India looks for value in Africa

As China makes its presence felt on the continent, India also wants in on the action.

Bruce Whitfield:
Our Africa business correspondent Victor Kgomoeswana joins us now and Victor we look East to China for lots of big deals to be done in Africa and we forget about what India is doing and I was surprised to see today the amount of business that they are doing with Ethiopia.

Victor Kgomoeswana:
Well Bruce good evening, $464-million they have invested in Ethiopia to date, up to July this year, important trade partner it has become India and you are right but if you watch global economics you will know that there is an acronym called BRIC which is Brazil, Russia, India and China. So India is a major player in the world economy it is just not as big as China yet admittedly but it is important to note that China is not the only Asian player that is dominating trade in the African market.

Bruce Whitfield:
And you have only got to look at a map of the world to see where India is, see where Ethiopia is, and think it is not much of a boat ride.

Victor Kgomoeswana:
If you go back in history you will know that Ceylon which is now Sri Lanka has always been part of global trade because of the tea plantations and all that so now with the world economy, the global economy, and the Internet connectivity that make it possible for people to trade around the clock let alone the call centres that India is able to run for all the airlines all over the world.

Bruce Whitfield:
Sure I mean the US Treasury secretary he is coming to Africa which is very interesting considering all the deals that are being done by the Indians, the Chinese, in Africa at the moment. Is he coming to do some damage control do you think?

Victor Kgomoeswana:
Not damage control, Treasury Secretary Paulson will travel to Tanzania, South Africa, and Ghana in November and he is attending a meeting of G20, these are developing countries, the finance ministers of those and central bank governors, to discuss the positive economic changes. He said Africa is experiencing its highest rate of growth and lowest levels of inflation in 30 years so that is particularly prompting increasing investor interest and the US obviously doesn't want to be left behind.

Bruce Whitfield:
And that is what is so interesting though because countries like China, India, do have their own Africa relationships and I can't help but think that the Americans are watching Chinese and Indian influence creeping into Africa and thinking hold on a second this is an area that we have ignored for generations and we'd better get in there before the Chinese and Indians takeover.

Victor Kgomoeswana:
And you will know the common history of China, the relationship of China and the African economy, for political reasons quite honestly the history of the revolution on the African continent makes it much easier for China to get in but you will remember that China doesn't make as many conditions as the US does. Obviously they don't care about your human right's track record, they get in and close the deal, and they will come back and talk later. So I'm sure the US will be realising that China is dominating and stealing the show from it in many areas that it used to dominate.

Bruce Whitfield:
But also there is greater recognition globally almost of the fact that so many nations have been paying lip service to Africa for so long and suddenly their bluff is being called by the likes of China and India.

Victor Kgomoeswana:
Well the European business executives interestingly and academics and politicians admitted that they have been paying lip service to Africa's development. The German Chambers of Industry of Commerce saying as far back as 1971 a report by the World Bank mentioned that there is not enough infrastructural development and energy supplies that are going to face African economies. So they are almost saying in hindsight maybe that is an area where we should have invested and perhaps we could have benefited a lot more and build much more sustainable relationships with the African continent which is what China is exploiting at the moment because they come in, they lay the roads, they build the bridges, they build the power stations and all that and that cements the relationship for a very long time to come.

Bruce Whitfield:
Talk about investments I mean there was a big cellphone conference in Rwanda, your favourite economy, recently and the big networks planning big infrastructure investment in Africa which is good.

Victor Kgomoeswana:
The Connect Africa Summit that must have been one of the biggest summits held in Kigali Rwanda this year and the mobile phone industry of the world planning to invest heavily in sub-Saharan Africa over the next five years. We are talking billions of dollars here to provide telecommunications services to 90 percent of the population, that is a lot of growth, and we are talking the GSMA which is an association representing about 700 mobile phone operators in 200 countries of the world. So it is not a small commitment by any long shot.

Bruce Whitfield:
Between 1999 and 2001 Didata seemed to be doing at least a deal a month if not a deal a week; they have done a deal, a broadband deal, in Africa which I found fascinating.

Victor Kgomoeswana:
And I'm not surprised to be honest that they have moved by buying a company which operates communications services in Nigeria and Ghana. That is a huge hub by the way, Nigeria and Ghana, in West Africa. It is like Kenya in East Africa, it is a point of reference, you'll know that MTN is doing very well in that area. So I'm sure Dimension Data understands with the growth that is being forecast there is no way they can be left out of the game.

Bruce Whitfield:
Victor Kgomoeswana thanks very much indeed, our African business correspondent.

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