CPP Warns Against ‘New Scramble for Africa’

The Convention People’s Party (CPP) has followed with absorbing interest the India-Africa Summit of 8-9th April 2008 in the Indian capital of New Delhi, which followed one held by China in Beijing in 2006 and a number of others between Africa and the European Union. At the end of the Indian Summit, a “Delhi Declaration” and “Africa-India Framework for Cooperation” were issued ostensibly to the satisfaction of both parties.

While the CPP fully supports cooperation between peoples and nations of good-will from all over the world, we are also worried that unless these “declarations” and “frameworks” are jointly developed to take proper account of the varied and sometimes even conflicting interests of the parties involved, African leaders may end up being unwitting participants in a new “Scramble for Africa” to the detriment of our people. In the original Scramble for Africa, the continent was carved up into competing spheres of foreign economic influences and its natural resources used to fuel Europe’s industrial revolution at the expense of Africa’s own development. We don’t want history to repeat itself.

In the case of the India Summit, the Delhi Declaration appears designed primarily to facilitate India’s quest for rapid industrialisation and development while implicitly seeking to cement Africa’s position in the global economy as the provider of raw materials for the industrialisation of other economies. Under the Delhi Declaration, India promises a US$5.4bn credit facility for African countries to import a range of industrial products from India, including tractors, water pumps, transportation equipment, and communication gear.

In return, India offers Africa “duty free” access to its market for the following: “cocoa, cotton, cashew nuts, sugarcane, ready-made garments, fish-fillets, copper and aluminium ore, as well as non-industrial diamonds.” With the exception of “ready-made garments”, which in any case may face resistance from India’s apparel industry, all the products for which Africa is seemingly being granted preferential access are the kinds of primary commodities whose concentration in Africa’s exports has contributed immensely to the continent’s economic and social stagnation.

Indeed, India already has negligible tariffs on most primary commodities from Africa, but maintains high tariffs on processed exports from the continent. This has the effect of promoting India’s industrial development through the conversion of raw materials into finished goods while retarding that of Africa because raw materials are exported unprocessed. For example, in order to promote its leather goods industry, India imposes only 0.1% tariff on raw hides from Africa but charges 14.7% and 15.0%, respectively, on leather and leather products from Africa. Indeed, an Indian-owned cashew company in Tanzania cannot export processed cashew to India due to high tariffs because India wants to protect the cashew processing industry in India. Numerous examples abound.

By proposing “duty free” access for African raw materials, whose tariffs are already very low, India is effectively offering nothing to Africa, while it uses low-interest government-subsidised loans to lure Indian finished products into Africa without offering reciprocal access for Africa’s finished products. We deem this unfair. It will lead to the collapse of African industry, create high unemployment, and worsen poverty on the continent.

We, therefore, call upon the African Union to scrutinise the Delhi Declaration carefully before giving it its full blessing. Specifically, the AU must ensure that the industrial goods from India are of the highest quality and can complement Africa’s own efforts at industrialisation and development. The AU should also ensure that India make explicit pledges to reduce not only tariffs on raw materials but also finished products from Africa.

Lastly, parallel to these attempts at global cooperation, we urge the AU to accelerate efforts at expanding trade among African countries. We believe that the 8.4% of Africa’s GDP that is traded among Africans, compared to 50.6% with the rest of the world, is unacceptable and leaves Africa vulnerable to all sorts of global trading enticements that may not always be to our benefit.

Forward Ever. Backward Never!