21.09.2023 Opinion

Jokowi's African Outreach: Paving the Way for Indonesia's Private Sector

By Arsjad Rasjid
Jokowi's African Outreach: Paving the Way for Indonesia's Private Sector
21.09.2023 LISTEN

In an era marked by the convergence of global destinies and the pursuit of innovative partnerships, President Joko Widodo, affectionately known as Jokowi, embarked on a historic unprecedented trip that has reignited Indonesia’s strong standing in Africa as well as the wider world. As leaders of the ASEAN business community, we were encouraged by the outcome.

President Jokowi’s five-day whirlwind tour in August 2023 to three African nations—Kenya, Tanzania, and Mozambique—before converging as an observer at the BRICS summit in South Africa, was no ordinary diplomatic voyage. It was a fervent endeavor sparking what the president called the 'Spirit of Bandung', a reference to Indonesia's pivotal role in birthing the Asian-African Conference in Bandung, West Java, in 1955—an event that sought to forge global unity against colonialism while nurturing economic and cultural ties among newly independent nations. The gathering laid the foundation for the Non-Aligned Movement during the Cold War.

While Indonesia's historical ties with Africa have remained robust over the years, President Jokowi's decision to make this unprecedented trip underscored the nation's renewed commitment to bolstering global solidarity, with a particular focus on sustainable development. In a symbolic gesture, President Jokowi celebrated the recent establishment of Kenyan and Tanzanian embassies in Indonesia, declaring his visit a 'follow-up' to their mutual eagerness to enhance cooperation.

Following bilateral talks with President William Ruto of Kenya and President Samia Suluhu Hassan of Tanzania, a cascade of agreements emerged, touching on pivotal issues like energy, healthcare, agriculture, textiles, apparel, and security. In Mozambique, a nation enjoying a preferential trade agreement (PTA) with Indonesia since 2022, President Jokowi underscored the significance of commerce in amplifying existing PTA benefits, with a keen eye on energy and healthcare investments. Across the board, the leaders concurred on the necessity of involving both public and private sectors to stimulate trade and investments.

As Africa's population burgeons, currently constituting 17% of the world's populace—a figure projected to double by 2050 according to the United Nations (UN)—the continent has naturally become a focal point for discussions on market opportunities and sustainable development. Indonesia itself shares striking demographic parallels with Africa, paving the way for it to be a harmonious partner. Both regions enjoy a demographic advantage, often dubbed the 'demographic dividend.' While Africa boasts a youthful population with 75% under the age of 35 and high fertility rates, Indonesia, though not as extreme, still holds a significant 70% of its population between the ages of 15 and 64. This synergy offers the prospect of a dynamic, productivity-driven alliance capable of propelling economic growth on both fronts.

Crucially, the cornerstone of realizing these shared opportunities lies in amplifying the role of the private sector, as emphasized throughout these bilateral dialogues. A United Nations Environmental Programme (UNEP) report published last month pointed out that Africa's private sector is the linchpin for enhancing its green agenda, driving GDP growth, elevating income per capita, creating millions of jobs, and fostering collaboration among governments, businesses, and local communities. Through heightened cooperation, Indonesia's private sector can play a pivotal role in this endeavor, drawing from its successful experience with a private-led development model on home turf.

One arena where Indonesia can demonstrate its prowess is within the energy sector. Companies like our ownIndika Energy Group have harnessed innovation and technology to spearhead Indonesia's transition toward sustainability. Today, Indika Energy stands tall as one of Indonesia's premier diversified holding companies, with a sprawling portfolio encompassing energy, logistics, infrastructure, minerals, green initiatives, and digital ventures.

Indonesia, much like Africa, is blessed with abundant critical minerals, including nickel, crucial for Electric Vehicle (EV) batteries. However, the environmental challenges tied to mineral processing have been a stumbling block for Indonesia's sustainability goals. Indika Energy, a pioneer in this realm, employs cutting-edge DNi technology to produce high-grade nickel from lower-grade ores while recycling over 98% of nitric acid and minimizing waste streams. As Africa's total nickel reserves remain untapped, countries like South Africa, Zimbabwe, Tanzania, Madagascar, Zambia, and the Ivory Coast possess significant deposits of other vital minerals. Indika Energy's ability to adapt and efficiently utilize such technological solutions directly aligns with Africa's growing role as a supplier of critical minerals.

Another promising avenue for partnership emerges in Africa's burgeoning EV consumer market. With road transport accounting for a substantial portion of global emissions, the introduction of EVs into the African market has gained importance, as highlighted by Mr. Antonio Pedro, Executive Secretary of the United Nations Economic Commission for Africa. In 2023, Africa's Two-Wheeler Market is estimated at USD 3.35 billion, projected to soar to USD 5.40 billion by 2028. Likewise, Indonesia boasts a thriving Two-Wheeler market, ranking as the third-largest globally. Public and private entities have united in prioritizing EVs in their carbon-neutral strategies. Indika Energy, for instance, spearheaded a joint venture resulting in ALVA, a comprehensive EV mobility solution. ALVA offers not only high-performance electric two-wheelers but also an extensive network of fast-charging points across major Indonesian cities.

In essence, Indonesia's shared synergies with Africa present a wealth of opportunities, led by both governments and private enterprises. President Jokowi's visit signifies Indonesia's unwavering commitment, but the next pivotal step lies in fostering an enabling business environment. The stage is set for an exhilarating journey toward unlocking the future, where two regions harness their collective strengths to ignite progress and prosperity for all.

Arsjad Rasjid chairs the Indonesian Chamber of Commerce and Industry (KADIN Indonesia) and the ASEAN Business Advisory Council (ASEAN-BAC), and is President Director of Indika Energy