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Africa has launched a massive privatization drive of its infrastructure like ports, railways, and telecom attracting leading international players including Indian multinationals.
With no abatement in sight for the current geopolitical tensions, global attention is on the resource-rich Africa. The continent is viewed as an alternate route, source for trade, and destination for investments. But to reap the benefits, Africa must build its infrastructure. Realizing this, Africa has launched a massive privatization drive of its infrastructure like ports, railways, and telecom attracting leading international players including Indian multinationals.
Tanzania is also aggressively pursuing infrastructural upgradation. Early this year, the country announced the completion of the USD 420 million Dar es Salaam Maritime Gateway Project (DMGP). Expansion of its maritime infrastructure after it opened storage for cargo destined for four East African Community (EAC) states are also on the cards.
The recent entry of the Indian multinational port operator, Adani Ports, into the scene came as no surprise. Adani bagged a 30-year concession deal with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port, a strategic gateway. It is not only the principal port of Tanzania but also gives access to landlocked countries in the region including Zambia, the DRC, Burundi, Rwanda, Malawi, Uganda, and Zimbabwe. Besides this deal, Adani Ports has also signed a joint venture with Hutchison Port Holdings Ltd to acquire a 95 percent stake in the Special Economic Zone at the same port in Tanzania.
What is notable is, that Adani Ports will be competing with another global player, DP World in Tanzania. The UAE-based DP World is already engaged in revamping, improving, and boosting the port’s efficiency since last year, under a USD 250 million deal. It has a well-established African port portfolio with operations in countries such as Angola, Djibouti, and Egypt. Last year it announced an investment of USD 10 billion mainly in ports in Africa.In short, the port of Dar will witness competition from two global giants in Port management which is expected to boost its efficiency in cost and implementation.
Africa’s telecom sector is another area that has attracted Indian players. A recent interesting development is the entry of Jio, an Indian telecom leader owned by Reliance Industries (RIL). The company has partnered with Ghana’s state-owned enterprise, Next-Gen InfraCo (NGIC), for 4 and 5 G rollout. As a part of the deal, Radisys Corp, a subsidiary of the RIL, will support NGIC by providing smartphones, applications, and key network infrastructure to roll out 4 G and 5G in Ghana. Radisys will be part of the consortium including the government of Ghana, digital infrastructure provider Ascend Digital, Finnish tech and telecom firm Nokia, Swedish telecom firm Ericsson, and Indian IT services major Tech Mahindra. Jio is expected to bring its expertise in large-scale, high-volume, and low-cost core telecom infrastructure. But for sure, Jio with its deep pockets and appetite for mega projects is not going to be satisfied with a tiny foothold in Ghana. Ghana will be its launching pad for bigger plans in Africa.
The entry of Jio into Africa will impart a new dimension to Indian Multinational participation in Africa. It will take the rivalry between Jio and Airtel, the two Indian telecom giants, on home turf to African shores. Airtel Africa, a London-listed company has been well-established in Africa since 2010, when Bharti Airtel bought African operations from Kuwait’s Zain for $9 billion. Today it provides telecommunication and mobile services in 14 African countries.
In short, the African business landscape is becoming very exciting and competitive. Hopefully, this will translate into better terms of negotiations for Africa. Africa is gaining strategic importance due to its demography, market size, regional integration, and international cooperation. Its economic and strategic significance will further leap up in the coming years. Indian government should get proactive and strengthen the India-Africa partnership. It is hoped that the Modi government which began its 5-year term this month, will accord high priority to elevating India- Africa relations.
China has left the biggest footprint in Africa’s infrastructure development. It continues to be one of the biggest investors in infrastructure projects in sub-Saharan Africa, with a total investment of USD 155 bn over the past two decades. The United States recently announced its plan to invest around USD 1 billion in a railway line in Africa to connect the continent’s Copperbelt region in central Africa to a port in Angola. Between 2021 and 2027, through the Africa-EU Global Gateway Investment Package, the EU has announced € 150 billion worth of investments.
