State CII, Exmi Bank seminar to tap African market

Exploring the potential of two-way business opportunities with Gujarat, are four High Commissioners, one Ambassador, and a Minister-Counsellor from the African countries of Uganda, Nigeria, Kenya, Ethiopia, Zimbabwe and Angola.

"The potential is immense, specially in the areas of drugs & pharma as well as industrial chemicals and direct attempts should yield results. The hurdle for the companies here lies in terms of long-term credit facilities," said Mr R Venkateswaran, resident representative, Exim Bank of India.

With an aim to explore these opportunities, the Confederation of Indian Industry (CII)-Gujarat along with the Exim Bank is organising a one day seminar ‘Africa--Do you know the Market?’ in Abmedabad tomorrow, along with one-to-one meetings with the city’s businessmen and the African representatives.

Elucidating on the problem areas, Mr Venkateswaran, said, "There is a high risk orientation for Africa and businessmen are very uncomfortable besides which repayments are also not assured." Added to this is the fact that the Export Credit and Guarantee Corporation (ECGC) does not cover all the African markets, resulting in the businessmen paying a very high credit insurance.

In spite of the above hurdles, the Exim Bank is promoting business with African countries. "We have a distinct advantage in that our products are readily acceptable for their technological superiority and with an absence of any stringent laws, they face few red tapism," Mr Venkateswaran sald.

The bank, which has been making strategic investments in African development banks and the Afriexim Bank, has already extended a US$ 4.5 million line-of-credit last year to the PTA which is a development Bank for the East and Southern African countries.

While on the one hand, India’s bilateral trade with Africa has been on an increase in the last few years, overall India has a trade deficit with Africa with imbalance in India’s trading pattern with a number of African countries. This implies scope for increase in trade.

India’s major exports to Africa include drugs pharma, ready-made garments, rice, transport equipment, hand tools, agricultural machinery and implements, Plastic among other items while imports include inorganic chemicals, dyeing, tanning and colouring materials, semi-precious stones, leather, natural gum and raw hides.

Angola is one of the world’s biggest and least developed mineral treasure troves, whose wide array of natural resources are now open for foreign participation. The Angola government is looking for hi-lateral co-operation with India in the areas of commerce, agriculture, energy, construction, petroleum and health. Angola will be represented at tomorrow’s seminar by Mr Flavio Fonseca, Minister-Counsellor, Embassy of Republic of Angola.

Ethiopia follows a market oriented economic development strategy. Ethiopia allows full FDI or joint with domestic partners along with many income tax incentives with an attempt to boost the economy through FDI. The African country is particularly seeking India’s expertise in SME industries. Ambassador of Ethiopia to India, Mr Desta Erifo will represent his country.

India is the eighth largest exporter to Kenya and bilateral trade between the two countries stood at US$ 119.5 million in November ‘98. The joint trade committee between India-Kenya has identified electronics, computer software and telecommunications as the areas to explore. High Commissioner of Kenya, Mr L 0 Amayo will be in Ahmedabad to address the seminar.

Nigeria is looking to India for technology transfer, drugs, pharma, engineering goods as well as the potential for exporting petroleum crude and prod acts, wood and wood products and cashew nuts. Mr Habib O Elabor, High Commissioner of Nigeria to India will represent the oil rich African country.

While India ranks fourth as Uganda’s trading partner, the African government is making positive macro-economic policies to attract larger private investments. For FDI, the government offers packages which help reduce start-up cost and increases after tax profits. Mr Joseph Tomusange, High Commissioner Uganda will give highlight the opportunities in Uganda.

Zimbabwe offers opportunities for agro-based activities. The lone female member of the African team is Ms Lucia Muvingi, High Commissioner of Zimbabwe who will talk on the opportunities her country offers.

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Compiled from local news media