Background

1. Africa is a continent with various opportunities such as natural resources, demography and socio-economic development which attracts global attraction and competition.
2. According to IMF, 11 of the world’s fastest-growing economies are in Africa, with many of the nations recording high growth rates.
3. Various countries including India and China have been investing in Africa to tap such potential. This led to widespread investment and development which made the African leaders welcoming the competition.
4. Competition between India and China is for new markets, agricultural land and access to natural resources.

China’s strategy in Africa

1. China with its economic might has invested heavily in various infrastructural projects in Africa and became a strong player in Africa.
2. China started its economic liberalization way before India and with huge manufacturing base made deep inroads into Africa and devised effective strategy to exploit the natural resources in Africa. This created a strong lobby for China in Africa.
3. Since independence, India followed the non-interventionist approach in Africa. However, China established a military base in Djibouti and acts as a net security provider in the region.
4. The African countries have the huge demand for manufacturing and human resources which China has been effectively utilizing to establish a dominance.
5. China has also been leveraging its permanent member status in UNSC to convince African countries that it will effectively tend to their concerns in the United Nations.

India’s strategy in Africa

1. China has made deep inroads into Africa than any other country. But its dominance is slowly being replaced by India’s growing involvement in the region.
2. India has focussed on showcasing its cultural and historical ties with the region to improve the trade relations with resource-rich countries such as Sudan, Ethiopia, and Zimbabwe.
3. India’s soft power strategy has been successful which is evident in countries like Sudan where Indian companies have attained near complete control of the local oil and natural gas industry.
4. In Zimbabwe also, China’s dominance in the energy and resource sectors is being replaced by both state-owned and private Indian corporations.
5. African nations increasingly prefer India over China because of following reasons

• Chinese companies utilize Chinese workers instead of local people = No employment creation. But India employs local people and provide them with skills.
• Chinese companies don’t care about environmental protection, instead only the profits.

Chinese loans come with the prerequisite that only Chinese technology shall be utilized.

Way forward

1. Although China has a larger presence in African economy than India, there are growing opportunities for India to improve trade relations with Africa such as initiatives like Asia-Africa growth corridor proposed by both India and Japan for improving development and people-people partnership.
2. Africa is key to India’s economic and maritime interests in the Indian Ocean region. The Prime Minister’s emphasis on the “blue economy initiative” which aims to build on maritime trade links between India and the countries situated along the Indian Ocean is significant.
3. Africa’s automotive sector is growing on the back of rapid urbanisation, a growing consumer base with rising disposable income and a huge regional market.
4. It needs investments for creating infrastructure in ports, roads and railways, and training programmes to build a skilled labour force.
5. Therefore, Our expertise and human resources in building roads, airports, ports, railways, economic zones and industrial corridors should be shared.
6. India must not overlook the prospects of commercialisation of Indian innovation and technology in Africa.

• For instance, a unique opportunity lies in Africa’s agriculture sector which suffers from low productivity, limited use of technology, lack of high yielding varieties of crops and good quality seeds.
• This opens a window for Indian entrepreneurs in high social impact sectors including agriculture, information and communication technology, pharmaceuticals, energy and healthcare.

Practice Question

1. “Although China has a huge presence in African economy, India has been slowly making inroads into Africa replacing China”. Comment.