Published On: Mon, Aug 22nd, 2016

India – Africa: Bound Together

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MBUYA ISAAC G. MUNLO, Malawi High Commissioner

India and Africa may be at different levels of development but the similarities in their social and economic structures, lay strong foundations for a solid partnership. India has always offered a hand up to Africa since the days of Jawahar Lal Nehru.

On the one hand, Africa has gone through a number of experiments like structural adjustment programmes, privatisation, land liberalisation, intellectual rights expropriation. In almost all cases it has ended up the worse. Africa is therefore looking for partnerships grounded in alternative and authentic theories.

When we look at trade with India, there are some innovative ideas like the Duty Free Tariff Preference Scheme providing tariff lines duty free, the Lines of Credit, but still the greater picture is that of trade imbalances, due to mainly focusing on single items, extraction industries. In the 2014 – 2015 period Africa contributed only less than 9 percent of India’s imports and trade imbalance with India is in billions of Dollars.

Considering the special relationship Africa has with India, the question that comes to mind is “Is it not possible to come up with a paradigm shift that looks at long term sustainability issues, with respect to trade not just normative trade but development focused trade encompassing such aspects as technology transfer, benefaction, value addition, joint ventures, skills development?” In 2014 a quarter of India’s pharmaceutical exports were shipped to Africa. Investing in pharmaceutical training, production and drug manufacturing in Africa could impact greatly on Africa’s health systems, create more jobs and increase investment.

Let us have a partnership that enhances variety other than duplicating the same tired global prescriptive approaches of the World Trade Organisation, EU etc. Looking at each other’s comparative advantages and nurturing them for long term benefits. Already the Confederation of Indian Industry (CII) has partnered with the Economic Commission for Africa to produce a publication that highlights key sectors on which India and Africa place the greatest levels of engagement.

It is sometimes worrying when one sees institutions of the south like Exim Bank for example relapsing into IMF, World Bank approaches or standards instead of creating alternative robust approaches. Have we reached the limit of creativity? By 2050 the joint population of Africa and India will account for 43 percent of the world’s total. This is a great opportunity not just for boosting trade and scaling up investment, but taking leadership to be creative and present alternative models of partnership. There is an African saying “If you keep on following you will never Lead.”

Africa recognizes needs to be competitive, that is why Integration is perhaps the most overreaching goal in the African Union’s Vision 2063.

In promoting African integration, a number of plans have been put in place as follows:-

Open Borders
The African Union Border Programmes Vision is ‘A united and integrated Africa with peaceful open and prosperous borders”.
It is putting in place legal systems, structures and processes that promote the perception of national boundaries as bridges other than barriers. Thus promoting flow of goods and services, movement of people.

Policies
Efforts are ongoing to formulate and implement coordinated, sound and authentic policies. The aim of continent wide policy frameworks is to look at how Africa’s integration into the global markets can best serve the objective of transforming the continents economies.

Peace and Security
The African Union integration agenda has put peace and security at its core. It appreciates that trade can only thrive in a peaceful environment.
The African Peace and Security Architecture (APSA) is built around structures, objectives, principles and values, as well as decision making processes relating to prevention, management and resolution of crises and conflicts, post conflict reconstruction and development in the continent. The main pillar of APSA is the African Union Peace and Security Council which is supported by various structures, the continental Early Working System, the African stand by Force and the Peace Fund.

Infrastructure Development
The significant deficit infrastructure on the African continent has resulted in increased production and transaction costs, reduced competitiveness of businesses and subsequently a reduced rate of economic and social development on the continent. The African Union launched the programme for infrastructure Development in Africa PIDA in July 2010. It is a flagship programme aimed at the development of regional and continental infrastructure (Energy, Transport, information and communication technology (ICT) and Trans boundary water resources. It is hoped to promote improved access to integrated regional and continental infrastructure networks and services.

The African market remains highly fragmented. The action plan for boosting Intra-African trade includes trade facilitation, trade policy, productive capacities, trade related infrastructure, trade finance, trade information and Factor Market integration.

To fast track the establishment of a Pan African Free Trade Area, a Tripartite Free Trade Agreement signed on 10th June 2015, led to the formation of EAC COMESA- SADC Tripartite Free Trade Agreement (TFTA) as an intermediary step. The 26 countries of the tripartite area represent 48 per cent of the African Union membership, 51 percent of the continental GDP and a combined population of 632 million. If the TFTA countries were one country, it would be the 13th largest economy in the world. Merchandise trade within the tripartite region grew from USD23 billion in 2004 to USD 55 billion in 2012. An increase of 140 percent.

It is clearly in the long term interest of all progressive nations, wanting to partner with Africa, to help it integrate, an integrated Africa is a reliable global partner.

MBUYA ISAAC G. MUNLO
Malawi High Commissioner

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