we continue to supply raw material, and this needs to change.”

This sentiment was echoed by AU Commission Chairperson Nkosazana Dlamini Zuma, who acknowledged India as an important partner in the drive to promote regional integration in Africa, but said that trade needed to be balanced.

Indian Commerce and Industry Minister Anand Sharma said the Asian country was committed to playing a meaningful role in Africa’s development.

“In 2012, Africa registered a strong growth and India had a bad year, but our trade continues to be strong. We need to ensure not only our growth should be sustainable, but it must be inclusive,” Sharma said. “We are accountable to the millions of our people who we want to be economically independent.”

Trade and Industry Director-General Lionel October, speaking to SAnews on the sidelines of Tuesday’s meeting, said: “What we have put firmly on the agenda is that currently the trade relationship is skewed … We have agreed with India, and they have accepted, that the emphasis must be on increased investment in manufacturing and agricultural processing.

“It is necessary for us to transform our economy in South Africa and the continent towards a more diversified economy, with manufacturing being at the heart of that,” October said.

According to a report by the Confederation of Indian Industry and the World Trade Organisation, overall trade between India and Africa grew by 32.4% between 2008 and 2011, compared to a 27% increase in trade between China and Africa.

During the same period, India emerged as the fastest growing export market for Africa, with exports from the continent increasing by 41.8%, compared to 28% growth in African exports to China.

India is also the fourth-largest investor in South Africa. October cited Indian involvement in the local pharmaceutical sector and lately in the automobile industry as well.

He said that, with South Africa and India both being members of the BRICS (Brazil, Russia, India, China and South Africa) grouping, this week’s meeting was an opportunity “to further elevate the interests of Africa in BRICS.

“In essence, South Africa carries the interests of Africa into the BRICS dynamics … as [there are] opportunities [for BRICS] in Africa,” October said. “We have a massive population, and Africa is becoming a big middle-class continent, and India is interested in trading with us.”