The Contribution of India to the
African Development
Marcin Nowik
marcin_nowik@interia.pl
14/06/2012, Pecs
Presentation outline
1. India as an emerging donor, what’s in it for Africa?
(Instruments, figures and examples)
3. Motives & Rethoric
4. Added value
5. Critisism
How contemporary India contribute to
African development?
1. Trade
2. Investment
3. Development cooperation
India as an emerging donor
assistance
USD m
assistance
% GNI
Brazil
RSA
India
China
356
433
547
3 136
0,03
0,18
0,05
0,09
• 9,2 bln inr in 2000 up to 29,1 bln inr in 2010,
(excluding lines of credit)
• 22% average increase of Indian aid for Africa in the
period of 1998-2008
Place of Africa in overall Indian
assistance
EXIM bank
MoEA of India
 Lines of credit
 Export subsidies and
guarantees
• Tied aid

•
•

For Sub-saharan Africa: 44,15%
in 2011
For Sub-saharian Africa: 4,85%
in 2011-12 union budget
Technical assistance
ITEC
SCAAP
In kind, projects, grants, GBS
Active Lines of Credit as on March 31,
2011 (US$ million)
Latin America and
Carribbean
144 190 325
2939
CIS
558
West Asia
567
SE Asia, Far East & Pacific
1934
North Africa
South Asia
Sub-saharan Africa
Source: Exim Bank of India
Operative LOC examples:
Receipient
Amount of Credit
Governmant of…
USD m
Purpose
Tenor
Zambia
10.00
General purpose
Up to 5 years
Angola
40.00
Railway rehabilitation
Up to 20 years
Senegal
17.87
Supply of buses and spares from India
Up to 20 years
Mali
27.00
Rural electrification and setting up of
agro machinery and tractor assembly
plant in Mali.
Up to 20 years
Djibouti
10.00
Cement plant project
Up to 10 years
Ghana
60.00
Rural electrification project and
construction of Presidential Office
Up to 20 years
Guinea Bissau
25.00
Electricity project, mango juice and
tomato paste processing unit and
purchase of tractors and water pumps
Up to 20 years
Senegal
11.00
Women poverty alleviation programme
and acquisition of vehicles from India
Up to 20 years
India’s aid to African countries: grants
and loans (Rupees million)
1600
1400
1200
1000
800
600
400
200
0
Source: Union budget, 1998-2012
ITEC, SCAAP + ICCR
The Indian Technical and Economic Cooperation
Programme (since 1964, 2 bln USD), slots
Components:
 Training (civilian and defence) in India of nominees from ITEC
partner countries;
 Projects and project related activities;
 Deputation of Indian experts abroad;
 Study Tours;
 Donation of equipment at the request of ITEC partner countries;
 Aid for Disaster Relief.
TEAM- 9
• Techno-Economic Approach for Africa- India Movement
• Burkina Faso, Chad, Equatorial Guinea, Ghana, GuineaBissau, Ivory Coast, Mali and Senegal + India
• 500 USD million
• Transfer of technologies and investment in: agriculture,
small- scale industries, pharmaceuticals and healthcare,
IT, rural electrification and transportation.
Pan-African e-Network Project (2007-2012)
 Fiber-optic and wireless network
 47-countries have already joined the project
 Provide connectivity among the Heads of State of the
African Union
 Distance education and tele-medicine
 Cost US$ 125 million
Consolidation effords




Bureaucracy
Corrupition
Misslocation
Lack of multiannual country/region strategy
India Development Initiative (2003)
Indian Agency for Partnership in Development (2011)
What motives stand behind Indian
assistance for Africa?
Taking into consideration…
 India is home to roughly one-third of all poor people in
the world. It also has a higher proportion of its
population living on less than $2 per day than SubSaharan Africa.
 Eight Indian states account for more poor people than
in the 26 poorest African countries combined (2010)
 The prevalence of underweight children in India is
among the highest in the world, and is nearly double
that of Sub-Saharan Africa (2000)
Two periods of Indian contribution
I.
-
Since country’s independence up to late 1980s
Ideological motives
II. Since economic liberalisation of 1991 up to nowadays,
intensified in the first decade of 21st century
- Pragmatic motives: commercial and geopolitical
What are the major motives to engage
in Africa?
Energy security
• Third energy consumer up to 2030
• 0,4% global crude oil deposits
• Currently 24 - 30% Indian oil imports come from Africa
• Aid/infrastructure-for-oil strategy
• Investment in Sudan, Ivory Coast, Lybia, Nigeria, Gabon,
Angola in oil extraction, processing and transportation
• Aid component: eg. ONGC, has invested US$10 million
to build a railroad in Nigeria (2006)
Access to mineral resources
Vedanta Resources, 750 m USD, Konkola, Zambia (copper)
Arcelor-Mittal, 900 mln USD, Liberia (iron ore)
Access to markets
 7,7% of foreign trade of India is with Africa (3% in case
of China, 2010)
 Total value of commodities exchange: 42 bln usd, 201011), 10 bln dificit
 Dynamic increase (in 1991 it was less than 1 bln)
 Indian diaspora in South-East Africa
 Market smilarities (language, consumer preferences…)
 Kirloskar Brothers (agriculture and industrial devices)
 Tata Group and Mahindra & Mahindra (automotive
industry)
 Ranbaxy Laboratories (pharmaceuticals)
 RITES and IRCON (railways)
 Bharati Airtel (telecomunication, Zain accisition, 10.7
bln USD, 42 m subscribers in 15 African countries)
 Focus Africa Programme (2002)
 Supply low-cost, appropriate for developing country
Political motives
• Diplomatic influence
• UN security council pernament seat
• Competition with China
Rethoric of Indian assistance
• Rooted deeply in Cold War period (NAM),
• Values: equality, true partnership, long-standing
solidarity, mutual benefit and respect, more inclusive,
people oriented strategy.
• Historical and cultural ties are underlined: pre-colonial
trade, shared colonial history, Gandhi and Nehru
support for Africa liberation.
Added value of Indian engagement in
Africa
- India’s own experience in democratic development
and poverty alleviation;
- Low cost and appropriate technology provided;
- Comparative advantages in: pharmaceuticals, IT,
education and training, vehicles, rural electrification,
railways;
- Competitive profit seeking operations of Indian MNCs.
- Use of local components, workforce, materials in
India’s FDI in Africa.
Critisim
- Aid an instrument to foster own commercial and
geopolitical interests
- Indian policy towards Africa aims to develop India
- Lack of equallity and true partnership
- Indian investments harmful or exploitative
- Indian exports competitive to local production
- Inaccurate picture of long-lasting friendship
Thank you