India, China leading global race to secure African business

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In the latest salvo in the global battle to win African business, India has invited the leaders of 54 African nations to a major summit in New Delhi this week.

More than 40 African heads of state and government are expected to accept the invitation on Thursday, making it the biggest Africa-India summit to date.

But it's just the latest sign that the world still sees Africa as a ripe market for trade and investment, despite the visible weakening of African economies this year as a result of the commodity slump.

Africa's oil and minerals, and other natural resources might not be quite as attractive as they were a couple of years ago, but the world is still beating a path to Africa's door. A major China-Africa summit will be held in Johannesburg in early December, attended by Chinese President Xi Jinping and many top African leaders. U.S. President Barack Obama visited Kenya and Ethiopia in July, after hosting African leaders at the White House last year.

Even Canada is making its own move on the African market: Export Development Canada is opening its first permanent office in sub-Saharan Africa this week; the export credit agency plans an official launch for the office in Johannesburg on Thursday with a new permanent chief representative in attendance.

"We are deepening our roots in Africa now so that we can help Canadian companies of all sizes link into the supply chains of upcoming infrastructure, oil and gas, and mining project opportunities," said the EDC's senior vice-president, Mairead Lavery, in a statement this week.

"We will do this by focusing on developing relationships with the major South African companies who control supply chains that expand throughout the sub-Saharan region. Specifically we'll focus on rapidly growing markets like Ghana, Nigeria and Kenya, and secondarily on markets with near-term potential like Angola, Botswana, Cameroon, Gabon and Tanzania."

While the EDC says it has helped facilitate $7.4-billion (U.S.) in business between Canadian and African companies over the past five years, this is small beans compared with what China and India have been doing in Africa as they seize the emerging opportunities on the continent.

Two-way annual trade between India and Africa has reached $72-billion, more than double the amount of trade in 2008 when the first India-Africa summit was held, and far ahead of the $5.3-billion in trade between the two countries in 2001.

But China has become the biggest of all powers in the African market. Its trade there has soared to more than $200-billion, from virtually nothing 15 years ago.

China and India have both focused on buying African commodities, especially oil and minerals, while selling cheap consumer goods and industrial products into the fast-growing African market.

Summits of high-level leaders, allowing face-to-face deal-making, have become a key business weapon for China and India as they strive to tap the enormous potential of a continent with a billion people.

Indian Prime Minister Narendra Modi is expected to announce a substantial aid package for Africa – reportedly between $7-billion and $15-billion – at the summit on Thursday.

India has historical links to Africa, and Indian migrants can be found across the continent, often with family roots that stretch back for several generations. (The most famous Indian migrant was Mahatma Gandhi, who practised as a lawyer in South Africa before leading India to independence.)

But in recent decades, China has rapidly overtaken India as an investor and trader in Africa, and it also has greater military and geopolitical influence in the region.

Although the two countries deny any overt competition for influence in Africa – as does the United States, which has placed a higher emphasis on African business in recent years – there are signs that India wants to regain power here.

"India is the fastest-growing major economy," Mr. Modi told African journalists ahead of the summit. "Africa is experiencing rapid growth, too."

The goal of the summit, he said, is to "set substantially higher and ambitious targets for our development partnership."

Among the biggest Indian companies in Africa are the cellphone company, Bharti Airtel Ltd., which operates in 17 African countries, and the diversified Tata group, which is active in 11 African countries.