IMF warned that a mere one percentage point decrease in China’s growth rate could precipitate a 0.25 percentage point drop in the average growth rate of the African region within a year, with oil-exporting nations like Angola and Nigeria bearing a potential loss of 0.5 percentage points on average
In a significant development reflecting changing economic dynamics in Africa due to ripple effects of China’s slowing economy extended to sovereign lending to sub-Saharan Africa, Indian trade officials convened with their Nigerian counterparts a Joint Trade Committee (JTC) meeting on May 3. The lending, according to IMF fell below $1 billion last year.
This meeting, as announced by India’s commerce and industry ministry underscores a strategic reevaluation amid China’s waning investments in the region.
The backdrop to this meeting is the dwindling presence of Chinese investments in Africa, particularly accentuated by an ongoing property crisis and economic slowdown in China. According to the International Monetary Fund (IMF), China’s sovereign lending to sub-Saharan Africa plummeted below $1 billion last year, marking its lowest level in almost two decades. IMF further warned that a mere one percentage point decrease in China’s growth rate could precipitate a 0.25 percentage point drop in the average growth rate of the African region within a year, with oil-exporting nations like Angola and Nigeria bearing a potential loss of 0.5 percentage points on average.
For the past two decades, China has wielded substantial economic influence in sub-Saharan Africa, emerging as the region’s largest single-country trading partner. Its import of one-fifth of the region’s exports—comprising metals, minerals, and fuel—alongside the provision of manufactured goods and machinery has entrenched its economic footprint in African markets, as highlighted by the IMF.
The Joint Trade Committee meeting signifies a strategic pivot in India-Nigeria relations, reflecting a broader recalibration of economic partnerships amidst evolving global dynamics. As China’s investments in Africa falter, India appears poised to deepen its economic footprint on the continent, forging mutually beneficial ties with key partners like Nigeria
The Indian delegation, led by Additional Secretary of the Department of Commerce, Ministry of Commerce and Industry, Amardeep Singh Bhatia, alongside High Commissioner of India to Nigeria, G. Balasubramanian, and Economic Adviser Priya P. Nair, engaged in substantive discussions with Nigerian counterparts in Abuja. The delegation, which included representatives from the Reserve Bank of India (RBI), EXIM Bank of India, and the National Payments Corporation of India (NPCI), emphasized the imperative of concluding the Local Currency Settlement System Agreement to bolster bilateral economic ties.
The deliberations encapsulated a comprehensive review of recent developments in bilateral trade and investment, with both sides identifying key areas for collaboration. These include addressing market access issues, fostering cooperation in sectors such as crude oil, natural gas, pharmaceuticals, Unified Payments Interface (UPI), and advancing the Local Currency Settlement System.
Nigeria stands as India’s second-largest trading partner in the African region, with bilateral trade reaching $11.8 billion in 2022-23. However, recent figures indicate a decline, with bilateral trade in 2023-24 standing at $7.89 billion. Despite this downturn, India’s engagement remains robust, with approximately 135 Indian companies invested in Nigeria’s dynamic market, spanning infrastructure, manufacturing, consumer goods, and services sectors.
The Joint Trade Committee meeting signifies a strategic pivot in India-Nigeria relations, reflecting a broader recalibration of economic partnerships amidst evolving global dynamics. As China’s investments in Africa falter, India appears poised to deepen its economic footprint on the continent, forging mutually beneficial ties with key partners like Nigeria.
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