With the first shots having been fired in a trade war between the United States and China, Africa is looking to implement a free trade agreement which will protect and promote the economic interests of the continent as a regional bloc. Speaking recently at the Commonwealth Business Forum in London, Kenyan Minister of Industry, Trade and Cooperatives Adan Mohamed admitted that, if implemented, the African Continental Free Trade Area (AfCFTA) could provide an effective counterpoint to the trade tariffs imposed by the United States and China on each other. It is hoped that AfCFTA will boost business and intra-African trade, which currently stands at less than 20 percent. Encompassing a market of a little over a billion people, with a gross domestic product (GDP) of $2.5 trillion, there is no doubt that the agreement could work wonders for Africa, allowing it break free of dependency on bigger, wealthier countries, like China and India. It will promote a thriving manufacturing sector, greater economic and commercial diversification, and allow for accelerated industrial development across the continent. As of now, final negotiations are ongoing – 22 countries need to formally come on board for AfCFTA to be implemented within the next 18 months.
China, currently the biggest foreign influence in Africa, has shown itself to be willing and cooperative as far as this venture is concerned. Top officials have stated that AfCFTA is compatible with the Belt and Road Initiative, Chinese President Xi Jinping’s flagship geopolitical project. In Ethiopia on May 13, China’s top legislator and chairman of the Standing Committee of the National People’s Congress (NPC), Li Zhanshu emphasized that China will support the African Union’s attempts at closer regional and economic integration. On a similar note, China’s Ambassador to Ethiopia Tan Jian stated that China was willing to share its development experiences with less skilled partners, but had no desire to lecture anyone or impose its ideas on any third party. The African Union, for its part, has requested enhanced support from China in the fields of infrastructure, education and technology – key sectors in which assistance is required if the continent is to achieve its Agenda 2063.
With so much potential on the cards, small wonder that India has no desire to be left out of the African picture. Even as the country embarks on a new and innovative path of informal summits (with China, for example) and religious and cultural diplomacy (directed at Nepal, in particular), India has been focusing on the African continent with a vigor rarely seen until now. Indian President Ram Nath Kovind – who has made no secret of the fact that he considers Africa to hold a special place in his heart – has visited the continent three times since he was sworn in. Indeed, all his overseas trips – which also number three in total – have been to Africa. In October 2017, Kovind traveled to Djibouti and Ethiopia. In March 2018, he visited Mauritius and Madagascar, and in April, he toured Equatorial Guinea (incidentally India’s fourth largest oil and gas supplier), Swaziland, and Zambia.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The visits came in the face of distinct evidence that some African countries do not quite see the attractiveness of India as a potential investor. The Seychelles, for example, failed to ratify an agreement with India on the construction of a military facility on Assumption Island only weeks after Indian Foreign Secretary S. Jaishankar signed a revised pact for its development, including the construction of an airstrip and a jetty for the Seychelles Coast Guard and Indian Navy. This has not stopped India for pushing ahead on all fronts. The outcomes of Kovind’s visits included a $100 million line of credit for defense procurement by Mauritius and greater cooperation in the marine resource management and marine connectivity in Madagascar. In Equatorial Guinea – where Kovind’s arrival marked the first-ever visit by an Indian head of state – India announced its decision to open an independent diplomatic mission in the capital of Malabo. The announcement came on the heels of a government statement to the effect that 18 new embassies will be opened in Africa, increasing the number of resident Indian missions from 29 to 47.
In yet another first, India will be constructing convention centers across 21 African countries, beginning with Niger in Western Africa. The goal here is to enable Niger to host the African Union Summit in 2019. Convention centers will also be set up on priority basis in eight other African nations — Uganda, Zambia, Malawi, Burkina Faso, Togo, Gabon, and Liberia — and on a more phased basis in the remaining 12 countries. This is the first time that India has expanded cooperation with Africa in the realms of this kind of infrastructure. In the past, India helped to build the Presidential Palace and the Parliament in Ghana. Today, it is currently helping to construct the Parliament building in Swaziland, in the aftermath of Kovind’s April visit. Indian investment in Africa is also being ramped up, with over 140 Indian enterprises (from Wipro to Mahindra and Mahindra) investing over $4 billion in South Africa alone. Sub-Saharan African countries have also reached out to India to undertake rural electrification – from financing and technology transfer, to detailed project reports and execution. This comes on the heels of the recent announcement that, as of April 28, electricity had finally reached all of India’s 597,464 villages – one step closer to universal household electrification.
That India is diversifying the ways in which it can enhance economic cooperation — and promote its diplomatic profile — in Africa is significant. Recent figures are impressive: India has extended 152 lines of credit to the tune of almost $8 billion to 44 African countries, for developing agriculture, infrastructure, clean energy, and manufacturing. The AfCFTA has been welcomed as promising for Indian enterprises and industries, while the idea of a separate free trade agreement has also been tossed around. Indian leaders are currently giving Africa a lot of space in their international travel agendas. Vice President Venkaiah Naidu is scheduled to visit Botswana, Malawi, and Equatorial Guinea in October. Prime Minister Narendra Modi is set to visit Egypt sometime later this year.
This kind of attention is long overdue. While India might not have the financial clout of its larger neighbor, these steps are welcome ones, in that they allow for a greater strategic and economic flexibility in bilateral ties. How New Delhi chooses to capitalize on this is a question which only time can answer.
Narayani Basu is an author and independent foreign policy analyst, with a special focus on Chinese foreign policy, and resource diplomacy in Africa and Antarctica.