Finance and Defence Minister Arun Jaitley on Monday took an indirect swipe at China’s approach to investments in resource-rich Africa and said that India, now one of the most important investors in the continent, doesn’t believe in imposing conditions on African nations.
Stressing that India’s sustained engagement with Africa, that has got a fresh impetus under the Narendra Modi government’s watch, is already making an impact on the continent, Mr. Jaitley said emerging economies like India are not only proving to be a critical source of foreign direct investment (FDI) for African nations, but also a vital export market.
“Our partnership model is different...Being an emerging economy ourselves, we understand that a prescriptive model of partnership does not work. Therefore, the cornerstone of our cooperation is voluntary partnership... demand-driven and devoid of any conditionalities,” Mr. Jaitley said.
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“We do not impose and leave it to our partners to decide what is best for them. We believe this is the most effective way of building partnerships,” the Finance Minister said at a session on India-Africa cooperation hosted by the CII here in the run-up to the African Development Bank’s (AFDB) annual meeting.
As per the Bank’s Economic Outloook report for 2016, India’s share in announced greenfield projects grew from 3.3% between 2003 and 2008, to 6.1% between 2009 to 2015.
“During the same time, China’s share fell from 4.9% to 3.2%. India is amongst the most important emerging investors in Africa. In terms of greenfield projects, India was the fourth largest investor with 45 projects in 2015, after the U.S., U.K. and the UAE,” Mr. Jaitley said.
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With exports to the U.S. and Europe flagging in recent years, BRICS nations and emerging economies have become more important for Africa, he said.
“In 2009, only 24% of Africa’s exports went to emerging countries. In 2014, the BRICS including India, and other emerging economies accounted for half of Africa’s total exports to the world,” the Minister said, calling for a wide-ranging partnership with Africa as some of its strengths such as a large young workforce are similar to India.
“We need to create jobs to take advantage of this demographic dividend. The AFDB’s ‘High-5’ agenda is not very different from our own policy priorities,” Mr. Jaitley said.
The Minister was referring to five priorities identified for Africa’s development — Light up and power Africa, Feed Africa, Industrialise Africa, integrate it and improve the quality of lives in the continent.
“India is a bright spot in the world economy and Africa is not far behind. In 2015, Africa was the second fastest growing region in the world after East Asia. If we can translate the aspirations of one third of humanity into reality, it could no doubt do wonders and shape the future of the world,” the Finance Minister said.
AFDB senior vice-president Charles Boamah earlier pointed out that though foreign direct investment into Africa has risen from $10 billion in 2000 to $65 billion in 2016, the region still faces several challenges.
“We account for just 2% of the world’s merchandise exports and spend $35 billion each year on food imports; 650 million people have no access to electricity,” Mr. Boamah said, adding that an independent study by the United Nations Development Programme has projected that the continent will be able to meet 90% of its sustainable development goals when it is able to implement the ‘High 5s’ agenda.