India & China emerging new economic giants in Africa

18 Sep '06

1 min read

A recent, massive increase in African trade and investment by Asia's two emerging economic giants-China and India-holds great potential for growth and job creation in Africa, if significant asymmetries within the regions' relationships are resolved, according to a new study by the World Bank.

Africa's Silk Road: China and India's New Economic Frontier recommends an array of trade and investment reforms within and between both regions to deepen the growing South-South ties and address imbalances that could prevent African economies to benefit from the increasingly important roles China and India play in the global economy.

Based on new evidence on the operations of Chinese and Indian businesses in Africa, the study finds Asia now receives 27 percent of Africa's exports, triple the amount in 1990; today's level is almost on par with Africa's exports to the US and EU, Africa's traditional trading partners.

Meanwhile, Asian exports to Africa are growing 18 percent per year, faster than to any other region in the world.

China and India's foreign direct investments in Africa are more modest than trade flows, but they are also growing very rapidly, according to the study.

World Bank

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