Africa Calling

Africa Calling

The latest buzz word in the global investment field is mission “Africa”. Africa is endowed with great wealth of natural resources and a wildlife  and much of it is largely untapped till recent past due to frequent political distrubances. Africa was earlier described as the dark continent, as it could march along the rest of world on the path of progress and riches. It is now touted to emerge as a continent with highest number of growing middle class families.

Realising the potential of this untapped economy of late, many countries started making huge investments to flag off their enterprises. India is historically well connected to Africa. Large contingent of  Indian labourers were imported by Britishers to  build rail roads in Africa in the early 19^th century. Consequently whoppable Indian population of those descendants have integrated well into the main stream.  Indian investments and business interests have been persistent in the continent for more than a century. But Indian business investments couldn’t make an impact when compared to the Chinese who are making huge investments in the continent for the past few decades.

Indian presence in Africa has been far from being smooth. They were highly resented especially in the eastern part of the continent and accused of having a "cat and mouse" kind of relationship. There has also been a huge divide between the Indian families living in Africa for generations and the newly relocated immigrants. The older generation of settled Indians run family owned business whereas fresh immigrants are more bolder, dynamic and have larger economic interests. Though the term destination Africa has been catching up among the young and dynamic entrepreneurs of India. The outcome in terms of benefits are not size able when compared to the Chinese presence. India is yet to capitalise on its long history and deep social networks.

Chinese have been more aggressive in their investment with zero-interest loans funded by the government and  backed by full resources. They have made a huge difference in the land scape and the infrastructure of the continent by building palatial hotels and offices. Thus making the continent more accessible to the rest of the world. They have been actively investing in mining and oil exploration. They are trying to transform the economy by gaining access to mineral resources like Platinum, Gold, Chrome etc. They have substantial advantages in terms of labour efficiency and latest technology, which has given them an edge. Labour is imported from China on temporary basis  and are rotated with a fresh batch as and when they finish their project. They are paid  premium wages for working abroad. This keeps them motivated and dedicated to work for long hours. They are not bothered about the living conditions as are earning plenty of income for few months of work. Workers are hardly seen to be interacting with the local community and they would retire to their huge dormitories where around 80 people would sleep together in a building.

Indians on the other hand are largely involved in consumer- goods factories, textile mills, automobile dealership, manufacture of soaps and chips and most of them are professional employees. Most of them tend to forge a long term interest and  hence mainly interested to be an essential part of the continent’s fabric. Of late, Indians are increasingly focusing on the sectors like educational institutions,  IT projects, medical expertise etc. Inspite of longer presence in the continent, Indians are unable to make substantial financial gains.

 A glaring lacuna  has been Indian government's lack of initiative. Most of the entrepreneurs suffers from lack of capital and professional labour. Chinese are slowly taking control over the Indian-dominated sectors like import and export trading, textiles and food manufacturing. Old business tactics of India like the local labour, with limited  resources may no longer work.  India must change it strategy and should start investing on a war footing basis. India should realise the need to tap the potential of emerging markets in the continent and seriously devise plans to utilise the untapped natural resources of the mineral and oil rich land. India lags behind China in investments. Indian investments so far have been subtler and consumer oriented. China’s investment increased to almost 100% in the past thirty years with a trade activity of $160 billion as  against India’s $50 billion.

The economic gaints of the Asia, India and China intially were thought to be closely competing for investments in the continent. But if the situation persists the same way, India is  soon going to  lose out the competition.

 

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