China, India and Africa

The Organisation for Economic Cooperation and Development (OECD) says a booming India and China can be of benefit to economies in Africa. In a policy insight document, the Paris-based think-tank said there are a number of ways the continent can gain. The OECD says Indian and Chinese growth has dampened world inflation pressures, lowered global interest rates, and raised raw material prices. This in turn, it says, has helped to improve Africa's terms of trade.

It also says China and India are markets for African goods as well as competitors, especially in the export-oriented clothing and textile markets in which quotas to protect African exporters were removed in January 2005. "On the other hand, African consumers gain from cheap consumer goods sourced from the Asian drivers [India and China] and African investors from cheap and appropriate capital goods" the report says. The research paper also points out that China and Indian firms are increasingly outward-oriented and resource-hungry. It says this opens up many opportunities to African governments as Asian corporate presence in India increases. This can in turn be used by African nations as "a source of technology, skill formation and world market access, apart from foreign finance that come with the investment".

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