In a volatile global economic environment, Africa remained a long term growth market and a stable ally for India. Africa’s GDP grew at 3.4% in 2015 faster than the global growth rate and some of the African economies feature in the list of fastest growing economies globally. Africa presents a huge market with an ever increasing middle class that has the potential of consumer spending of USD 2.2 trillion by 2030 according to the African Development Bank. With 29 million youths entering the labour force each year, Africa is huge potential for investment in areas such as infrastructure and manufacturing. Africa also holds great market prospects for Indian manufactured goods.
The region has enormous trade potential for Indian brands. The bilateral trade between India and Africa is expected to reach USD 100 billion by 2018, according to the president of AfDB. The continent’s export basket almost quadrupled in the past decade with trade shifting in a big way from Europe to Asia. Country-wise, India is the second largest trading partner of Africa globally and hence it merits a strategic approach to India’s engagement to Africa.
The biggest lucrative area for India and Africa trade exchange is the potential for the SMEs of the two nations to work together and explore the business potential in each other’s territory.
On such outset, Prime Minister Narendra Modi visited Africa and highlighted great potential for Indian MSMEs.
India’s private sector which mainly constitutes MSMEs and SMEs has been at the forefront of Africa-India ties, and from 1996 to 2016, nearly a fifth of Indian overseas direct investments went to Africa. India is the fifth-biggest investor in Africa, with investments over the past 20 years amounting to $54 billion or around 19% of Africa’s foreign direct investment. Pharmaceuticals, ICT and services, the automobile sector and the power sector are likely to be major contributors to the bilateral trade between the two countries in the next two years.
“The visit certainly will deepen India-Africa business corridors giving rise for the SMEs subsector to flourish,” commented Mr. E.J.Eradiri, Secretary General, All Africa Association for SMEs. Mr Eradari is also Director General, Bayelsa State Microfinance and Enterprise Development Agency in Nigeria, a Governing Body member of the world Association for SMEs and recently inaugurated as Secretary General, All Africa Association for SMEs (AAASME).
Mr Eradari shared his views on the potential business prospect between India and African countries and stated that, “Indian entrepreneurs and African entrepreneurs have a lot of similarities and our markets are also very much complementary to each other. We understand and respect the business potential of India. However, African markets are considering India as a preferred business partner.”