India, China open a new ''Silk Road'' to Africa

Mumbai: Rising trade and investments from Asian countries, especially India and China, is fuelling economic growth in African countries, the World Bank said in a new study titled Africa's Silk Road: China and India's New Economic Frontier.

The study said 27 per cent of African exports are sold in Asia, up from 14 per cent in 2000 or three times the amount in 1990. Europe, Africa's traditional trade partner, has lost ground with a 50-per cent fall between 2000 and 2005 in the share of African exports to European Union members.

"This new Silk Road presents a significant, and to date, rare opportunity to accelerate Africa's growth, expand intra-African trade and hasten the continent's integration into the global economy," said the study by Harry Broadman, World Bank's economic advisor in the African region.

The study finds that existing Chinese and Indian investment in Africa is concentrated on raw materials, notably in the mining and oil sectors. The study also pointed out that investments by the two Asian countries "are fast diversifying outside the natural resources sector into the apparel, food processing, retail, fisheries, commercial real estate, labour-intensive light manufacturing and the services sector in ways that could help Africa move away from over-reliance on a few export commodities which has left the continent so vulnerable to economic shocks."

Over the last decade, South Africa's trade with China grew at an annual average rate of seven per cent to a total value of $7,350-billion. At the same time, the country's trade with India expanded at an average 16 per cent to $3,097-billion.

The average annual growth rate of Africa's imports from Asia was 13 per cent between 1990 and 1995, and accelerated to 18 per cent between 2000 and 2005. One-third of Africa's imports were from Asia, second only to the EU.

For India, gold was the major import from Africa, accounting for more than half (52 per cent) of all Indian imports and almost exclusively from South Africa. China's top three imports from South Africa were iron-ore and concentrates, diamonds and platinum. South Africa was almost an exclusive supplier of ore and diamonds to China, the study said