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Rediff.com  » Business » India announces $5 billion credit line for Africa

India announces $5 billion credit line for Africa

May 24, 2011 16:50 IST

Africa India on Tuesday announced a $5-billion line of credit to Africa and unveiled a slew of measures to give a massive boost to infrastructure development and capacity building to further consolidate its 'unique' and 'enduring' partnership with the resource-rich continent.

An additional $700 million to establish new institutions and training programmes and another $300 million for the development of a new Ethio-Djibouti railway line was also announced by Prime Minister Manmohan Singh in his address at the plenary session of the Second Africa-India Forum Summit being attended by 15 African countries.

Singh's move is seen as major initiative by India to reach out to African countries where China and Japan have made deep inroads particularly in the infrastructure sector.

The new line of credit follows the $5.4 billion concessional credit announced in 2008 at the time of the first such summit held in New Delhi.

Of this, nearly $2 billion have been committed for projects in Africa.

Nineteen least developed countries are already availing the benefits of duty free tariff scheme which India had then announced.

In his address during which there was a power cut for a few minutes, Singh did some plain speaking noting that the current international economic political situation is 'far from easy' for developing countries.

"Even as the global economy is recovering from the economic crisis, fresh political upheavals are taking place, most not far from this part of the world.

"The world faces new challenges in meeting the requirements of food and security. Global institutions of governance are outmoded and under stress," Singh said.

The Prime Minister said in the light of these challenges, there was need for a 'new spirit of solidarity' among developing countries.

Describing the Summit as a historic gathering of leaders, he said it was for the first time that India and Africa were meeting on such a scale on African soil.

He said the presence of the leaders showed that the two sides were on the right path in building an enduring partnership.

"A partnership that is unique, special and between two equals".

Singh, whose speech was greeted with loud applause, went down memory lane saying India will never forget Africa's role in inspiring its own struggle for national liberation.

"It was here that Mahatma Gandhi developed his political philosphy and developed the concepts of non-violence and peaceful resistance," he recalled.

The Prime Minister said an architecture of cooperation and a culture of communication and dialogue have been put in place but much more needed to be done.

People are hungry for progress, he said.

Noting that Africa possessed all the prerequisites to become a major growth pole of the world in the 21st century, he said India will work with it to realise this potential.

"We believe that a new vision is required for Africa's development and participation in global affairs," he said.

"We do not have all the answers but we have some experience in national building which we are happy to place at the disposal of Africa," Singh said, adding, "Our belief in democracy, pluralism and tolerance is one such".

Among other proposals announced by Singh were establishment of an India-Africa Virtual University to meet some of the demand in Africa for higher studies in Indian institutions.

He said 10,000 new scholarships will be available for African students once this university was established.

Acknowledging the constraints posed by insufficient air connectivity, he said India would be happy to increase the access of African airlines to Indian cities in a significant manner over the next three years.

Among the other initiatives, he announced the setting up of an India-Africa Food Processing Cluster to contribute to value addition and the creation of regional and export markets and a separate integrated textiles cluster to support the cotton industry and its processing and conversion into high value products.

An India-Africa Centre for Medium Range Weather Forecasting will also be set up to harness satellite technology for the agriculture and fisheries sectors as well as contribute towards disaster preparedness and management of natural resources.

V Mohan Narayan in Addis Ababa
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