India ramps up Africa lending in the race to counter China

Africa has become the second-largest recipient of credit from India as New Delhi tries to catch up with China in expanding its influence in the resource-rich continent, according to a report.

According to a Bloomberg report, citing Harsha Bangari, the managing director of India’s Export Import Bank, 42 African nations received about $32 billion or 38% of all credit extended by India in the last decade — just a few percentage points below its neighbors.

The bank is an instrument of India’s “economic diplomacy,” Bloomberg quoted Bangari as saying.

She said India has also opened up 195 project-based lines of credit worth about $12 billion across Africa, three times the number it has in its own region in the last decade.

“Africa has made good use of credit lines,” extended for projects that include health care, infrastructure, agriculture and irrigation and India is seeing a steady increase in demand, she  said.

India has recently made an attempt to engage with nations on Africa, the second-largest continent in the globe, but its efforts have trailed behind those of its larger and wealthier neighbour.

According to data from Boston University’s Global Development Policy Centre, While China’s loans to Africa have dipped since 2016, overall in the 10 years to 2020, it pledged $134.6 billion to African nations, according to data from Boston University’s Global Development Policy Center. That’s almost 11 times more than what India has offered, reported Bloomberg.

Deeper ties with Africa

Prime Minister Narendra Modi’s government has pushed for deeper engagement with Africa, strengthening both diplomatic and economic ties. New Delhi sees an opportunity to expand farther into the continent as it struggles with the pandemic’s economic effects and Russia’s conflict in Ukraine.

In the last nine years, 18 of the 25 new Indian embassies or consulates were in Africa. In February, India hosted 48 African countries at the Voice of Global South summit.

PM Modi has also been championing India as a representative of the Global South and using platforms like its presidency of the Group of 20 nations to draw attention to the debt crises in developing economies.

“We are trying to think 25 years from now,” the report cited Foreign Minister S Jaishankar as saying in a speech on 28 June.

“And ask ourselves where are we likely to be in 2047 and what should we be doing now to prepare for it,” he added.

China’s quantum of financing is bigger than India, but New Delhi let’s governments decide what they need and doesn’t burden them with the sort of vanity projects Beijing is often critiqued for, Bangari said.

“If you see the projects which India has supported you will see they bring a lot of benefits to the economy.”

With inputs from agencies

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