'India, Africa must look at opportunities for diversification'

Mumbai: The fast-growing economies in India and Africa will have to diversify to cash in on the boom in many sectors, a top African economist said today.

Former president of African Development Bank Donald Kaberuka identified agri-business, IT, financial services, healthcare and infrastructure as the key sectors which could be tapped for future growth.

"Both the Indian and African economies have seen rapid expansion of services in the past. As both regions continue to register faster growth, they should look at opportunities for diversification, both at the country as well as sectoral levels, like agri-business, IT, financial services, healthcare and infrastructure," Kaberuka said.

Delivering the Exim Bank's 31st Commencement Day annual lecture here, he drew references to gradual evolution of both regions in the new economic environment.

Kaberuka, ex-finance minister of Rwanda, also mentioned the growing trade and investment flows between Africa and India, which stands at about USD 76 billion, up from USD 38 billion in 2008, while the African economy grew five times since 2000.

He observed that the past 50 years have been phenomenal in global economic history, as billions of people were lifted out of poverty by advances in globalisation, thereby reducing the cost of doing business, increasing inter-connectedness and providing opportunities around global value chains for all countries.

Recalling the discussions at the last World Economic Forum in Davos, he described the new economic order as the "fourth industrial revolution" with new opportunities but also disruptions in traditional business models on the back of advances such as in artificial intelligence.

Both India and Africa must determine how best to mitigate the downside while taking advantage of opportunities that they have, Kaberuka said.