“India is a trusted and closer partner in the journey to make Africa a future global powerhouse under Agenda 2063″, India Prime Minister, Narendra Modi at Johannesburg 2023, BRICS Meeting.
In January 2021, The African Continental Free Trade Area (AfCFTA) was officially launched and became the world’s largest free trade area with a population of 1.3 Billion. The “agreement” had brought together 55 countries under 8 Regional Economic Communities to boost Intra-trade between African countries by eliminating trade barriers enabling the free flow of goods and products among the member states. As for now, the intra-African trade counts 13.2 percent. The agreement also gave preferential markets access to products originating within the member states through the Rule of Origin(RoO). Through RoO, the protocol intended to stimulate the agricultural sector that employs more than 230 million people in Africa, thus creating robust raw materials to feed the Industrial sector in Africa as Africa contributes only 1.9 percent of the global manufacturing sector.
What Africa has achieved so far in AfCFTA
Through AfCFTA; the intra-African trade is projected to be boosted to 52.3 percent by 2050, eventually, this projection would stimulate African GDP growth by 7 percent every year. This GDP growth is estimated to lift 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others who live under $5.50 a day. However, the reality seems slightly different from the expectation as Africa’s GDP slowed from 4.1 percent in 2022 to 3.1 percent in 2023, while most of the major factors that contributed to the decline of the GDP were typically external. These factors were the food inflation that led to the Russian invasion of Ukraine, Global Climate change and extreme weather events on agricultural productivity and power generation, conflict, and political instabilities.
India and Africa: The Sisters
Inter-trade
Africa plays a major role in global development due to its population and possession of abundant natural resources. Africa is the world’s second-largest and second-most-populous continent after Asia. It possesses 30percent of the global minerals reserves, 8 percent of the global natural resources, 12 percent of the world’s oil reserve, 40 percent of the world’s gold, and 65 percent of the world’s arable land.
India is Africa’s third largest trading partner after the European Union and China as in 2023, the inflow-outflow trade reached 103 Billion. India’s top export products in Africa are machinery and transport equipment, pharmaceuticals, textiles, automobiles, mineral fuels, oils, and wood products, while Africa exports to India, metallurgical goods, raw cotton, fruits, crude oil, precious stones, and ferro-alloys.
For Africa, India’s contribution in its global exports and imports was 6 percent and 5.6 percent, respectively, while the contribution of Africa in India’s global export and imports lies at 9.6 percent and 7.8 percent respectively.
What Role has India play to boost AfCFTA
“I invite the representative of the African Union to take his place as a permanent member of the G20”, Prime Minister Modi said during the 2023 G20 Summit in India.
In July 2018, Prime Minister Narendra Modi addressed the Ugandan Parliament, in what it was then famously known as the “10 guiding principles for India-Africa Engagement Speech”. In the speech,Prime Minister Modi advocated partnership in multilateral forums rather than bilateral partnership, a few years later Africa was granted permanent member status in G20 in September 2023 thanks to much effort from the Indian government. What India did for Africa gives a strategic potentiality for India in global south geopolitics.
The G20 represents 75 percent of the world’s GDP, thus being a member of Africa will become an active contributor to discussions reshaping the global destiny. For instance, G20 contributes 78 percent of the world’s greenhouse gas emissions, as a G20 member, Africa could contribute to and empower the global green transition agenda as for now on average, African countries are losing 2-5 percent of GDP and many are diverting up to 9 percent of their budgets responding to climate extremes. By 2030, it is estimated that up to 118 extremely poor people (living on less than US$ 1.90 per day) will be exposed to floods, droughts, famine, and extreme heat specifically in Africa. This will automatically place additional burdens on poverty alleviation efforts.
For the AfCFTA to achieve its full objective, an agricultural sector that plays a central role in the African economy has to function fully. Agriculture contributes 35 percent of Africa’s GDP and employs about half of its people. And for that, Africa has to begin seriously addressing the effects of climatic conditions in the Agricultural sector at G20 Summits.
Becoming a G20 member gives Africa a crucial role in ensuring the AfCFTA and Agenda 2063 are achieved successfully.
What Role can India play to ensure AfCFTA achieves its objectives
“Three, we will keep our markets open and make it easier and more attractive to trade with India. We will support our Industry to invest in Africa”. Prime Minister Modi addressed the Ugandan Parliament in July 2018.
In 2023, 58 percent of the population in Africa was exposed to moderate or severe food insecurity. Approximately 1 in 5 faced hunger in Africa. Regionally, Africa leads the percentage of the population facing hunger. At the same time, India has been investing in agro-industry in Africa for a while focusing on human resource development, capacity building, and agricultural technology.
Recently, more than 80 Indian agricultural companies began investing in Africa after the “99 Years Land Lease Offer”. This company invested around US$ 2.4 billion in buying or leasing huge plantations mostly in East African regions while most of the food grain grown from the plantations is exported back to India. There have been a lot of complaints concerning this agreement as it is pictured as a “Farmland Grab”.
India has to settle this “controversial deal” with African countries as it darkened the good image of India in Africa.
As much as 80 percent of the food production in Africa is from smallholder’s farmers, India could advocate the Agri-tech initiatives for small-holder local farmers by digitizing and empowering modern technologies in Africa. As India has invested in pharmaceutical and transportation sectors in Africa, it could invest in agro-industry and capacitate the local farmers through the use of more sophisticated technological equipment such as drones and AI in creating agricultural production, yield prediction, and tracking the health of soil and crops. There is a huge market of Agro-technological industry as Africa struggles to feed itself and fight the food crisis. By 2030, intra-African agricultural trade is projected to increase by 575 percent if import tariffs are eliminated. Currently, the continent spends a staggering US$ 75 Billion on food imports each year. India should invest in Africa in Initiatives such as the Indian National Agriculture Market Scheme (e-NAM)and take the opportunity and save the future of Africa from food insecurity by modernizing Africa’s agricultural sector.
India-Africa relations are getting much better. Africa accounts for 17 percent of the global population and is projected to 25 percent by 2050; for India to become a global superpower, Africa is the best partner to have. Meanwhile, for Africa to fulfill the Vision, “The Agenda 2063: The Africa we want”, India is a resourceful and “must” partner to share the vision with. The Minister of State of Defense once quoted saying “If India and Africa are able to synergize energies and initiatives and adapt to a changing world, the 21st century could surely belong to them”.
