April 14, 2008
It's Time NRI Business Leaders
Discovered Africa By Kul Bhushan
Why haven't NRIs in the
West invested in Africa? Perhaps due to the lack of information
about high returns on investment. Perhaps due to the outdated
perceptions and prejudices about Africa. Perhaps due to apathy about
Africa as a growing market. Or perhaps due to violence that
constantly bursts into headlines.
Whatever may be the reasons, it is really worth looking at Africa as
a major opportunity for investment and trade. This was the prime
focus of a two-day India-Africa conference in New Delhi last week,
with the participation of 14 African countries, that brought the
continent to the forefront as an equal partner for development.
In today's global village with its overload of information, it is
tragic that sharp NRI business people still do not know about the
new business openings in Africa. All the information they need to
get going is just a click away on the Internet.
The outdated impressions of Africa as the 'dark' continent, unsafe
for business and investment are antiquated like the colonial empires
that are no more. Africa is a growing market for most goods and
services. While the developed markets of the world are buying cars
and white goods mostly to replace the ones in use, Africa presents a
market where these goods are bought for the first time. So Africa
has a current and a high potential demand.
Finally, the news about violent conflicts and disasters in Africa.
Of the 53 countries on this continent, there are about half a dozen
witnessing some form of conflict all the time. True. But the same is
true of any other group of over 50 countries in the world. As for
disasters like drought and floods, they are no different from other
natural disasters in any part of the world. With 35 least developed
countries (LDCs) of the world in Africa, these disasters mean global
appeals and thus the news.
Now look at some Indian companies that started to sell to Africa in
the last 50 years.
Targeting East Africa, major Indian corporate houses like the Birlas,
the Singhanias and the Kirloskars started to sell their products and
later established their industries to capture the market there.
After countries in East Africa gained independence, they sold equity
to Africans after reaping high profits.
Now, a second wave of Indian groups like the Tatas, Ambanis and
Ranbaxy as well as government-owned companies have moved into Africa
during the last decade.
The success story of a medium-sized Indian enterprise in Africa is
worth studying.
A Delhi-based company manufacturing and selling printing rollers
scouted for foreign markets and started to sell them in Kenya. After
its sales executive visited Kenya, a joint venture was set up in
Nairobi. Another got going in Johannesburg in South Africa and a
third in Lagos - all three in partnerships with local Indians in
these countries.
The company outsourced the manufacturing equipment from Punjab,
supplied raw materials and sent its technicians to start the plants.
Since these countries have thousands of small and medium sized
printing presses, the demand for this consumable input is constant
as it comes at a lower price than competing products from the West.
Thus these joint ventures are viable and profitable. All this has
been accomplished in the last five years despite the news of unrest
from Africa.
India has a huge list of tropicalised products that can better
withstand the tough African conditions. India has also developed
many technologies eminently suitable for Africa - for example
manufacturing processes for low-cost construction materials with a
massive demand in Africa. With India announcing new lines of credit
amounting to $5.4 billion at the Indo-African conference, there is
plenty of scope for new trade and business ventures.
Many areas are promising. Leather is a major product and would bring
more income and profit if it were exported as high value goods
instead of as a raw material.
Business partnerships are viable in trade capacity building, skill
development, technological upgradation and value addition for the
leather industry in Ethiopia, Kenya, Tanzania and Uganda. Cashew
apple, a waste product, can be used as renewable feedstock for the
production of ethanol fuel with Indian technology.
Biogas is an equally profitable product in Africa. Auto components
units can be set up in Egypt, Nigeria and Morocco for global
markets. Then there is IT: as India is a global leader in the
sector, a three-way partnership between NRI enterprise, Indian
technology and an African base can become a winner.
These projects have been identified by the UNIDO Centre for
South-South Cooperation in New Delhi. Other projects have been
developed by Indian apex industry and business bodies like the
Confederation of Indian Industry (CII), the Federation of Indian
Chambers of Commerce and Industry (FICCI) and the Associated
Chambers of Commerce and Industry of India (Assocham) among others.
So forget the sensational news and outdated prejudices and get on
with making money in Africa.
(Kul Bhushan previously worked in Kenya as a newspaper editor and
has travelled to over 55 countries. He lives in New Delhi and can be
contacted at kulbhushan2040@gmail.com)
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