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Africa

Indian entrepreneurs are rediscovering Africa - not for its pre-historic forests and precious stones, but as the last of markets still largely untapped.

The second largest continent in area and third largest in population, Africa has a miniscule 1.94 per cent share in global trade. And that is precisely the lure for the Indian government and the country’s exporters.

While the government has announced its ‘Focus: Africa’ programme, Indian exporters are now busy collecting information, calculating risk analyses and increasing interaction with the continent, particularly the seven sisters of the Sub-Saharan region.

The efforts are part of the “market diversification” policy of the government to achieve at least one per cent of global trade within the next few years, according to Dr S Agarwal, executive director of the National centre for trade information of the Union commerce ministry. “And Africa welcomes such initiatives”, says the Kenyan high commissioner to India Mr Lazarius Ameyo. “Africa is changing. It is not only the dense forest lands and wildlife, there are new industrial centres coming up. In Kenya alone, there are 17 export processing zones.”

Though a major part of the continent is gearing up for a change, Sub-Sahara remains India’s focus in the primary stage with its seven countries - Ethiopia, Kenya, Nigeria, Ghana, Tanzania, South Africa and Mauritius — stealing the show. These countries together constituted about 69 per cent of India’s total bilateral trade with Sub-Saharan Africa in 2000-01, Dr Agarwal says.

The initiatives have, in fact, resulted in an increase in Indian exports to Sub-Saharan Africa to US$ 1,809 million in 2000-01 against US$ 1,345 million in 1996-97. But the figure remains insignificant as compared to the potential, he says. The government, as also the Indian export promotion councils are, therefore, highlighting the rich natural resources, huge shortage of skilled manpower leading to poor manufacturing activity and formation of regional economic groupings in the continent as emerging opportunities for Indian traders and investors. The government, according to Mr M D Rao, director, Union commerce ministry also wants Indian investors to set up manufacturing bases in the continent to avail duty-free access to the US market. “The US government has announced it will allow duty-free import of goods manufactured in Africa. But we are yet to utilise this opportunity,” he says.

Internal violence and political volatility in the African nations, however, remain a major hurdle. Mr Ameyo admits this, but attributes the negative image to projections by the media. “You name me one region not affected by violence, domestic or international. Foreigners are not the target of such violence. It is mainly between different tribes. In fact, all Indian residents in Kenya are quite well off,” the high commissioner assures. The outside world, he says, knows only a particular aspect of African life, as is portrayed by various TV channels. But there is more to it, “There are industries also... Big Indian corporates like Tata, Birla and Raymonds are there in Kenya for sometime now.”

In Nigeria, one of the most industrialised countries in the continent, 23 major Indian companies have set up shop and the government of the country is looking for cooperation with India in the software sector, says Mr Ogudugu, senior counsellor of the Nigerian high commission. With or without such assurances, the Indian exporters are making up their mind to penetrate the region.

A number of export promotion councils are encouraging their member exporters to re-explore Africa. Some EPCs, in fact, describe the ‘less developed’ status of Africa as a great opportunity for India. “The success stories of adventurous Indian business communities have stimulated a wave among businessmen to re-explore the fast changing Africa,” say sources.

India, with a one per cent share, ranks a low 18th among the major supplying countries to the region. The increase in trade relations, however, would not only benefit India, but would “greatly help African nations” as well, Mr Ameyo says. “Indian products, in many sectors like pharmaceuticals, are cheaper. But we do not get the price benefit as there is no direct sourcing of these products.”

The Indian traders, equally keen to enhance trade relations, feel that with the availability of direct shipping line between India and South Africa now, trade with Sub-Saharan Africa would become easier.

The language problem, they feel, can be overcome with the help of software available for quick translation of business correspondence between English and prominent African languages.