The groundwork has been laid for Indian investors who are looking to invest in Africa.
During a recent virtual conference hosted by the Confederation of Indian Industry (CII) and its partners, officials called for Indo-African partnerships to go beyond government-to-government cooperation and promote private sector participation in order to accelerate Africa’s development.
The Conference on Innovative Financing Mechanisms for Doing Business with Africa took place on 30 July 2020 and attracted more than 600 participants from over 45 countries. Besides Africa and India, there were also participants from the Middle East, Europe, and Asia, representing businesses, governments, financial institutions, and business promotion agencies.
Akhilesh Mishra, India’s Additional Secretary in the Ministry of External Affairs, urged the private sector to consider investing in youth and startups because those sectors have enormous potential for employment generation. He noted that, aside from the long-term funding traditionally provided as official development assistance, African countries will require more targeted short-term financing.
Bajabulile Swazi Tshabalala, Acting Senior Vice President and CFO of the African Development Bank Group, highlighted business potential in Africa, noting that the continent had great prospects for investors, with a growing consumer market that Indian firms cannot afford to miss.
“The positive outlook for Africa is reinforced by the establishment of the African Continental Free Trade Area (AfCFTA), which seeks to deepen regional integration across the continent and allow the free movement of people and trade across borders,” Tshabalala said.
Tshabalala said there was a tremendous opportunity for Indian industry to work together with the Bank in sectors such as power generation and transmission, energy, agricultural transformation, healthcare and pharmaceuticals, technology, transportation, and industrialization.
The Bank is seeking to expand the number of bankable projects in Africa and has set aside $100 million for project preparation activities in low-income countries. It is also keen to mobilize greater private sector participation in these projects from all countries, she added.
David Rasquinha, Managing Director of the Export-Import Bank of India, underscored the need to expand Indian financial inflows to Africa by expanding the Indian banking network. He said India and Africa could work together in areas such as healthcare and pharmaceuticals, the financial sector and infrastructure development.
Nana Spio-Garbrah, chief financing analyst from the African Development Bank’s syndications, co-financing and client solutions department, spoke on the Bank’s capacity to mitigate risk for foreign investors, especially during this era of COVID-19.
Spio-Garbrah also talked about the Bank’s Partial Risk Guarantee (PRG) and Partial Credit Guarantee (PCG), which has been upgraded to meet client needs better. She mentioned the Bank’s syndication services, particularly the A/B loan product, which allows B-lenders to benefit from the Bank’s Preferred Creditor Status. She also mentioned the Co-Guarantee Platform – a new cooperative of four risk mitigation providers and the African Union, which collectively pools their capacities to de-risk African projects.
Takashi Hanajiri, head of the African Development Bank’s Asia External Representation Office made a presentation on the partnership between India and the Bank, and the Bank’s COVID-19 Response Facility. Hanajiri pointed out the huge potential of the Africa Investment Forum and encouraged Indian partners to participate to find investment opportunities in Africa.
The panelists also included representatives from ECOWAS Bank for Investment and Development, and ABSA Bank, who introduced their financial services and products. Escorts Limited, one of India’s leading engineering companies, talked on the trilateral partnership between India, Japan, and Africa in the agriculture sector.
The conference was supported by the Indian Ministry of External Affairs, the African Development Bank, the Export-Import Bank of India, and other organizations.
The African Development Bank and India have a long-standing strategic partnership dating back almost 40 years to 1982, when India first joined the African Development Fund (ADF), the concessional arm of the Bank Group. A year later the country became a shareholder of the African Development Bank.