New Delhi, April 28 (IANS) India will provide a $450 million loan to finance the construction of a hydro-power project in Uganda and participate in oil and gas exploration, helping the East African country develop its energy sector as part of its multifaceted engagement with Sub-Saharan Africa, which the International Monetary Fund projects to replace Asia as the world’s fastest growing region over the next decade.
The 180 MW Isimba project on the river Victoria Nile in Kamuli district will be the fourth largest hydro-power project in Uganda, boosting the country’s energy security.
The credit facility and extension of cooperation in other areas such as oil and gas, IT, agriculture, food processing, and security were decided during a bilateral talks External Affairs Minister Salman Khurshid held April 17-18 in Kampala with Ugandan leaders.
Uganda, home to a large Indian diaspora, is an emerging oil and gas producer, and India wants to participate in the processing and exploration of oil and gas, train oil professionals and invest in the country’s petrochemical industry. Sub-Saharan Africa is also rich in commodities such as copper, iron ore and gold.
India will help Uganda in e-governance, training and setting up IT institutions. It will also fast-track the setting up of the India-Africa Institute of Foreign Trade in Uganda and a food processing industry incubation centre.
The country will also join a private sector partner to make modern agriculture equipment available to farmers. India has developed agro-processing modules that can be replicated there. The other important area covered in the talks was boosting bilateral trade. The two sides have agreed to reduce the trade imbalance, which remains in favour of India.
Two-way trade stands at $450 million, with India exporting goods worth $430 million in 2012. Uganda shipped goods worth $25 million to India during the same time.
The Indian government has extended duty-free and quota-free market access for 187 products from Africa which the Ugandan exporters can take advantage of and increase their exports to India.
According to Ugandan Foreign Minister Sam Kutesa, the two countries have put in place a follow up mechanism to monitor the implementation of the decisions reached during the discussions.
During the visit, his first to Africa, Khurshid also had a meeting with 18 heads of Indian missions of the region and discussed new initiatives to bolster peace and development in the region.
New Delhi sees peace and stability as prerequisites to the economic resurgence in Sub-Saharan Africa, whose economy the IMF said in its latest World Economic Outlook would grow 6.1 percent in 2014, more than the previous estimate of 5.7 percent and the 5.6 percent projected growth for this year.
A main driver of growth in 2014 will be the strengthening of activity in South Africa and other middle-income countries, predicated on improvements in the external environment, said the IMF report.
In contrast, the global economy will expand 4 percent next year, up from 3.3 percent in 2013.
At the same time, the African continent is in the midst of a “demographic boom” that is said to propel economic growth for a generation or more. Over 70 percent of Africa’s population is under 35 years of age, according to reports, and 40 percent is younger than 17, making it the youngest continent in the world.
This, analysts say, represents great consumer firepower. With the generation entering the work force, consumer spending in sub-Saharan Africa is forecast to rise 65 percent to nearly $1 trillion by the end of this decade.
For India, partnership with Africa in its development has been a policy priority. Economic and commercial ties between Africa and India have been on an upswing for some years now. At the 9th edition of India-Africa business conclave held in the Indian capital last month, business deals worth around $60-80 billion were struck.