FICCI, Exim Bank suggest initiatives for African economies

October 10th, 2011 - 10:25 pm ICT by IANS  

Hyderabad, Oct 10 (IANS) The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Exim Bank of India Monday suggested policy initiatives for African economies to achieve sustainable growth, which in turn, is expected to boost bilateral trade and investment relations with India.

A knowledge paper by FICCI and Exim Bank, released Monday on the eve of India-Africa Business Partnership Summit here, has suggested measures including fiscal policy response and altering monetary policy in support of domestic demand and proper use of exchange rates.

It also suggests creating a role for the public sector in developmental areas for the enhancement of transport infrastructure, health and education services.

The African nations were asked to take up well-targeted poverty reduction programmes; reform business environment for private sector growth; to strengthen banking supervisory capacity; establish strong legal and regulatory frameworks; and building human capital through emphasis on education and training.

Over 120 African delegates and 250 Indian delegates comprising CEOs, heads of public and private sector corporations and independent consultants will attend the two-day summit to share and showcase business opportunities for Indian and African companies, said a FICCI statement.

The paper notes that the recent wave of FDI from India to Africa is driven by the bigger Indian companies. “Most of these companies have made significant investment in the extraction sector of different African countries,” it said.

“The sustained increase in commodity prices coupled with increasing demand for energy and raw materials in the domestic economy are the major driving forces for these companies. Particularly for oil and energy companies, the quest for energy security in India is one of the major motivating factors for investing in Africa.”

Bilateral trade between India and Africa has more than doubled from $25 billion in 2006-07 to $53.3 billion in 2010-11, due to the rise in both exports to, and imports from the African region.

India’s exports to Africa have risen from $10.3 billion in 2006-07 to $21.1 billion in 2010-11, primarily due to an increase in exports of transport equipment and petroleum products.

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