INDIA-AFRICA

ENTREPRENEURSHIP & INVESTMENT SUMMIT

Mauritius

16 August 2019

REMARKS

High Commissioner Tanmaya Lal

Hon. Minister for Financial Services and Good Governance,

Secretary Foreign Affairs Ambassador Canabady,

Friends,

May I start by thanking the organisers of this India-Africa Entrepreneurship and Investment Conference. This is an important initiative and I am honoured to join all of you here this evening.

This is an exciting and an important initiative since it brings together entrepreneurs and investors and seeks to link two major markets - those of India and Africa.

This is also important since we are meeting in Mauritius, who is a member of the African Union and an important Ocean state that is a maritime neighbor of both India and mainland Africa across the Indian Ocean.

I have just had the opportunity to meet some of you and I understand that this gathering brings together businesspersons based in India, US, Mauritius and several countries in mainland Africa including the large economies of Nigeria and South Africa alongwith Kenya, Rwanda, Madagascar and Seychelles . The presence of so many of you here this evening reflects the interest in the theme of this Conference.

I also understand that most of you represent or have interest in sectors such as FinTech, Education, AgriTech, E-Commerce and Mobility.

As entrepreneurs and investors, you are far more qualified experts in assessing the huge existing and emerging opportunities offered and the multiple challenges faced both in India and Africa.

As a government official serving as the Indian High Commissioner to Mauritius and with some diplomatic experience of working in Kenya and on India-Africa and India-Mauritius relations in Delhi, I would like to touch broadly on how the Government of India looks at its engagement with Africa; how this engagement has evolved and how it is growing in a larger context.

That would, perhaps, convey a sense of government focus on opportunities in deepening this engagement and I hope that adding this perspective will contribute some value to the discussions.

Friends,

As you know, Africa is too large to allow a simple narrative. The continent is ten times as large in size as India, even though our population levels and the cumulative GDP figures are of a similar order. The mainland of Africa itself has a coastline of 25,000 km with as many as 39 countries facing in different directions to various oceans and seas and open to different influences through its history.

Africa has 54 countries with a very large number of ethnic groups, in addition to various mixed groups reflecting historical interaction with peoples from outside Africa.

Although the colonial rule in Africa, mainly by Britain and France, lasted less than a century, only a few islands of modern economic activity developed, most of them confined to coastal areas or to mining enterprises. Much of the interior remained underdeveloped and isolated. Even after the colonial rules ended, the European companies remained in dominant position in trade, shipping, mining, plantations, banking and manufacturing. The continent was also witness to a series of conflicts reflecting arbitrary boundaries drawn during the colonial conquests. This is, however, changing fast.

There is vast disparity in the economies of various African nations. Today in the sub-Saharan region, which includes 48 countries, 34 are LDCs; 15 are landlocked and 6 are small island developing states. While the combined GDP of the continent is of the order of US$ 2.5 trillion, only 35 countries have GDP of less than US$ 15 billion each and around 10 have GDP of less than 2 billion each. Mauritius and Seychelles are among those with the highest per capita income, although with low population levels. Economic growth rates are around 6% for eastern Africa and around half of this for western African economies. The overall growth figure for the continent is around 3%.

Most of the economic activity overall is still dependent on exports of hydrocarbons, minerals and other commodities. This makes growth dependent on the volatile global prices. While a few countries such as Egypt, Kenya and South Africa have considerable agriculture exports, use of arable land and irrigation remains limited and Africa collectively spends a huge amount on food imports.

Despite this disparity in population and economic activity across African countries, the potential is huge and outlook continues to improve rapidly. Economic growth and democratic governance are increasing, infrastructure and connectivity are improving. Primary school enrollment including gender parity is improving, infant and maternal mortality rates have fallen, HIV/AIDS infection and prevalence rates have been reversed. Malnutrition have been reduced, access to improved drinking water sources has increased. Increasing investment in infrastructure in some countries and growing private consumption in these and other countries is assisting economic growth potential.

Africa is also urbanizing fast, internal air and rail connectivity are also improving. East and West Africa have several competing ports but with capacity and efficiency constraints. Piracy levels off the East African coast have gone down considerably.

Today the proportion of youth with its aspirations in Africa is rapidly rising as it is in India. The potential of Africa is for everyone to see.

Excellency, Friends,

If we look at India-Africa engagement, India’s association with Africa, or more precisely, certain regions of Africa has been longstanding.

All of you are aware of our Diaspora links, which are mainly in the Eastern and Southern Africa for historical reasons – areas which were former British colonies and are English speaking today. These include large and diversified economies such as South Africa and Kenya. And many others too.

Our association with Africa has also been one of longstanding political support, first for their fight for freedom and independence, including at the UN and then to advance the collective interests and concerns on issues such as international trade from a developing country perspective at a multilateral level. India was also a strong proponent of anti-apartheid.

India has also been very active in partnering Africa since our own independence, even at a time when most of the African countries were yet to become independent. Despite our own limited financial resources, this was done through assistance in higher education opportunities, training, R&D and sharing appropriate and affordable technologies.

A number of technical institutions were set up with Indian collaboration. A large number of African political leaders were among thousands of African students who studied at Indian institutions.

Even today, as many as 13 current or former Presidents, Prime Ministers and Vice Presidents in Africa have attended educational or training institutions in India. I understand that the list includes current President of Nigeria, President of Mozambique and Vice President of Tanzania. 

India has also been actively engaged in contributing to the UN peacekeeping efforts in Africa and has contributed thousands of troops to the UN efforts in Africa. India has also collaborated with several African nations in the field of defence and security through training and capacity building including supplies of equipment.

Since the establishment of the Regional groupings and the African Union, India has also been engaging with them institutionally to support development efforts in a range of sectors such as education, healthcare, agriculture, IT etc. A decade ago the India-Africa Summit format was instituted that allows a format for collective engagement between the leaders of Africa and India. The Third such Summit was held in Delhi in October 2015 and was extremely successful.

The India Africa engagement is really diversifying and growing rapidly over the last decade.

So if were to just consider the level of political engagement, we find that in the last five years there have been more than 30 visits at the level of President, Vice President and Prime Minister from India to Africa. A similar number of high level visits have taken place from Africa to India in the last five years. This is in addition to the 41 Heads of State or Government who attended the Third India Africa Summit in Delhi.

India is in the process of opening 18 more Missions in Africa and the total number will reach nearly 50 in a couple of years.

Also at a government level, our partnership includes collaboration in a large number of development projects assisted through grants and soft loans. Soft loans worth over US$ 11 billion have been offered to 41 African countries.

A large number of Indian PSUs have been operating in many countries of Africa for several decades. They are working for instance in banking and insurance and many other sectors.

Today India is among the top five investors in Africa with cumulative investments estimated at US$ 54 billion. Many of these investments are not only in the hydrocarbon and mining sectors but also in banking, pharmaceuticals, healthcare, textiles, telecom and other sectors.

Our engagement includes a very substantial number of annual scholarships for higher education and assistance in short term training courses in a number of fields.

If we look at trade figures, over the last two decades, India-Africa trade has multiplied around nine times to grow from around US$ 7 billion in 2001 to a figure of over US$ 62 billion, despite some slowdown in recent years primarily due to fall in commodity prices.

The African continent has emerged as an important source of oil and gas to India. 20% of India’s pharmaceutical exports are for the African markets. Many Indian pharma companies have also established presence in Africa for instance in Ethiopia, Uganda, Zambia and Ghana. India is collaborating with Kenya and Japan to build a cancer hospital. India is also collaborating with UAE and Ethiopia on joint projects.

As you are aware, air connectivity has been an issue where a lot more needs to be done. I understand there are positive signs in this sector also and we should see the air connectivity increasing in coming years.

It is quite significant that this Conference is being held in Mauritius, a member of the African Union. Mauritius has emerged as an International Financial services hub. The focus on India has been a big part of the financial services operations. I understand that the focus on mainland Africa is now growing.

Mauritius has certain unique advantages such as its high rating in Ease of Doing Business, a very stable democratic political climate, sustained economic growth, availability of human resources, language skills in both English and French among others. Mauritius is also part of special regional trading arrangements in Africa such as COMESA.

Mauritius also attracts students from mainland Africa and can offer similar advantages in other professional training sectors.

The India-Mauritius relationship is extremely close and quite unique. Besides the Diaspora and cultural ties, there has been an extensive partnership across sectors including academic and research linkages in the past. The relationship is broadening with development partnership in a range of areas such as infrastructure, education, healthcare.

Mauritius is, in itself, well placed to be a serious candidate to facilitate investments and trade between India and Africa. Mauritius is also a large Ocean State. Its EEZ is the size comparable to India’s EEZ. Ocean economy is, therefore, an area of emerging interest and potential growth.

Many of large Mauritian corporates for instance in the fields of textiles, tourism, energy, logistics have business links with India. This is in addition to the extensive financial services links. More than 10 Indian PSUs are working in Mauritius in banking, insurance, telecom, education, construction and railways.

SBM Bank of Mauritius opened its wholly owned subsidiary in India this year under the first such license granted by the Reserve Bank of India. The Kukuza Project Development Corporation KPDC, which was set up after the previous India Africa Forum Summit with participation of African Development Bank, EXIM Bank of India and State Bank of India, is working with the Mauritius Africa Fund. The two countries are also negotiating a Comprehensive Economic Partnership Agreement. We hope that this is finalized soon.

Friends,

You have far greater domain knowledge and experience in terms of the sectors of potential investment and all of you have your own business plans and strategies.

I can only note that today technology is a major enabler or disrupter, including in developing economies. It also enables leapfrogging.

As you would know, in India, digital technology is introducing far reaching innovative solutions in services sector and helping scale up government interventions to promote financial inclusion, healthcare services, e-governance, education, and agricultural services for instance. These and other sectors such as energy access, renewable energy, digital payment solutions, and many others have huge potential.

Similar changes are taking place in many countries in Africa. The scale of development challenges remains huge. Technology solutions are today able to overcome the scale of the problem and reach benefits to millions.

To conclude, may I wish you success in your deliberations and networking at this Conference. I hope that such initiatives will contribute to identifying and realizing profitable ventures and bring India and Africa closer.

Thank you.