India-Africa attraction: Ahmedabad hosts AfDB’s annual assembly
Hot dry winds and a significant lack of alcohol – Gujarat is a ‘dry state’ – haven’t dampened spirits. India’s Prime Minister Narendra Modi opened the conference with a strong reminder of the historical links, similarities and solidarity between India and the African continent: “As Mandela said during the apartheid struggle, and I quote, ‘India came to our aid when the rest of the world stood by. When the doors of international councils were closed, India opened the way.'”
This is a high-wire act for the AfDB’s President Akinwumu Adesina. To match his ambitious programme for the bank, he wants to raise the bank’s capital. That’s a hard sell in these tough economic times. Africa’s growth dropped to 2.2% in 2016, though expected to reach 3.6% this year.
But Adesina believes he has proof of concept, with approvals of $10.5bn in 2016, a record for the bank, and disbursements of $6.5bn, also a record. “We leverage each dollar the bank spends four times, for example in our syndicated loan for a near $1bn facility for South Africa’s Eskom with nine banks,” Adesina told The Africa Report.
He was joined onstage by Presidents Macky Sall of Senegal and Patrice Talon of Benin, as well as Daniel Kablan Duncan, Vice-President of Cote d’Ivoire, India’s minister of finance Arun Jaitley, and the chief minister for Gujurat State Vijay Rupani. Bill Gates sent a televised message.
But it was Modi stole the show with his quip on how India might not ever compete with African long distance runners, but that India would always stand shoulder to shoulder with the continent in the great marathon of development.
And there is great to deal of development know-how to be gleaned in India. From the development of modern IT systems, to the management of sprawling rail infrastructure, India’s recent past is Africa’s present. “By 2018, no village in India will be without electricity”, promised Modi, who for 15 years was the chief minister for Gujurat, home state of Mahatma Ghandi.
Trade between India and Africa hit $57bn in 2016, “and we expect it to reach $100bn in 2018”, says Adesina. But this remains largely in the commodities. Large Indian oil and mining companies like Coal India and state energy company ONGC dominate the relationship.
The AfDB is pushing hard to pull African countries away from this reliance on raw materials, and towards processing. Nowhere is the potential for cooperation here more striking than in agriculture, the theme of these AfDB meetings. “You can’t talk about emergence if you can’t feed your own people”, says Senegal’s President Sall, harking back to India’s own Green Revolution.
AfDB President Adesina, who began his career in India as a Rockefeller fellow, believes the continent can go further than just food security. ”No-one drinks oil, no-one smokes gas. But everyone eats food”, he says. “When the richest black man in the world, Aliko Dangote, invests $1bn in rice, that is all you need to know”.
This is where Indian corporates are also trying to make their mark. “We have the quality of European companies, but at around 65% of the price” says Rajesh Subramaniam, executive director of IDMC, part of India’s state milk board, who believes the similarities in agricultural climates make Indian companies a good fit. “Just as in Africa, you have to cool the milk from the cows straight away”.
This conference marks a flutter of Asia-focused conferences. China’s One Belt One Road conference was on May 14 – to hammer out details of Beijing’s ambitious $3trn global infrastructure build. Japan took its TICAD conference to Nairobi in August 2016.
S Kuppuswamy, a key Africa-focused executive for one of India’s largest construction companies, the Shapoorji Pallonji Group, says the competition is tough, especially with Chinese companies backed by Beijing, “who have released a flood of financing into the market”. The company is building a railroad in Ghana from Tema port to Akosombo.
He remains confident that India has its own sphere to compete in, and points to new channels of cooperation with Japan, allying high-tech Japanese products to Indian engineering for investment into Africa. “It’s the famous win-win”.
For Adesina, this can’t happen soon enough. Quoting John Lennon, he says: “the future is yesterday, and we are already late”.