India-Africa trade on the up

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    au text South Africa’s trade and industry minister Rob Davies (middle) and African Union Commission chairperson, Nkosazana Dlamini-Zuma (right), at the 3rd Africa-India Trade Ministers Meeting.

    Sharma text India’s commerce and industry minister, Anand Sharma, said he was optimistic the trade target of $100-billion (R999-billion) between Africa and India would be met by 2015.
    (Images: Ray Maota)

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    Ray Maota

    African and Indian leaders met at the third Africa-India Trade Ministers Summit held in South Africa’s Johannesburg, Gauteng, on 1 October 2013, to discuss how Indian and African countries can use their trade agreements to better Africa.

    African officials called for more investment from India as the continent is looking to industrialisation for development, while Indian officials hoped that India’s bilateral trade with Africa would reach the targeted level of US$100-billion (R999-billion) by 2015.

    Successful emerging economies

    Dr Nkosazana Dlamini Zuma, chairperson of the African Union Commission, said: “If we consider the evolving geopolitics of our times, according to the last Human Development Report – The Rise of the South – it is believed that by 2020, the joint GDP of Brazil, China and India will overtake the combined economies of the UK, the USA, France, Canada, Italy and Germany.

    “It is clear … that emerging economies are here to stay and their influence on the world economy is not only significant today, but also that it will continue to grow in the future.”

    She also said that both parties could increase cooperation in areas such as infrastructure and human resource development to enhance economic ties. She was positive about India’s move to provide scholarships to 22 000 African students over the next three years.

    Trade target: $100-billion

    Anand Sharma, India’s commerce and industry minister said: “We will hopefully be reaching the trade target of $100-billion (R999-billion) by 2015. It is a modest target.”

    India-Africa trade, which stood at barely $5-billion (R50-billion) a decade ago, was more than $70-billion (R699-billion) in 2012. India is currently Africa’s fourth-largest trading partner, while Africa is India’s sixth-largest partner.

    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.

    South African trade minister, Rob Davies, said that both India and Africa should now focus on quality of trade, saying “Indian imports have risen. We continue to supply raw material. We need to supply more value-added products.

    “We need to reposition ourselves from being producers and exporters of primary products and importers of finished products to become industrial producers and exporters.

    “We need another leg to stand on.”

    Burgeoning exports

    Of the total volume of imported gas and oil in India, more than 20% was from Africa said Sharma.

    Indian exports to Africa include petroleum products, automobiles, pharmaceuticals and telecom equipment. Imports are crude oil, gold, raw cotton, precious stones, and textile yarn.

    Trade and Industry Director-General Lionel October 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.”

    Intra-Africa trade

    Davies further noted that the continent needed to boost intra-African trade to extend the benefits to the continent’s citizens.

    “The partnerships between other emerging economies and Africa would enable Africa to exploit resource value addition, critical skills transfers, poverty eradication and take advantage of the fact that emerging economies were growing ahead of developed countries,” said Davies.