Vice-President dares businesses on India/Africa trade
Vice-President Saulos Chilima has challenged delegates attending the 13th Confederation of Indian Industry to make the most of the India/Africa trade partnership which has a market potential of $5 trillion.
Chilima said tapping into this market to its fullest potential would require removing trade barriers that are hindering growth.
He was speaking when he delivered his keynote address during the 2018 Exim Bank Conclave underway in New Dehli, India.
Chilima noted that, despite Africa and India’s longstanding trade history, the India-Africa trade gap is still wide, with Africa continuing to export raw products with minimal value addition.
He said creating a win-win situation would require removing trade barriers that are hindering growth, including lack of access to trade finance, transport and logistics problems and informal controls in the form of non-tariff barriers.
“Non-tariff barriers have also posed a major challenge to African traders because it takes time to process Sanitary and Phyto-Sanitary (SPS) certificates,” he said.
He then called on the government of India to speed up processing SPS issues with African traders to promote India-Africa trade which would translate into a win-win situation for both partners.
He said investing in Africa is a worthwhile decision as many African countries have preferential market access to the United States of America (USA) worth $18.5 trillion through the African Growth Opportunity Act (Agoa), European Union [$16.5 trillion through Everything But Arms initiative] and China $10.8 trillion.
“The African market is substantial and worth investing in. Besides the $2.5 trillion, which is accessible regardless of a country of investment through regional trade agreements, making Africa your investment destination of choice is, therefore, a wise decision,” Chilima said.
India’s Minister of Commerce and Industry, Suresh Prabhu, said India is committed to continuing to partner Africa and assisting member countries based on need.
Prabhu said there is potential for both regions to benefit through experience sharing.
Since the first Exim Bank Conclave was held in 2005, participation of African countries has grown from 17 to over 37, leading to investment projects reaching a peak of 549 projects valued at $84.4 billion.
India is an important source of Foreign Direct Investment (FDI) in Africa. Between 2010 and 2015, Indian FDI to Africa amounted to $17 billion.
India also remains a major destination of African outward investment with Mauritius leading the way as a source of FDI to India.
Since 2010, Africa’s exports to India have increased by 28 percent while imports from India have increased by 93 percent.
Africa’s exports to India are projected to grow from $27 billion in 2016 to $50 billion in 2022.