This week, Tanzania joined its Indian friends in celebrating 67 years of independence on this momentous date in Indian history and this provides us with an opportunity to reflect on India's growing global weight and, in particular, the enormous contribution that India and Indian people have made to the economy of Tanzania and to Africa in general.
India's relationship with Africa has witnessed an upsurge over the past years by the establishment of The India-Africa Business Council (IABC) which serves as the chief instrument of engagement between India and Africa.
This repositioning of Africa in terms of India was manifested in State Minister of External Affairs Mrs. Preneet Kaur's recent visit to Dar es Salaam, a further indication of India's intentions to intensify and broaden its engagement with Africa.
Mrs. Preneet Kaur sought to strengthen existing bilateral relations with Tanzania that would focus on areas of cooperation such as defense and security; trade, economic development and socio-cultural cooperation.
These areas of co-operation will harness the relations India has with Tanzania towards a common and bilateral approach to addressing critical challenges of development. Tanzania and India must regard economic development as being decisive to this partnership.
Towards this end, both countries should seek to improve the current economic interactions for the mutual benefit of both. Finally, building on the strong and solid government-to-government relations, Tanzania and India should promote people-to-people contact in order to facilitate socio-cultural exchanges needed to understand and appreciate each other better.
In light of Tanzania's own commitment, focus and contribution to the regeneration of the African continent, it is important to engage India in harmonising, synchronising and aligning IABC with the policies and positions of the African Union (AU), including New Partnership for Africa's Development (Nepad). Nepad has already been developed as the integrated socio-economic development framework for Africa and therefore provides a basis upon which Africa and India could engage deeper. Within the Nepad process, specific action plans have been developed in the various priority sectors.
The scope for India to assist in scaling up and accelerating the implementation of these action plans is huge. In the past seven years India and Africa have witnessed a five-fold increase in their trade volume at US$65 billion. In 2012 India's trade with Tanzania stood at nearly US$1.4 billion and all indications are that it will continue to rise as commodity prices, Tanzania's main competitive advantage, remain in demand.
A lot of focus should not only be put on India's engagement with Tanzania in terms of market access for Indian products as well as access to mineral and energy resources. However, the full picture should be one of a mutually beneficial relationship that includes, among others, support for the Tanzanian Agenda; skills and knowledge transfer; increased Foreign Direct Investments (FDI) in the agricultural processing, road and bridge construction, power, telecoms, textiles, tourism; and Export Processing Zones (EPZs) as well as Special Economic Zones (SEZs) that would expose Tanzania's markets to India and vice-versa.
Both Tanzania and India seem to be satisfied with the progress made, thus far, in implementing policy measures announced by the Tanzania-Joint Commission agreed by both countries to boost practical co-operation with each with other.
The bilateral relations between Tanzania and India are underpinned by a series of joint agreements, memoranda, programmes of action, joint declarations and exchange notes exist between the two countries. These cover, among other things, diplomatic relations, protection of investments, trade, scientific and technological exchanges, water, double tax avoidance, and arts and culture.
India is one of the top five largest export destinations for Tanzania and offers a large import market. Tanzania's exports to India consist mostly of gold and commodities such as cashew nuts, pulses, spices, precious stones, raw hides and skins, wood and wood products, cotton, tobacco, coffee and fish.
Exports from India to Tanzania consist mostly of oil products, pharmaceutical products, iron, alloy steel, electrical apparatus, motor vehicles, machines and mechanical appliances, tractors. Tanzania is a key trade partner for India, accounting for US$918.72 million in imports from, and US$505.61 million in exports to, India for the period January - June 2013.
Hence, the balance of trade is in favour of India by US$413.11million. Bilateral trade is clearly dominated by commodity exports from Tanzania and value-added imports from India. The current structure of Tanzania's trade is, therefore, skewed in favour of India and unsustainable in the long-term.
In recognition of this factor, President Dr. Jakaya Kikwete of Tanzania and President Pranab Mukherjee of India should pronounce that the two countries need to work towards establishing a more equitable trade balance and to establish a win-win situation.
A growth and development partnership framework should be initiated by the Minister of Industry and Trade Hon. Dr. Abdallah Kigoda (MP) to help address the current imbalance in bilateral trade.
The main objective is to ensure that Tanzania enters into a structured and predictable arrangement with India as, amongst other things, to:shift the structure of Tanzania's trade to a more sustainable route by increasing the value of Tanzanian exports to India, with a particular focus on manufactured and processed agricultural products, secure support to Tanzania's mineral, oil and gas beneficiation strategy; and establish balanced bilateral investment flows in terms of both quantum and kind.
The importance of Thursday's Tanzania and Africa for India is self-evident. The Tanzania-India bilateral relationship remains amongst one of the most dynamic in the world today. As an emerging power, India provides a good opportunity for balancing the global distribution of power in favour of a multipolar world, which is more conducive to multi-lateralism as well as creating a just and equal world in which we live.
Nowhere is the significance of Tanzania and other African nations felt more than on the issue of the expansion of the United Nations Security Council! The need to engage Africa also arises from the large number of Indian people across the continent. And then there's the economic factor, including the availability of natural resources and the enormous market with an expanding middle-class that Tanzania and Africa offer.
Overall, Tanzania and Africa are slated to be a major global manufacturing hub in the future. And already the natural compliments between India and Africa as well as the excellent political relations mean that the India-Africa partnership will expand over the coming years.
The author, Paul Kibuuka, is the Managing Partner of Kibuuka Law Chambers, a highly specialized Tanzania-based East African corporate, commercial and financial law firm.