Africa 2063 The Africa We Want D R. R E N U M O D I C E N T E R F O R A F R I C A N S T U D I E S U N I V E R S I T Y O F M U M BA I

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1 Africa 2063 The Africa We Want D R. R E N U M O D I C E N T E R F O R A F R I C A N S T U D I E S U N I V E R S I T Y O F M U M BA I

2 The Future We Want: Agenda 2063 The African Union (AU) on its 50 th anniversary released a declaration titled The Future We Want: Agenda The document spells out AU s vision and plan of action for a long term development strategy at a time when the international finance architecture is changing rapidly and there are augmented flows of FDI to Africa beyond commodity producing sectors. The UNGA endorsed the document entitled, Transforming Our World: the 2030 Agenda for Sustainable Development, which lays out a roadmap for a post-2015 development agenda.

3 The Future We Want: Agenda 2063 The UN held the third international conference on July 2015 on the theme Financing for Development. In end July 2015, UNGA adopted a resolution The Addis Ababa Action Agenda of the Third International Conference on Financing for Development. The document affirms the role of domestic as well as private international capital flows and international development cooperation initiatives from the South as well as the North for financing development. The documents listed above provide a road map for Africa s future development in partnership with both the North and the South, and indicate potential areas of cooperation.

4 Our aspirations for the Africa we want Aspiration 1 - A prosperous Africa based on inclusive growth and sustainable development Aspiration 2 - An integrated continent, politically united, based on the ideals of Pan-Africanism and the vision of Africa s Renaissance Aspiration 3 - An Africa of good governance, democracy, respect for human rights, justice and the rule of law

5 Our aspirations for the Africa we want Aspiration 4 - A peaceful and secure Africa Aspiration 5 - An Africa with a strong cultural identity, common heritage, values and ethics Aspiration 6 - An Africa whose development is people-driven, relying on the potential of African people, especially its women and youth, and caring for children Aspiration 7 - Africa as a strong, united and influential global player and partner

6 Why Africa? India and Africa s historical linkages, their struggle against colonialism and the post Bandung consensus on South- South cooperation, has given way to pragmatism, economic diplomacy and beyond. According to Ernst and Young s Africa attractiveness survey' (2015) capital investments into the continent rose to US$128billion. Africa s share of global capital investments and job creation in 2014 was higher than in the past years. FDI into Africa was second only to the Asia- Pacific region.

7 Why Africa? As a result of rapid urbanization and a growing middle class on the continent sectors such as construction, hospitality, consumer products and telecommunications were the major draws in 2014 while traditional areas such as agriculture and infrastructure too continued to attract investments. It is estimated that Africa will grow at about 5 percent in 2016 but on its pathway to economic growth, Africa faces both external and internal challenges for financing development. The major external challenges include a decline in Overseas Development Assistance (ODA) and a marked decrease in demand for commodities by China- a major importer of natural resources from the continent

8 Why Africa? For Africa, India offers a significant avenue for bridging the financing gap-to fuel growth, generate livelihoods and reduce poverty. This it does through 4 avenues: 1. Trade 2. FDI (Foreign Direct Investment) 3. LOC s (Lines of Credit) 4. Grants

9 Indian Development and Economic Assistance Scheme(IDEAS) The Government of India (GOI), in , formulated the India Development Initiative (IDI), now known as Indian Development and Economic Assistance Scheme (IDEAS), with the objective of sharing India s development experience through (a) capacity building and skills transfer, (b) trade, and (c) infrastructure development. Department of Economic Affairs on behalf of Government of India had been extending Lines of Credit (LOCs) to friendly developing foreign countries. These LOCs were essentially Government to Government (G to G) credit lines as the credit agreements were signed between GOI and the Government of the recipient country.

10 India s Trade with Africa (USD billions) Items (April- Sep) India s export to Africa India s Imports from Africa India s Total Trade With Africa

11 India s Export and Import (April- September) Rank Country Export Import Total Trade Trade Balance 1 Nigeria 1, , , , South Africa 2, , , , Egypt 1, , Ghana , , , Angola , , , Kenya 1, , , Tanzania , Mozambique Algeria Sudan

12 Case Study: Cote d Ivoire Cote d Ivoire, on the west coast of Africa is the second largest exporter of cashew nuts in the world and India imports eighty percent of the product. These nuts are then processed in India and re-exported globally. The above statistic on India- Africa trade brings to light the urgent need for capacity building and transfer of technology for value addition to commodities in Africa. For the Africa rising narrative to continue, investments must be made in the infrastructure and manufacturing sectors and value added or finished products instead of raw commodities are exported in the global markets. In other words, India s role to further the Make in Africa agenda can potentially make a significant contribution to Africa s economic growth.

13 Industrialization can also provide employment opportunities for a rising population in a continent where growth rates, across the continent have dropped from the 2014 levels. Africa has the youngest population in the world. The continent s labour force is estimated to grow to 1 billion by 2040, which will be the largest in the world, ahead of both China and India. There is an urgent need to generate employment and upgrade skills in a continent with about 200 million people in the age bracket of 15 and 24 (i.e., about 20 per cent of the population).

FDI Equity Inflows and Outflow FDI Inflows During April 2000 to March 2015 FDI Outflow Cumulative (April 1996- March 2015 Country US$ mn Country US$ mn Mauritius 86,971.80 Mauritius 43211.

14 FDI Equity Inflows and Outflow FDI Inflows During April 2000 to March 2015 FDI Outflow Cumulative (April March 2015 Country US$ mn Country US$ mn Mauritius 86, Mauritius South Africa Mozambique Seychelles Sudan Morocco Egypt Kenya 21.7 South Africa Liberia 14.6 Libya Nigeria 13.1 Liberia Ghana 7.7 Kenya Egypt 3.3 Nigeria Tanzania 1.6 Tunisia Africa 88,230.7 Africa

15 Lines of Credit (LOC) The top ten recipients of Indian concessional loans through the Exim Bank s Lines of Credit (LoCs) are Ethiopia, Sudan, Mozambique, Tanzania, Democratic Republic of Congo, Mali, Senegal, Nigeria, Republic of Congo and Central African Republic with approved loans (in USD) of mn, mn, mn,523.04mn, mn, mn, mn, mn and mn, respectively. It is important to note that India s private sector engagements for project execution in Africa are not concentrated in resource rich countries alone! The point that just about 50 percent of the approved LoCs have been disbursed thus far has been an area of concern to both the partners and was addressed at the IAFS III in October 2015.

16 Lines of Credit (LOC) Ethiopia heads the ranking with a total of seven LOCs amounting to more than US$1 billion, which corresponds to 16% of the value of LOCs granted to Africa partners. The overall focus of LOCs are on energy, agriculture and infrastructure projects. In addition, a Line of Credit of US$ 500 million was extended to West African countries through ECOWAS Bank for Investment & Development (EBID) The LOCs have been the most important source of project financing in Africa. This has helped Indian companies enter the African market as well as expand their footprints in the continent. However, there has been a huge gap in the LOC commitments and disbursements.

17 Grants While India's grants to Africa increased significantly since , it needs to be noted that this increase has been in line with the overall increase in India's development assistance. Hence, while in each of the two fiscal years and , India provided more than US$40 million of grants to African governments, the respective shares in overall Indian grants and loans were close to 4.5 percent and 3.5 percent, respectively. Further sectors that are prioritised by grants are information technology, multi-sector projects and health accounting for 16%, and14% and 13% of grants to Africa, respectively

18 India Grants Africa (Grants) Country Donation Year Benin (LDCs) 100 tractors 2009 Central African Republic(LDCs) 100 tractors 2010 Two learning stations under the Hole-in-Wall Computer Education 2011 Chad(LDCs) 5,000 metric tonnes of rice 2004 Comoros (LDCs) 25,000 tonnes of non-basmati rice 2008 Democratic Republic of Congo (LDCs) Setting up an IT Centre of Excellence in Kinshasa 2010 Eritrea (LDCs) 5,000 metric tonnes of wheat ,500 metric tonnes of wheat metric tonnes of sugar 2003 Guiana (LDCs) Tata Steel also donated 10 Buses 2013 Liberia (LDCs) 15 buses 2014 Rwanda (LDCs) Solar electrification of 35 schools in rural two military vehicles 2014 Zimbabwe HIPC) 50,000 tonnes of rice tonnes of rice 2015

19 India Grants Africa (Cash) Country Purpose US$D Year Benin (LDCs) Health 1,000, Education 1,000, Botswana(HIPC) Health 22.5 mn 2006 ( ) - Education 22.5 mn 2006 ( ) Burundi (LDCs) Disaster relief US$ 100, Cape Verde (LDCs) Fight dengue fever. US$ 50, Comoros (LDCs) Torrential rains US$ 100, Democratic Republic of the 60 Sonalika tractors with accessories US$ 0.66 million Congo (LDCs) & spares worth - Medicine US$ 1,000, Gambia (LDCs) Health and Education US$500, Malawi (LDCs) towards flood relief US$ 0.2mn Setting up of capacity building US$ 5,000, projects. - medical equipment US $ 1.5 million 2010 (1,500,000) - mammography machines and US $ 1.5 million 2010 ultra-sound (1,500,000) - medicines and drugs US$1,000, tractors and implements supplied US$1,000, Namibia(HIPC) Twin Faculties of Mining Engineering US$12.16 Millions 2014 and Information Technology Niger (LDCs) food crisis USD 100,000/ purchase of two television cameras for 5.8mn 2011 the National Television (5,800,000) Republic of the Congo (HIPC) Medicines US$ 2,00, humanitarian assistance and disaster relief US$ 500,

20 Grants Globally Grants Amount (Rs. crores) Aid to Bangladesh Aid to Bhutan Aid to Nepal Aid to Sri Lanka Aid to Maldives Aid to Myanmar Aid to Afghanistan Aid to African countries

22 India Africa Forum Summits (2008, 2011 and 2015) The India Africa Forum Summit I (IAFS-I), India announced a grant of US$D 500 million to assist capacity building in Africa, setting up specialized institutions, extending scholarships, training programs and implementing the Pan- African e-network project. At IAFS-II, India announced a grant of US$D700 million for new training facilities, and a US$ 300 million LOC to support the development of an Ethio-Djibouti railway line. IAFS III, India announced a grant assistance of US$D 600 million. Include an India-Africa Development Fund of US$D 100 million and an India-Africa Health Fund of US$ 10 million and 50,000 scholarships.

23 IAFS I: April 4th 8th, 2008, LOCs- US$D 5.4 billion in new Delhi, India (14 African representatives country) IAFS II: May 24th to 25th, 2011, LOCs: US$ 5 billon, Addis Ababa, Ethiopia (15 African representatives country IAFS III: October 26th -29th, 2015, LOCs: US$ 10 billion, New Delhi, India (54African representatives country India has the good fortune of imparting education and training to around 25,000 African students. Capacity building institutions to, build and strengthen capacities at the pan- African, regional and bilateral levels.

24 India has helped Africa through $7.4 billion in concessional credit and $1.2 billion in grant since 2008; training of 25,000 young Africans in India in the past three years; the process of creating 100 capacity-building institutions; and developing infrastructure, public transport, clean energy, irrigation, agriculture and manufacturing across Africa. Partnership with Africa would be further strengthened through a new concessional credit of $10 billion for the period ; and an assistance grant of $600 million. The latter would include $100 million for India Africa Development Fund, $10 million for India- Africa Health Fund, the financing of 50,000 scholarships in India for the next five years, funds for the expansion of the Pan Africa E- network, and of institutions of skilling and training across Africa.

25 Since the IAFS II (2011) over 24,000 scholarships across 300 training courses conduced across 60 institutions have benefitted Africans in subjects such as IT, renewable energy, marine hydrography and agriculture. In , 900 slots have been extended to countries in Africa by the Indian Council of Cultural Relations (ICCR) under the Indian Technical and Economic Cooperation (ITEC) program. The top five countries in terms of recipients of scholarship slots are Mauritius (97), Kenya and South Africa (52 each) Ethiopia (50) followed by Mozambique (34)

26 In view of the slow progress of projects under IAFS I&II, when the Committee desired to know whether any remedial measures were undertaken by the Ministry, the Ministry submitted in a post-evidence reply as under: The Ministry has been constantly writing and following up with the Host countries to fulfill their obligations for providing land, building etc. for hosting the institutions. While efforts are made to resolve outstanding issues through bilateral engagement wherever possible, Ministry will also engage with the African Union and/or the concerned Regional Economic Community to get expedited response from the host countries or, if necessary, to find an alternative location.

27 THANK YOU!

The Second Japan-Africa Business Forum TICAD and Business: Feedback from the Yokohama Action Plan to the Nairobi Declaration July 25, 2017

The Second Japan-Africa Business Forum TICAD and Business: Feedback from the Yokohama Action Plan to the Nairobi Declaration July 25, 207 Takeshi Osuga Ambassador, Assistant Minister, Director-General