India's growth to impact Africa

Accra: With just days to go for 2014 to end, a new study has projected a steady growth in India, which from every indication is likely to have some impact on its dealings with Africa which is also being seen as a growth zone next year.

The Standard Chartered Bank's Global Research team has projected India to be "a positive surprise" compared to the situation in other parts of the globe.

"More importantly, sentiment is also rising sharply due to changes made by the new government to reduce red tape and promote investment," the team said.Former Federation of India Chambers of Commerce and Industry (Ficci) president R.V. Kanoria said earlier this year that the Indian government has been proactive in its commitment to encourage investment in Africa.

"Indian investments in Africa have increased 14-fold in the past year and we are hoping that by next year it will rise to $100 billion," he said.

In addition to investment, India has also been active in capacity building and knowledge sharing, particularly in the area of private public participation (PPP) across the continent.

Indian officials say, the public sector in India has partnered with the private sector to bridge the infrastructure gap resulting in 50 percent private investment.

With more than a 1,000 PPP projects, India is said to have perfected the PPP model, which could arguably provide a solution to Africa's infrastructural deficit.

Emmanuel Mbi Ahas, African Development Bank's (AfDB) first vice-president and chief operating officer, expressed Africa's desire to learn from India and the AfDB's will to support such efforts.

India's success story in the implementation of the PPP model makes it an important partner in facilitating its adoption in Africa. Analysts at the AfDB say India is one of the developing countries to have successfully received a large-scale investment to the tune of $300 billion in infrastructure under the PPP model.

According to them, the Indian government has signed a memorandum of understanding (MoU) with the African Development Bank Group to share the model agreements and legal documents associated with PPPs to facilitate implementation of this model in African countries. This gives some hope for the continent in the coming year.

India's possible assistance to Africa has been given a further boost given the fact that the Standard Chartered group has praised the country's central bank for its increased credibility which, it said, had helped it rein in inflation and come to show that India was poised to meet its promises to Africa despite its internal challenges.

With projected stronger growth and slower inflation in the coming years, it is clear that India is positioned to either increase or maintain its assistance to Africa which is in dire need for help. However, it does look that all is not lost in Africa as the report has predicted that the African economy will continue to grow and have gone ahead to project a growth of 3.4 percent from 2.9 percent in 2014.

It however said this confidence "will require more than just better economic indicators to drive it", adding that this would need "a spontaneous urge to action rather than inaction, and not the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities".

In November, the Economic Commission for Africa (ECA) said in a report that, in order to ensure that growth is both sustainable and beneficial to all strata of society in Africa, countries on the continent, including North Africa, "must adopt industrial policies that are germane to their own local contexts and set up strong institutions with the mandate of formulating and pushing through such policies".

It said, several country case studies across Africa, show the continent's failure to transform itself industrially to inadequacies in industrial policy design.

"These deficiencies, results from the erroneous pursuit of a one-size fits all approach to industrialisation learnt from elsewhere, the lack of policy dynamism, gaps in high-level coordination and the acute lack of consultations with all stakeholders especially those of the private sector," the ECA report said.

Beyond dissecting the difficulties on industrialising in Africa, the ECA report catalogues the experience of other countries of the South, including India, that have made huge progress in industrialisation and suggests an institutional framework to conceive and implement industrial policies on the continent.

It urges African governments, in the context of limited resources, to build tailor-made infrastructure projects that would respond to the needs of specific sectors or domains for industrial expansion.

Heikki Tuunanen, executive director of the AfDB, has said the projected growth can only materialise if private enterprise, particularly SMEs, which make up a large percentage of businesses on the continent, is encouraged, because they the ability to absorb the existent work force.

He added that India, a champion in SMEs could share some its experiences in this area and help Africa's five million SMEs to grow.

Both Indian and African officials agree that much has happened in Africa and India in the past 25 years of far reaching implications in the development discourse. They therefore believe that there is much to share here on what makes development happen, on dealing with inclusion, job creation, inequalities as well as management of natural capital.