India Boosts Africa Lending to Counter China, Expanding Its Influence in the World’s Second-Largest Continent
Ira Singh
11 July’23
India has intensified its lending efforts in Africa, aiming to counter China’s expanding influence in the continent. With Africa being the world’s second-largest continent and a strategic region for economic growth, India’s increased engagement signals its determination to strengthen its presence and forge closer ties with African nations.
In recent years, China’s economic involvement in Africa has grown significantly through infrastructure projects, loans, and investments. This has raised concerns among other global powers, including India, about China’s expanding influence and potential geopolitical implications. In response, India has embarked on an assertive strategy to bolster its presence in Africa, focusing on development partnerships, investment, and lending initiatives.
Africa has become the second-largest recipient of credit from India as the country is making efforts to catch up with China in growing its impact in the resource-rich continent, as per a new report.42 African nations have till now received about $32 billion or 38% of all credit extended by India in the last decade, just a few percentage points below its neighbours, Harsha Bangari, the managing director of India’sExport-Import Bank said as per a Bloomberg report.
Bangari further said that the funding is an instrument of India’s “economic diplomacy.” She then added that India has also opened up 195 project- based lines of credit worth about $12 billion across Africa, which is three times the number it has in its own region in the last decade.
India, despite its recent efforts to engage with nations in Africa, the world’s second-largest continent, has lagged behind its bigger and wealthier neighbours.
While China’s loans to Africa have plunged since 2016, overall in the 10 years to 2020, it promised $134.6 billion to African nations, as per data from Boston University’s Global Development Policy Center. That’s almost 11 times more than what India has offered, according to Bloomberg reports.
Indian Government efforts to push for deeper ties with Africa
Indian Prime Minister Narendra Modi’s government has pushed for more significant engagement with the world’s second-largest continent, Africa, encouraging both economic and diplomatic
ties.
Prime Minister Narendra Modi in a recent statement, emphasized the importance of Africa in India’s foreign policy agenda. He highlighted the shared values, historical ties, and common development goals that India and African nations strive to achieve. This renewed commitment was accompanied by concrete steps to enhance India’s lending capacity and financial support for Africa.
India’s approach includes providing lines of credit, grants, and technical assistance to African countries, aimed at supporting infrastructure development, agriculture, healthcare, education, and renewable energy projects. These financial resources are intended to promote sustainable growth, empower local communities, and enhance self-reliance.
India is looking at the opportunity to expand deeper into the continent as Africa is currently dealing with the economic fallout of the Covid pandemic and Russia’s war 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, according to reports.
The Indian Prime Minister has also been advocating the country as a representative of the Global South and employing 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,” India’s Foreign Minister Subrahmanyam Jaishankar said in a speech on June 28. “And ask ourselves where are we likely to be in 2047 and what should we be doing now to prepare for it,” he said.