India-Africa trade is on the up, but that doesn’t seem to be reflected in the mood of investors.
At most forums, the release of yet another investment pamphlet is greeted with an apathetic shrug, the weighty document stowed safely in a briefcase and later quietly abandoned at the hotel.
But you can’t blame organisers for trying to drum up a little excitement. Wednesday’s AfDB meeting saw the arrival of a delegation drawn from India’s trade, diplomatic and business corps – and the release of an elaborately gift-wrapped report on India’s ties to the West African bloc, ECOWAS.
Delegates will be hoping that India’s African approach goes beyond wrapping a familiar product in glitzy paper. Despite being a member of the BRICS and any number of other emerging market groupings, the economic relationship between Africa and India has not exactly sparked optimism among delegates.
Nkosona Moyo, a former chief operating officer of the AfDB, said that both sides need to learn from failures and forge a new kind of relationship based around integrated African markets.
“Both parties have failed on the intended agenda, they’ve failed to deliver,” he said. “As we embark on trying to grow the cooperation between India and Africa, what can we learn from what I would call failed relationships?”
Anecdotal evidence offers a reason for the breakdown. Interrupting the panel for an impromptu presentation – slides and all – Indian businessman S. Kuppuswamy lectured the audience on what Africa can learn from India’s public private partnerships, summing up by concluding that the responsibility for failed projects lies with Africans.
That may well be true – and there has been no shortage of talk in Abidjan about moving projects from conception to completion – but few would argue that development is a one-way street.
Indian president Narendra Modi has made much of his country’s attempts to open up to business, but New Delhi’s decades-old reputation for stifling regulation, imposing trade barriers and government interference is well earned. That official attitude appears to have filtered down to the private sector.
“Getting loans or help from banks without collateral is a very difficult job. If I get a contract from Africa and if I have to get a line of credit from an African bank, no bank in India will accept it,” said a rueful Jitender Sachdeva, president of Indian electronic firm Skipper Seil.
Sumant Srivastava, a vice-president at Indian firm KEC, said that this lack of finance – with multilaterals such as the AfDB disproportionately funding projects – continues to hamper trade ties.
“Projects are conceived but not stacking up, and the main reason is the funding gap. Africa needs $93bn a year for infrastructure development. We are able to get money from multilaterals, but that is hardly able to cover 50%. We need to find innovative financial solutions to build investment.”
Even on this score, disagreement can be found. Tata Consulting’s Ajay Anand dismissed money as an irrelevance – arguing that the failure of the overall relationship is grounded in failed projects.
“African states are lacking a strong policy will to implement projects…people should ask governments that policy has to be strong to ensure completion of projects.”
So a relatively pessimistic morning had by all, but delegates only need to look at the trade figures to regain a bit of optimism. The WTO projects that bilateral India-Africa trade grew by nearly 32% annually between 2005 and 2011, with trade expected to hit US$90bn this year.
Perhaps consulting that weighty investment pamphlet might not be such a bad idea after all.