African countries are set to sign up to $3.5 billion worth of deals with Indonesia at the ongoing Indonesia-Africa summit a senior diplomat informed Bloomberg.
The agreements are set to be announced at the ongoing Indonesia-Africa Forum, which will run until Tuesday in Bali, Vice Foreign Affairs Minister Pahala Mansury stated in an interview last week.
He noted that the anticipated deals, valued at $3.5 billion, represent a significant increase compared to the approximately $600 million in agreements signed during the forum’s inaugural meeting in 2018.
One of the key partnerships involves Indonesian utility PT Perusahaan Listrik Negara collaborating with Tanzania Electric Supply Co. Ltd. to develop geothermal energy.
Additionally, PT Bio Farma and Ghana’s Atlantic Lifesciences Ltd. have agreed to work together on health technology transfer, according to a statement from the foreign affairs ministry released on Sunday. The ministry also mentioned that Congo and Senegal might be interested in purchasing and maintaining aircraft from PT Dirgantara Indonesia.
Vice Foreign Affairs Minister Pahala Mansury, “Indonesia will need to work with Africa because not all of the critical minerals that are required to produce battery materials are available in Indonesia”
“Amid geopolitical tensions between economic superpowers, this is a very good opportunity for Global South countries to work together rather than treat each other as a competitor,”
In a related development, PT Pertamina’s President Director Nicke Widyawati indicated that the company is exploring potential opportunities with Guma Group Ltd. to construct a power plant in South Africa, using gas supplied from Mozambique, as reported by the local media outlet Bisnis.
Indonesia’s plan to diversify trade
Indonesia has long sought to diversify its trade relationships beyond its major partners, such as China, the US, and Japan. This effort has become increasingly urgent as Indonesia faces challenges from a slowing Chinese economy, weak commodity prices, and rising protectionism, all of which present obstacles to the country’s export sector.
In 2023, Africa accounted for only $6.9 billion of Indonesia’s exports, representing less than 3% of the country’s total shipments. Resource-rich Africa is also poised to play a significant role in Indonesia’s plans to leverage its extensive nickel reserves to establish itself as a production hub for batteries.
As the United States and the European Union impose tariffs on China-made electric vehicles, disrupting carmakers’ production plans, Indonesia and Africa have the opportunity to collaborate in building a more robust global supply chain for batteries, according to the diplomat.
