Africa is a land of opportunities, it is referred as “next investment frontier as investors consistently make returns impossible elsewhere,” thanks to the immense opportunities it has; young emerging population, vast fertile and virgin land, abundant natural resources gas, oil, gold, minerals, gemstones, etc….
Africa is on the radar these days for many Indian companies who wish to take their business across borders.
Besides continent of extraordinary opportunities, it has its own challenges to operate in Africa whicha re very unique when compared with India and other parts of the world. Major challenges for doing business in Africa are : Lack of educated and technically competent manpower, high corruption, thefts, manipulation of imports, high volatility of foreignexchange, lack of infrastructure (Roads, Power, Railways, ports, etc…), inactive financial markets, lack of transparency in systems, etc…
Companies willing to expand in Africa need to set their foot right on a sound base, we at Achyutam assist by
- Providing a roadmap for setting-up businesses and subsequently for operating efficiently,
- Finding out a right JV partner and making a due diligence of shortlisted partner.
- With our extensive network with DFI’s and International Banks we assist companies in arranging finances for their projects and working capital needs.
The African continent today represents new horizons and opportunities for Indian industry, in light of rising per capita incomes, new infrastructure and connectivity networks, and the expanding reach of technology.
India is fortunate to have a strong and close friendship with countries of the African continent based on shared historical experiences. India has always demonstrated strong optimism regarding the potential of the African continent and has seen itself as a significant stakeholder in its progress.
The Indian government has taken several initiatives over the recent past to strengthen the bilateral engagement, instituting platforms for dialogue and cooperation such as the Pan-African e-Network, the Focus Africa programme, and the India-Brazil-South Africa process. The India-Africa forum summits have imparted further impetus to this endeavor..
India’s economic engagement with Africa goes beyond trade and investment to extend to innovative domains such as alternative energy, organic farming, medical expertise, skill development and technology partnerships. Africa’s natural and human resources resonate well with India’s capacities to convert them into productive assets.
Indian companies in Africa have earned goodwill for their long-term strategic engagement to work with communities and people. ‘Affordable, adaptable and accessible’ goods and services have been considered the road to successful ventures in Africa.
As a result, trade has skyrocketed from less than $5 billion in 2000-2001 to over $70 billion in 2012-13. The export profile is well-diversified and top export items include petroleum products, transport equipment, pharmaceuticals and fine chemicals, and machinery.
India’s imports from Africa too are growing robustly, crossing $44 billion in 2011-12.
The country is Africa’s fourth largest trading partner, and accounts for over 5 per cent of Africa’s trade. Given India’s dependence on crude oil and gold, Nigeria and South Africa accounted for about half of total imports. Coal, metals and inorganic chemicals are among the top five import items.
The most encouraging feature of the economic partnership is the strong pipeline of investments that Indian companies have undertaken in Africa, across sectors such as FMCG, mining and minerals, telecommunications, construction and projects, among others. It is estimated that acquisitions by Indian companies accounted for a third of the total value of acquisitions in Sub-Saharan Africa in 2010. India’s approved cumulative investments from April 1996 to March 2013 are estimated to be $37.8 billion.
India and Africa have set a trade target of $90 billion by 2015,
The Exim Bank has 129 lines of credit in operation as of December 2013, amounting to $6 billion for projects in 45 African countries. These LoCs facilitate imports of project equipment and services from India in infrastructure and manufacturing.