What Modi means for Africa

Finweek English Edition - - INSIGHT - BY Merle O’Brien

If elec­tions are like New Year’s Eve res­o­lu­tions, when a fresh start can be made, South Africa and In­dia made dif­fer­ent choices in their May 2014 elec­tions. I n r e- elect i ng Pres­i­dent Ja­cob Zuma, South Africans chose to stay on the same path and count their bless­ings. In­di­ans used their 16th elec­tion to turn over a new leaf, change their game and take back their power en­trusted to the In­dian Na­tional Congress (INC) for 67 years since in­de­pen­dence in 1947.

In its place, t hey voted i n Shri Naren­dra Modi, leader of the Bharatiya Janata Party ( BJP), as its 15th prime min­is­ter. In a day, t he power base shifted from a frag­mented Con­gressl ed coali­tion, to a more de­ci­sive, con­sol­i­dated lead­er­ship. Eight months later, the world’s largest democ­racy is writ­ing a new story.

Ac­cord­ing to Forbes Mag­a­zine, the In­dian econ­omy is the best-per­form­ing Brics mar­ket and one of the world’s favourite emerg­ing mar­kets. In 2015, the In­dian econ­omy is ex­pected to grow by 6.3%. Un­der Modi, the Sen­sex c l i mbed a l most 30% a nd I ndian eq­ui­ties gained over $300bn.

His mar­ket-ori­en­tated ‘ Make in I nd i a’ i n i t i a t i v e i s a t t r a c t i ng mult i nat i ona l i nve s t or s like US-based Nike, Nor­way’s Te­lenor Group, China telecom­mu­ni­ca­tions e q u ip­ment-m a k e r Z T E Cor­po­ra­tion and Ja­pan’s Suzuki, in­clud­ing South Africa’s Sa­sol, Bid­vest, Nando’s, Sho­prite and Stan­dard Bank.

Fol­low­ing the an­nounce­ment of Modi’s Cabi­net, Stan­dard & Poor’s raised its credit rat­ing at BBBfrom neg­a­tive to sta­ble.

While Modi has the wind at his back, Zuma is fac­ing a head­wind, which makes progress more diff icult. At around 2%, SA’s growth is slug­gish; well be­low Africa’s av­er­age growth rate of 5.2%. FDI flows In 2013/14 In­dia at­tracted for­eign di­rect in­vest­ment of some $29bn, a f ig­ure set to dou­ble to $60bn fore­cast for 2015. SA, how­ever, at­tracted

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