COVID-19: Opportunity for India to deepen its engagement with Africa

INTERNATIONAL/ ECONOMY

Topic: General Studies 2:

• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
• Effect of policies and politics of developed and developing countries on India’s interests.

COVID-19: Opportunity for India to deepen its engagement with Africa

Context: Africa Day is observed every year on May 25 to commemorate the founding of the Organisation of African Unity (now known as the African Union). India has been closely associated with it on account of its shared colonial past and rich contemporary ties

Significance of Africa

• Africa’s rich natural resources becomes importance in the light of growing global population 
• Trade & Investment opportunities, including in energy, mining, infrastructure and connectivity.
• Long-term economic potential due to huge market and rising purchasing power
• Youthful demography of the region provides much needed human resources 
• Political Significance: Africa as a bloc of 54 countries in multi-lateral organisations can play a decisive role in International politics

Impact of COVID-19 pandemic on Africa

• Recession: COVID-19 outbreak has sparked off the Sub-Saharan Africa (SSA) region’s first recession in 25 years.
• Unemployment: Growth is expected to plummet to between -2.1 and -5.1 per cent in 2020, from a modest 2.4 per cent in 2019 which leads to more job losses
• Deepens Health Crisis: With high rates of HIV, malaria, diabetes, hypertension and malnourishment prevalent in Africa, COVID-19 pandemic will further deepen the health and economic crisis. 
• Impacts economic model: The steep decline in commodity prices has spelt disaster for the commodity dependent economies of Nigeria, Zambia and Angola.

• Possibility of Increased Public debt: According to the World Bank, the SSA region paid $35.8 billion in total debt service in 2018, 2.1% of regional GDP. This figure is set to increase due to falling revenues & precarious fiscal position of African nations

• Forced to seek aid from international Community: Together, African countries have sought a $100 billion rescue package, including a $44 billion waiver of interest payment by the world’s 20 largest economies.

India- Africa Relationship

• India-Africa trade reached $62 billion in 2018 compared to $39 billion during 2009-10. 
• After South Asia, Africa is the second-largest recipient of Indian overseas assistance with Lines of Credit (LOC) worth nearly $10 billion (42% of the total) spread over 100 projects in 41 countries. 
• 40% of all training and capacity building slots under the ITEC programme have traditionally been reserved for Africa. 
• Approximately 6,000 Indian soldiers are deployed in UN peace-keeping missions in five conflict zones in Africa.
• To develop closer relations, India launched the first-ever India Africa Defence Ministers conclave in February 2020 on the margins of the Defence Expo 2020.
• India provides about 50,000 scholarships to African students each year.

In the wake of pandemic, what can India do to improve its relationship with Africa?

• China’s engagement with Africa is huge (annual trade ~ $208 billion) but is increasingly regarded as predatory and exploitative (defective PPE gear by China during Pandemic). This provides an opportunity for India to increase its strategic space in Africa
• India could consider structuring a series of virtual summits with African leaders that could both provide a platform for a cooperative response to the pandemic 
• The Aarogya Setu App and the E-Gram Swaraj App for rural areas for mapping COVID-19 are technological achievements that could be shared with Africa.
• Since the movement of African students to India for higher education has been disrupted, India may expand the e-VidyaBharti (tele education) project to establish an India-Africa Virtual University.
• India could also create a new fund for Africa and adapt its grant-in-aid assistance to reflect the current priorities
• India could direct new investment projects by Indian entrepreneurs in Africa especially in the pharmaceutical and healthcare sectors.
• Quad Plus – US, India, Japan & Australia – can exchange views and propose cooperation with select African countries abutting the Indian Ocean.

Conclusion

The pandemic is a colossal challenge but it may create fresh opportunities to bring India and Africa closer together.

Connecting the dots:

• European Union
• Asia-Africa Growth Corridor