Infrastructure
Key to
Indo-African
JVs
Thierry Delonguemar,
Vice-President,
Finance, African
Development
Bank (ADB),
believes that
infrastructure
is would be
the key area
of collaboration
between Indian
and African
companies. India
has great capability
if the field
of infrastructure,
especially the
railway. In
an interview
with Dinesh
Chandra, Delonguemar
says that India,
with its experience,
could help Africa
build its railways
and other transport
infrastructure.
What
prospects do
you see for
India-African
Development
Bank (ADB) cooperation
in the coming
years?
The cooperation
between India
and ADB is not
entirely new.
India has been
a member of
ADB for a number
of years. While
India is a recipient
of aid, it is
one of the few
countries which
are providers
of aid also.
By providing
aid India is
helping African
countries in
accelerating
their development
of the region.
One way to do
this is to enhance
cooperation
with the local
development
institutions,
including the
ADB and the
African Development
Fund (ADF).
We had a very
good meeting
today (November
8, 2007) with
top corporate
personalities
of India. Through
these discussions,
we have identified
areas of cooperation,
particularly
in the infrastructure
sector.
India has a
rich experience
of over one
and a half century
in infrastructure
development,
particularly
the Railways.
As transport
is a priority
area for ADB,
there are immense
opportunities
for cooperation
in this segment.
There was also
a presentation
by the public
sector water
consultancy
organisation
WAPCOS. In this
another priority
area, there
are huge opportunities
for mutual cooperation
as our rural
water supply
and sanitation
initiative (RWSSI)
aims at ensuring
that the number
of people living
in Africa having
access to clean
water rises
from the 400
million or 40
per cent of
the population
in 2005 to 500
million or 80
percent of the
population by
2015.
New areas of
cooperation
with Exim Bank
have also been
identified.
We have identified
cooperation
areas in the
human resource
development
and training
sector also.
The discussions
were an eye-opener
for both sides
as they realised
that great opportunities
existed for
mutual cooperation
in many hitherto
unexplored areas.
What
are the sectors
you feel require
immediate attention?
Transport infrastructure,
power and energy,
water and sanitation,
telecommunication,
health care,
tourism, information
technology,
human resource
development,
etc.
How
can Indian firms
contribute to
the development
of Africa?
Africa is a
vast continent
offering lots
of opportunities.
India as a booming
economy needs
to reach more
countries. For
investment,
it offers India
a big opportunity.
Indian companies
can expand their
trading activities
also in many
areas. For instance,
in the pharmaceutical
sector, Indian
companies are
gaining ground
because of their
competitiveness.
It can expand
further.
Why
do you feel
Indian companies
should look
at Africa?
Because it is
a new frontier.
Indian companies
have largely
invested in
Latin America
and elsewhere.
What is left
is Africa. I
think it would
be a mistake
not to avail
of the opportunity.
Africa, as a
continent is
generating enormous
demand today
for appropriate
technology,
products and
engineering
services in
its efforts
towards boosting
the respective
economies of
the countries
of the region.
Their demand
is essentially
arising out
of the need
for local value
addition to
the abundant
natural resources
and making available
- goods and
services at
affordable prices
particularly
for semi urban
population.
There is also
need for augmenting
the local production
to meet the
demands of the
growing middle
class consumer
market and reducing
the dependence
on imports as
well as generating
employment through
replication
of the Indian
model in agriculture
and the SME.
The enormous
strides made
by the Indian
technology and
manufacturing
sectors over
the last decades
now enables
them to provide
acceptable solutions
in technology
and project
goods. Indian
technology and
project goods
are now increasingly
being recognized
in the African
countries as
more suitable
and sustainable
in the context
of their current
state of development.
What
has been so
far your experience
in dealing with
India, both
at the governmental
and private
levels?
While the private
sector has been
extremely cooperative,
our experience
with the Indian
government agencies
has also been
very pleasant.
As compared
to many other
countries, we
have found them
to be quite
expeditious
and taking care
to avoid delays.
India is constantly
represented
at ADB annual
meetings and
Exim Bank's
representatives
are also there
whereas other
countries are
mostly represented
by their bureaucrats.
It shows the
commitment of
the Government
of India and
the Exim Bank.
Opportunities
Galore
Africa has a
total area of
30 million sq.
km with a population
of 811 billion.
The region accounts
for less than
three per cent
of world trade
and less than
2.0 per cent
of world GDP.
With a supportive
global economic
environment,
rise in global
prices and strong
regional export
growth, Africa's
foreign trade
has witnessed
a sharp rise,
almost doubling
during 2000-2005,
reflected in
growth of both
exports as well
as imports.
Exports rose
from US$ 135.3
bn to US$ 270
bn between 2000-2005,
while imports
rosefrom US$
105.1 bn to
US$ 213.7 bn
during the same
period. Intra-regional
trade accounted
for about 8.9
per cent of
total exports
in the region.
India is one
of the 24 non-regional
member countries
of the ADB.
India's subscription
to ADB as of
December 31,
2005 was UA
59.3 million.
India holds
4,538 votes,
which translates
into 0.227 per
cent of total
voting power.
India has traditional
and close trade
relations with
all African
countries. However,
the growth of
trade and investment
between India
and Africa is
not much, particularly
with French-speaking
francophone
countries.
In addition,
to that the
Ministry of
Commerce and
Industry, Government
of India (GOI)
as part of its
EXIM Policy
2002-2007 has
launched an
integrated programme,
"Focus
Africa".
The programme
launched to
tap the tremendous
potential in
the region,
aims to reduce
uncertainty
in the business
environment
and develop
and sustain
a longterm export
growth. Under
the programme,
the Government
of India extends
assistance to
exporters, Export
Promotion Councils,
etc. to visit
these countries,
organise trade
fairs and invite
African trade
delegations
to visit India.
The Government
of India has
signed a Technical
Cooperation
Agreement with
the ADB and
African Development
Fund (ADF) to
enable the utilisation
of Indian consultancy
firms for identified
programmes and
activities of
the ADB Group
with the objective
of contributing
to the economic
development
and social progress
of the African
member states
of ADB. For
this purpose,
GOi has placed
with ADB, funds
amounting to
US$ 3.3 million
equivalent of
Indian Rupees
150.00 million
for the execution
of studies and
provision of
technical assistance
for the preparation
and implementation
of development
projects of
the Bank and
the Fund in
the territories
of regional
members. This
fund has a sectoral,
regional and
activity based
focus.
Based on requests
received from
ADB, GOI approves
inclusion of
specific proposals
under the Agreement.
Exim Bank has
been assigned
the responsibility
of identifying
a panel of consultants
who could be
considered by
ADB for such
assignments.
Exim Bank works
closely with
the Ministry
of Finance and
Company Affairs,
GOI to facilitate
the utilisation
of appropriate
Indian consultants.
Exim
Bank -ADB Cooperation
In
furtherance
of the desire
of both the
organisations
to play an active
role in participation
and promotion
of investments
in public and
private sector
development
projects in
the African
member countries
of ADB and to
coordinate the
related activities,
Exim Bank and
ADB have signed
a Memornadum
of Understanding
(MOD) for co-financing
projects in
Africa.
Since Indian
companies are
competitive
in almost all
the sectors
supported by
ADB such as
Infrastructure
(Water Supply
& Sanitation,
Power, Communications,
Transport),
Social sectors
(Education and
Health) and
Agriculture
and Rural Development,
Exim Bank is
co-financing
in all these
sectors, the
primary condition
being procurement
of goods and
services from
India.
Exim Bank provides
competitive
finance at various
stages of the
business cycle
covering import
of technology,
export product
development.
Export production,
export marketing
and export credit
at pre-shipment
and post-shipment
stages, and
investments
overseas. It
operates a wide
range of financing
and promotional
programmes.
In addition
to finance,
Exim India provides
a range of analytical
information
and export related
services necessary
for globalisation
of Indian companies.
The Bank through
its wide network
of alliances
with financial
institutions,
trade promotion
agencies, information
providers across
the globe, assists
externally-oriented
Indian companies
in their quest
for excellence
and globalisation.
Services include
search for overseas
partners, identification
of technology
supplies, negotiating
an alliance
and consummating
a joint venture.
Exim India is
uniquely placed
as a key financial
institution,
with experience
as an actual
practitioner,
to synthesise
the needs of
a newly industrialised
economy with
contemporary
experience from
developing and
developed countries.
Exim India has
rendered assistance
to a number
of institutions
in Africa which
include establishing
the Afrexim
Bank; establishing
an export credit
guarantee company
in Zimbabwe;
development
of international
trade finance
products for
Industrial Development
Corporation
of South Africa;
study on projecting
Mauritious as
an investment
hub for Indian
firms and blue
print for setting
up of an Exim
Bank in Zirnbabwe.
The Bank's operative
lines of credit
(LOCs) in Africa
as on November
6, 2007 stood
at Amount of
credit US$ 1749.44
million and
Contracts approved
US$ 1081.79
million.
