An India-China tango in Africa

By Niranjan Sahoo
0 Comment(s)Print E-mail, September 30, 2018
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Train staff and a journalist pose for a selfie in Mombasa, Kenya, last year in front of the Madaraka Express train. (Photo/Xinhua)

Recently China hosted its seventh China-Africa Cooperation (FOCAC) summit in Beijing. With 53 of 54 African countries represented at the FOCAC summit, Beijing rightly described this as the "most important home diplomatic event" of the year. The power-packed summit, which was attended by several heads of states of major African countries, is a clear vindication of the growing role of China in Africa's turnaround story. Cyril Ramaphosa, president of South Africa, aptly depicted this as "Africa's Golden Age" facilitated by China. With China's overall trade with Africa hitting approximately $180 billion in less than a decade, there is little doubt that China's powerful presence in Africa is instrumental to its great economic and industrial revival. 

While China's growing presence in Africa has caught the world's attention for quite some time, international analysts have recently been talking about India's growing presence in the world's second most populous continent. Like China, India's penetration in the African continent has seen a major spike in the last decade or so. With its deep historical connections and its people spread across many countries (East Africa is after all a littoral region of the Indian Ocean) mainly Kenya, South Africa, Mauritius and Uganda, many Indian private companies like Birla and Tatas have developed a strong presence in the continent since the 1960s. 

However, India's rising economic profile in the last two decades has given the country the means to strengthen its presence in Africa. Similar to China, New Delhi launched its flagship initiative - the India-Africa Summit in 2008 - to cement its economic and strategic ties with the continent. And to further spur relations, India has in recent times been sending its top leaders to visit key countries in Africa. The statistics speak for themselves. According to India's Federal Bank analysis, between 2008-2016 the total flow of FDI from India to Africa was above $52 billion, accounting for a huge 21 percent of the country's overseas investment outflows. Indian companies, including its public sector units, have made deep inroads in the oil, services, construction and manufacturing sectors of the region. 

Given this, analysts have been comparing the India-China race in Africa to what some European countries did in the last century and that many in Africa view "China and India as alternatives to the West." There is some element of truth in this as China and India were the fourth and eighth largest investors respectively in Africa in 2016. Both countries have made massive inroads into key growth sectors like oil, natural resources, infrastructure, manufacturing and have provided technical and logistical support to many African countries. The combined investment of both China and India could very well exceed $200 billion in the last decade, which is unprecedented for Africa. 

Yet, there is a fundamental difference between India and China's involvement in terms of its scale and pace. To start, China is Africa's largest trading partner since 2008 with investments worth $170 billion. India, however, is averaging around $50 billion and out of that, a sizable chunk is invested in the tax haven of Mauritius. China's investments have gone up more than three-fold from $9 billion in 2009 to $32 billion whereas India has, in recent years, moved theirs up from $12 billion in 2009 to just $15 billion.

The second and most critical difference is that when compared to China, the presence of Indian public sector companies in Africa is less pervasive, they have a poor record of meeting contractual agreements and have limited impact on local economies. In contrast, Chinese state owned enterprises have excellent track records of meeting contractual agreements and also play an important role in Africa's pre-crisis growth surge.  

Yet, despite varied levels of presence and impact, there is much room for cooperation between these two Asian giants in the region. While analysts often depict the India-China competition as a zero-sum game, there is more room for collaboration and cooperation between the two rising powers in a continent with as many as 54 countries.

Recently, President Xi Jinping and Prime Minister Narendra Modi spent considerable time exploring this area during their BRICS summit in Africa. China's Foreign Ministry spokesperson said, "The cooperation between both countries is developing with sound momentum. We hope that both countries can continue to implement the consensus between the two leaders, explore other cooperation models like 'China-India plus one' or 'China-India plus X' so as to realize a win-win cooperation for China and India and for the peace and stability in the region."

In short, from human resource management to infrastructure building, from capacity building, conflict resolution to governance, there is a wide range of areas where synergies can be found between the two Asian giants to power the African revival. As President Xi aptly remarked, India and China share remarkable complementary advantages and significant potential for cooperation in various fields in Africa. 

Niranjan Sahoo is a senior fellow from the Observer Research Foundation, New Delhi.  

Opinion articles reflect the views of their authors, not necessarily those of

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