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India Africa development cooperation: The Harambee Factor

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India–Africa development cooperation has emerged as a substantive and enduring pillars of South–South engagement, rooted in a shared historical experience of colonialism, a common developmental trajectory, and a mutual aspiration for strategic autonomy. Over the past two decades, this partnership has been institutionalised through the India–Africa Forum Summit (IAFS), which provided  political direction and programmatic depth. Through 3 summits, India translated its political goodwill into tangible outcomes across human resource development, concessional financing, and grant-based assistance. Yet, after a decade-long hiatus since the last summit in 2015, the moment calls not merely for revival but for a recalibration of this partnership in line with Africa’s evolving priorities and the shifting global context.

The most enduring success of India’s development cooperation in Africa lies in the domain of human resource development. India’s approach, unlike traditional donors, emphasized capacity building as a long-term investment rather than short-term project delivery. Through programmes like the Indian Technical and Economic Cooperation initiative, thousands of African professionals have been trained in areas ranging from public administration and information technology to agriculture, healthcare, and defence. This has created a wide network of African alumni with professional and institutional linkages to India. The Pan-African e-Network, which connected African universities and hospitals with Indian centres of excellence, represented an innovative model of technology-enabled capacity building, bringing education and healthcare access to remote regions. Scholarships and training programmes  strengthened this ecosystem, embedding India’s presence in Africa’s human capital formation. The success of this approach lies in its multiplier effect: it builds indigenous capacity, fosters institutional resilience, and generates enduring goodwill that transcends transactional engagement.

Complementing this has been India’s use of concessional Lines of Credit, which have financed a wide range of infrastructure and development projects across 41 African countries. These included projects in power transmission, rural electrification, agriculture, transport, and water systems. For African governments, these LOCs provided an alternative to traditional finance, enabling them to pursue development projects aligned with national priorities. However, over time, the limitations of this model have become apparent. Concerns over debt sustainability have grown, particularly in a global environment marked by rising interest rates and currency volatility. Project implementation has sometimes been slow. While LOCs played a critical role in the earlier phase of engagement (2003-2018), their centrality in the partnership is now reassessed.

Grant assistance, though smaller in scale, served as a visible  component of India’s engagement. These  supported capacity-building institutions, community development projects, and technology demonstration initiatives. The IT centres , the vocational training and entrepreneurship development centres and now the IIT Zanzibar are important achievements. At the continental level, India has attempted to work with the African Union and regional organizations, though outcomes have depended on local ownership, budget support and passion among institutional partners. Grants  retained their symbolic value as instruments of solidarity and partnership.

The urgency of rethinking India–Africa development cooperation has been heightened by recent global developments. A joint report by the African Development Bank, the United Nations Economic Commission for Africa, and the African Union in April 2026 has underscored the vulnerability of African economies to external shocks, particularly in the context of the ongoing Middle East crisis linked to Iran. The report warns of a slowdown in economic growth, widespread currency depreciation, rising inflation, and severe disruptions to food and fertilizer supply chains. Many African countries remain dependent on West Asia for a significant share of their imports, making them particularly susceptible to geopolitical disruptions. The crisis threatens agricultural productivity during critical planting seasons, raising the spectre of food insecurity for millions. At the same time, rising shipping and insurance costs are straining trade logistics, while humanitarian resources risk being diverted away from the continent.

Yet, within these challenges lie opportunities that align closely with Africa’s long-term priorities. The crisis has reinforced the imperative of building self-reliance in key sectors such as fertilizer production, energy security, and manufacturing. It has also highlighted the importance of accelerating the African Continental Free Trade Area as a mechanism for strengthening intra-African trade and reducing external dependencies. For India, this evolving context underscores the need to align its development cooperation more closely with Africa’s emphasis on resilience, sustainability, and structural transformation.

The proposed convening of the fourth India–Africa Forum Summit offers a critical opportunity to reset the partnership. There is a long gap since the previous summit, but recent diplomatic developments, including renewed interaction with the African Union leadership, suggest that the time is ripe for revitalisation. A more focused format for the summit, drawing on earlier models that engaged key African stakeholders and regional organisations, may enable more substantive and outcome-oriented discussions. Equally important is the need to institutionalise regular political dialogue with the African Union Commission and its leadership, ensuring that India’s engagement is aligned with continental priorities such as Agenda 2063.

A central element of this recalibration must be a shift from a loan-driven approach to one anchored in investment and private sector participation. African countries are increasingly wary of accumulating sovereign debt and are seeking partnerships that promote sustainable economic growth without exacerbating fiscal vulnerabilities. India’s growing footprint in Africa, reflected in substantial levels of trade and investment, provides a strong foundation for such a transition. However, unlocking the full potential of this engagement will require a more proactive strategy. An India Development Initiative, bringing together government, industry, financial institutions, and academia, could serve as a platform for promoting an FDI-led model of cooperation. This would involve supporting Indian companies in exploring opportunities in Africa, particularly in sectors aligned with continental priorities such as manufacturing, agriculture, healthcare, and renewable energy. Mechanisms such as risk guarantees, concessional financing for private ventures, and support for feasibility studies could help bridge the gap between intent and implementation.

An equally important dimension is India’s engagement with African financial institutions, particularly regional development banks that are increasingly shaping the continent’s development landscape. Institutions such as the African Export-Import Bank, the Trade and Development Bank, and the ECOWAS Bank for Investment and Development are playing a growing role in financing projects aligned with regional priorities. These institutions are often more agile and better attuned to local needs than global multilateral development banks. India’s current level of engagement with these institutions does not reflect its broader economic presence in Africa. Enhancing India’s participation, both financially and institutionally, would not only strengthen these banks but also create new opportunities for Indian companies to participate in Africa’s development.

The next phase of human resource development must also evolve to reflect emerging global trends. While traditional training programmes remain important, there is a growing need to focus on skills relevant to the digital economy, climate adaptation, renewable energy, and advanced healthcare systems. Expanding and modernising training programmes, including through digital platforms, will be essential to maintaining the relevance of India’s capacity-building initiatives. In parallel, greater emphasis should be placed on institutional partnerships between Indian and African universities, research centres, and think tanks.

The convergence of development and security has also become increasingly evident in India–Africa relations. Initiatives such as joint military exercises, training programmes, and high-level defence dialogues reflect a recognition that sustainable development cannot be achieved in the absence of stability. India’s long-standing role in UN peacekeeping operations in Africa, combined with its experience in  counter-insurgency, disaster management, and maritime security, positions it as a valuable partner. Strengthening institutional frameworks for defence cooperation, including engagement with the African Union’s peace and security architecture, will be an important component of the broader partnership.

In this evolving landscape, the rise of impact investing has added a new and promising dimension to India–Africa cooperation. The Sankalp Africa Summits, convened annually in Nairobi, have emerged as important platforms bringing together entrepreneurs, investors, development institutions, and policymakers to catalyse investments aligned with the Sustainable Development Goals. By focusing on sectors such as agriculture, financial inclusion, clean energy, and healthcare, these summits have demonstrated how blended finance and innovative capital can support scalable solutions to development challenges. They have also helped build an ecosystem that connects Indian and African startups and investors, nudging the partnership towards a more entrepreneurial and sustainability-driven model of engagement.

At a broader level, India and Africa have a shared interest in shaping a new narrative for the Global South. Both have advocated for reforms in global governance institutions, greater representation in multilateral forums, and development models that are inclusive and sustainable. India’s effort to secure permanent membership for the African Union in the G20 and its convening of the Voice of the Global South Summit reflect this shared vision. The challenge now is to translate this political alignment into concrete initiatives that address the developmental needs of both partners.

In conclusion, India–Africa development cooperation stands at a critical juncture. The achievements of the past, particularly under the IAFS framework, provide a strong foundation, but the demands of the present require a shift in approach. The emphasis must move towards investment-driven growth, deeper engagement with African institutions, advanced capacity building, and a closer alignment with African priorities. The revival of the India–Africa Forum Summit is not merely an opportunity to renew commitments but to redefine the partnership for a new era. In doing so, India and Africa can together craft a model of cooperation that is resilient, responsive, and reflective of the aspirations of the Global South.

Ambassador Gurjit Singh is former Ambassador to the African Union and author of The Harambee Factor

New directive to liberalize core logistics operations, foreign players set to enter

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As part of a series of bold economic reforms, the Ethiopian government is set to invite foreign investors to operate freely in the logistics sector—an area previously closed to international players and reserved exclusively for local providers.

The new directive, recently unveiled by government officials, is expected to take effect before the end of the year, though an implementation date was not specified. Sources familiar with the matter told Capital that the legal process to liberalize core logistics operations is currently underway within relevant government authorities.

“The decision, which has been discussed for the past few years as part of the government’s bold reform agenda, will become effective at the start of the coming budget year,” these sources stated.

Foreign investors operating in Ethiopia have long cited the logistics sector as a major challenge. Some countries and interest groups have pressed the government to open up the sector, similar to reforms that have largely liberalized the finance and telecommunications industries over the past few years.

However, the government’s latest move has not been well received by local logistics operators. While acknowledging that the sector remains a bottleneck for the national economy and for doing business in the country, local industry players argue that the government has failed to provide the necessary understanding and attention for its growth and effective economic support. According to industry insiders, a lack of government focus on issues such as insurance access and financing has hindered the sector’s development.

Dawit Woubeshet, CEO of Cosmos and President of the Ethiopian Freight Forwarders and Shipping Agents Association, confirmed that Ahmed Shide, Ethiopia’s Minister of Finance, recently announced the decision to open the logistics sector at an industry event. Dawit recalled asking the Minister during a panel discussion what tangible benefits the country would gain from this liberalization. “I asked what advantage the country would benefit from liberalizing the sector,” Dawit told Capital.

Logistics experts interviewed by Capital noted that Ethiopia handles fewer than 300,000 containers annually—a volume that a single large Chinese logistics firm could easily absorb. “Due to this, there may not be significant interest from international players. If any do show interest, it would likely be in the multimodal transport sector,” one expert said.

A local logistics operator further argued that Ethiopian customs clearance is not particularly difficult to manage. “The volume of Ethiopian cargo is very small and can be handled by local operators,” he said. “Rather than allowing local firms to be swallowed up by monopolies, it would be better to help us enhance our capacity and expertise to operate seamlessly.”

Experts point out that the Ethiopian government, unlike its approach to the banking and telecom sectors, did not protect and strengthen the logistics industry before opening it up. Consequently, the sector has suffered from a lack of proper understanding and government attention, leading to limited access to financing and land for investment.

Even with market liberalization, some analysts doubt that major global logistics firms will be attracted. They cite Ethiopia’s relatively small economy and the slow inflow of foreign direct investment (FDI) as disincentives for large international operators. As one expert put it, “Foreign operators will ask what the benefit is of investing in the country. The cargo volume is very limited, and there are other conditions that make the market unattractive.”

Some observers suggest that the move towards liberalization may be primarily a political commitment, aimed at fulfilling World Trade Organization (WTO) accession requirements or satisfying foreign governments whose logistics companies are interested in Ethiopia.

An industry expert reiterated this view: “Logistics is one of the preconditions [for WTO accession]. So opening up the sector may be a political decision, but I do not expect companies to be interested in investing in Ethiopia’s logistics sector.”

Ethiopia, the world’s most populous landlocked nation, faces one of the most expensive logistics environments globally, a factor experts say deters potential investors. Despite this, the government has recently undertaken significant reforms and infrastructure projects to boost the sector.

These reforms include ending the multimodal transport monopoly previously held by the state-owned Ethiopian Shipping and Logistics (ESL) by licensing six additional operators. Simultaneously, the logistics business was liberalized to permit up to 49 percent foreign ownership, a move that attracted Ceva, Bolloré Logistics, and DHL to acquire stakes in joint ventures with Ethiopian Airlines Group.

However, while some experts see the entry of these companies as a sign of foreign interest, others remain skeptical. One expert starkly noted, “A single large company handles more volume than the entire country of Ethiopia. There is no attractive market here unless the economy improves dramatically.”

Adding to the challenges, the Office of the United States Trade Representative’s ‘2026 National Trade Estimate Report on Foreign Trade Barriers’, published three weeks ago, revealed that logistics costs in Ethiopia constitute approximately 22 to 27 percent of final product prices. Furthermore, shipping and freight costs are roughly 60 percent higher than in neighboring countries.

The Ethiopian government has assured its partners that complementary measures, including finalizing a legal framework for liberalizing key logistics sub-sectors like dry ports, freight forwarding, and logistics services, are expected to be completed by the end of December.