Evolving India-Africa commerce relations: Ghana’s lot
At a time when the Eurozone is wading in sovereign financial crisis, local debts situation in the US and economic meltdown in China, India seems to be taking advantage of the extant situation and enhancing economic and trade partnerships with Africa, though with a flexible hand. Ghana, India’s friend in the sub-Saharan region, has also positioned itself strategically to benefit from this opportunity. Effah Amponsah writes.
Hon. Hannah Tetteh, Minister for Trade and Industry with Mr Anand Sharma (left) Current Union Cabinet Minister in charge
of Commerce and Industry and Textiles in the Government of India
As a marketing slang for a national brand, India calls itself ‘a land of limitless opportunities’, summarising the endless prospects the nation has to offer its people and other partner-nations that engage with India in bilateral or multilateral cooperation.
At the recent India Show held in Accra, India made its intentions clear to the rest of Africa including Ghana, that it plans to offer the continent an enhanced economic and commerce relations that has a competitive edge over other trade partnerships.
The two-day event showed how entrenched India is in its bid to do business with Africa to position the latter as an indispensable trade partner in the world of commerce.
Various sectoral discussions were held, including the area of food security and inclusive development, mostly. Modern agricultural practices, accessibility and affordability of healthcare and pharmaceuticals, mining and minerals, chemicals, automobile, infrastructure and construction, textile, power and energy were some of the topics raised during the event. The deftness and acumen exhibited by resource persons at these sectoral and roundtable discussions showed a glimmer of hope in the India-Africa trade and economic relations.
It is important for India to direct its foreign trade to Africa in these times of economy struggle for the Eurozone, US and China. “Africa remains India’s top priority and we would look to energise the relationship through greater diversity and depth,” Dr. Manmohan Singh, Prime Minister of the Government of India has said in recent times. During the 8th edition of CII EXIM Bank meeting on India-Africa Project Partnership, Anand Sharma, India’s Minister of Commerce, Industry and Textile, reiterated India’s objectives
“India and Africa are the driving forces of global economic recovery and the Indian government would fast-track the establishment of the specialised capacity building institutions on the continent.”
“We are committed to fulfilling the developmental aspirations of Africa,” Minister of State for External Affairs, Preneet Kaur also told African ministers and entrepreneurs at the opening of the meeting. This meeting was focused on how India-Africa partnership could be aligned further to create valuable possibilities towards building India-Africa partnership.
From all intents and purposes, the Asian country has an ‘open-secret’ to unseat the US and China as the world economic super powers permanently in the near future. Against all odds, the nation has made tremendous strides when it comes to initiating win-win partnerships with other interest parties, especially in Africa.
In the last decade, the trade relations between India and other African nations have reached a crescendo, thanks to the mutual understanding between the two sides, stemming from the spirit of South-South cooperation.
India’s economic growth and Africa’s economic resurgence have created new possibilities for partnership for the two parties.
Mr Anand Sharma, Current Union Cabinet Minister in charge of Commerce and Industry and Textiles in the Government of India
During the 2nd Africa-India Forum Summit (AIFS) in 2011 in Addis Ababa, Ethiopia, the most refreshing cooperation between the two parties emerged, as the Indian Prime Minister met African leaders to find ways to revitalise economic cooperation between his country and the region of Africa. This resulted in India’s announcement of US$ 5 billion for economic cooperation with Africa over three years. Since then, trade agreements have been signed with almost all West African nations.
From all intents and purposes, the Asian country has an ‘open secret’ to unseat the US and China as the world economic super power permanently in the near future.
African economy, mainly driven by relatively strong commodity prices, substantial external capital inflows and a continued expansion of demand and investment from Asia, is rapidly improving. Reports say among the continents in the world, Africa has made the greatest stride in terms of percentage growths in recent times. This explains the current situation of Africa, which is seen as the safe haven for the industrialised economies, resulting in the influx of MOUs, initiatives, partnerships, action plans and the like, between many African countries and some developed economies.
Foreign Direct Investments (FDIs) have surged in many African nations in recent times, as the existence of untapped resources for growth. Moreover the improving economic managerial skills have proved to Western and emerging Asian countries that Africa is a reliable business partner to deal with and a sure place to invest.
India has invested US$ 47 billion in Africa in recent times with 40% in West Africa and intends to shoot its investments in the sub-region from US$ 20 billion to US$ 40 billion by 2015.
The opportunities that Africa has to offer can be assessed from the fact that by 2020, Africa’s collective GDP is projected to touch US$ 2.6 trillion, with combined consumer spending amounting to US$ 1.4 trillion and a number of working age population estimated at 1.1 billion in 2040. With a promising future for African economies, external investors, economic and foreign trade partners, the world is assured of a rise in the scale to a balance level, where the benefits of relationships would not always be skewed to the benefit of one party.
Trade and economic partners like India will no doubt endeavour to maintain a balance of interest and mutual benefit in its dealings with Africa, if not soon, in the near future. Ghana is one of India’s friends in the sub-Saharan region benefiting tremendously from the South-South cooperation and bilateral relations with the Asian country. Economic and commercial relations between the two countries are on an upward trajectory.
Official figures show that bilateral trade between India and Ghana in 2010/2011 stood at US$ 818 million, an increase of 52% over the previous year. For the year 2012, Rajinder Bhagat, the High Commissioner Of India to Ghana said the bilateral trade between the two countries is projected to be US$1.2 billion.
On GIPC’s facts sheet, India currently lead the pack of countries that have invested heavily in diverse sectors in Ghana’s economy. As at the close of 2011, India alone had established 548 projects amounting to US$ 550 million dollars of investments. The Indian Government has to date extended US$ 228 million lines of credit to the government of Ghana.
The credit has been used for the construction of the Flagstaff House, the expansion of the railway sector, agro-processing, fish processing, waste management, rural electrification, and the establishment of a sugar-processing plant. Not only has Ghana offered India a safe haven for investments, it has also proven to enjoy a healthy economic growth.
This confirms that Ghana is able to meet the requirement of any economic partnership head-to-head. A general prediction for the future is that most developed economies would be focusing on establishing trade and economic relations with countries whose economies are developing and can offer a competitive advantage with win-win partnerships.
Ghana is gradually – albeit, on an increasing rate – positioning itself economically to stand on a pedestal of equal benefits from its trade and economic relations with India.
“Ghana’s investment in the diversification of the economy positions [the country] on a good pedestal to enjoy robust, sustainable economic growth in the future,” Hannah Tetteh, Minister of Trade, Industry and Private Sector Development told a 200 member Indian delegation, - the biggest ever to visit Africa from India –when they participated in the just-ended maiden India Show in Accra.
Ghana’s macroeconomic performance is very impressive and is widely recognised as the current fastest growing economy in the world. Its attainment of a staggering double-digit GDP figure of 14% gives it an upper hand over its contemporaries, at least in the West African sub-region. No doubt Ghana has won the hearts of Western and now Asian countries, considering the strides it is making as a middle income economy.
Ghana, like other African countries, offers myriads of natural resources for harnessing and exploitation. The nation also possesses a developing human resource asset that only needs training and expertise tutelage to be at par with human resources in developed economies. State-of-the-art technologies are also needed to harness and add value to the various products emerging from the sectors of the economy. It is imperative that the India-Ghana trade and economic relationship adopt a fresh paradigm and outlook to make their relations a more mutually beneficial one.