Africa, India pledge more trade ties

(Image: GCIS)

Davies addressed the opening of the 3rd Africa-India Trade Ministers' Meeting in Johannesburg on Tuesday. The high level gathering is being attended by ministers of trade from several African countries including Nigeria, Ethiopia, Benin, Namibia, Senegal, and Libya, among others.

"Our relations with India are undisputed. We have been partners for many years and our trade relations continue to grow from strength to strength," said Davies.

At the gathering, he called for India to help Africa become "industrial producers" by forging a mutually beneficial relationship.

"The continent of Africa needs to industrialise. The option of simply producing value added products and exporting those to the developed world is no longer viable. The rich world remains immersed in low growth and in fact is trying to industrialise itself," Davies said.

Africa needed to have another leg which builds on internal markets. However, the problem with mobilising internal markets in Africa was linked to colonialism which divided the continent into 54 countries.

"As individual countries, even the biggest of us ... don't really have the basis of a domestic market of its own of the scale of India or other emerging economies do," said Davies.

The minister was adamant, despite India's weak growth in 2012 and this year, the target of achieving US$90bn total trade between Africa and India in 2015 was still a realistic one.

"In 2011, Africa and India's bilateral trade reached US$60bn, suggesting we are on track to reach that target."

But Davies also said South Africa needed to pay more attention to the quality and content of that trade.

Supplying raw materials... needs to change

"It's not just the question of content, it's a question of what we are trading. We need to record that while Indian imports in Africa have risen by an average of 14%, they still predominantly (import) mineral fuel, lubricants and gold. In other words we continue to supply raw material and this needs to change."

This was echoed by African Union Commission Chairperson Dr Nkosazana Dlamini Zuma, who acknowledged India as an important partner in efforts to promote regional integration in Africa, but said trade needed to be balanced.

"In addition, while calling for more Indian foreign direct investment in Africa, such investment should be diversified and encourage local private sector participation, particularly for women and Africa's growing youthful population," Dlamini Zuma said.

"We look forward to these investments contributing to Africa's agenda of promoting industrialisation and value addition to its raw materials within the continent prior to their exportation and to the development of African skills and know-how."

India's Commerce and Industry Minister Anand Sharma said the Asian country was committed to play a meaningful role in Africa's development.

"In 2012, Africa registered a strong growth and India had a bad year but our trade continues to be strong. We need to ensure not only our growth should be sustainable but it must be inclusive.

"We are accountable to the millions of our people who we want to be economically independent," Sharma said.

India has begun investing in the energy sector in Africa as well as in mining, including uranium and hydrocarbons, precious metals and gemstones, especially gold and diamonds.