India, Africa face similar challenges, can learn together

Africa-India trade has multiplied in the last 15 years. It has doubled in the last five years to reach nearly $72 billion in 2014-15. India’s commodity trade with Africa in 2015-16 was higher than our commodity trade with the United States of America.

Our partnership is not confined to governments alone. India’s private sector is at the forefront of driving this impetus. From 1996 to 2016, Africa accounted for nearly one-fifth of Indian overseas direct investments. India is the fifth-largest country investing in the continent, with investments over the past 20 years amounting to $54 billion, creating jobs for Africans.

We are encouraged by the response of African countries to the International Solar Alliance initiative, which was launched at the UN Climate Change Conference in Paris in November 2015. The alliance is conceived as a coalition of countries rich in solar resources to address their special energy needs. I am happy to note that many African countries have extended their support to this initiative.

As a founder of the New Development Bank (NDB), popularly called the BRICS bank, India has consistently supported establishment of a regional centre in South Africa. This will provide a platform to promote collaboration between NDB and other development partners including the African Development Bank.

India joined the African Development Fund in 1982 and the African Development Bank in 1983. India has contributed to all of the bank’s general capital increases. For the most recent African Development Fund replenishment, India pledged $29 million. We have contributed to the highly indebted poor countries and multilateral debt reduction initiatives.

Here in India, I have launched an initiative to double farmers’ incomes by 2022. It will require concerted steps, ranging from improved seeds and optimal inputs to reduced crop losses and better marketing infrastructure. India is keen to learn from your experiences as we proceed on this initiative.

My African brothers and sisters, many of the challenges we face are the same: uplifting our farmers and the poor, empowering women, ensuring our rural communities have access to finance, building infrastructure. We have to do these within financial constraints. We have to maintain macroeconomic stability so that inflation is controlled and our balance of payments is stable. There is much for us to gain by sharing our experiences on all these fronts. For example, in our push to a less-cash economy, we have learnt from the great strides that African countries like Kenya have made in the area of mobile banking.

I am happy to share that India has, in the last three years, improved on all macroeconomic indicators. The fiscal deficit, balance of payments deficit, and inflation are down. The GDP growth rate, foreign exchange reserves and public capital investment are up. At the same time, we have made big strides in development.

Mr President of the African Development Bank, it is reported that you have described our recent steps as textbook chapters for other developing nations and called us a development beacon. While thanking you for these kind words, I am also glad to know that you have spent quite some time training in Hyderabad earlier. However, I must say that I remain focused on the many challenges ahead. In that context, I thought I could share with you some of the strategies we have used in the last three years.

By paying subsidies directly to the poor rather than indirectly through price concessions, we have achieved large fiscal savings. In cooking gas alone we have saved over $4 billion in three years. In addition, I appealed to well-off citizens to voluntarily give up their gas subsidy. Under the Give it Up campaign, we promised the saving would be used to provide a connection to a poor family. You will be surprised to know that over 10 million Indians volunteered to do so. Thanks to the savings, we have launched a programme to provide gas connections to 50 million poor families. More than 15 million connections have already been provided. This transforms the lives of rural women. It frees them from the health hazards of cooking with firewood. It also protects the environment and reduces pollution. This is an example of what I call “reform to transform” — a concerted set of actions which transform lives.

Some of the subsidised urea fertiliser intended for farmers used to get illegally diverted to non-agricultural uses, like production of chemicals. We introduced universal neem-coating of urea. This makes the fertiliser unsuitable for diversion. Not only have we got substantial financial savings but in addition, studies have shown that neem-coating has improved the effectiveness of the fertiliser.

We are also providing our farmers with soil health cards, which tell them the exact nature of their soil, and advise the best mix of inputs. This promotes optimal use of inputs, and increases crop yield.

We have made unprecedented increases in capital investment in infrastructure, covering railways, highways, power, and gas pipelines. By next year, no village in India will be without electricity. Our Clean Ganga, Renewable Energy, Digital India, Smart Cities, Housing for All and Skill India missions are preparing us for a cleaner, more prosperous, faster growing and modern new India. Our aim is that India must be an engine of growth as well as an example in climate-friendly development in the years to come.

There are two crucial factors, which have helped us. The first set of changes is in the banking system. In the last THREE years, we have achieved universal banking. We launched the Jan-Dhan Yojana or People’s Money campaign under which over 280 million bank accounts have been opened for the poor in urban and rural areas. Thanks to that initiative, virtually every Indian family has a bank account. Normally, banks are associated with helping businesses and the rich. We have enlisted them for helping the poor in their quest for development. We have strengthened our state-owned banks by freeing them from political decisions and appointing professional chief executives on merit through a transparent selection process.

Our universal biometric identification system called Aadhaar has been the second crucial element. It prevents claiming of benefits by those who are not eligible. It enables us to ensure that those who deserve government aid receive it with ease, while excluding non-genuine claims.

Edited excerpts from Prime Minister Narendra Modi’s speech at the inauguration of the annual meeting of the African Development Bank in Gandhinagar on May 23