Indonesia is set to sign trade and investment agreements worth USD 3.5 billion (approximately IDR 54.32 trillion) with African countries, as it seeks new markets beyond Asia amid ongoing global trade tensions. These agreements will be announced during the 2024 Indonesia-Africa Forum, which is currently taking place in Bali and will continue until Tuesday, according to Deputy Foreign Minister Pahala Mansury. The target is significantly higher than the USD 600 million agreements signed during the inaugural meeting in 2018. Key projects include those in the gas sector, with Indonesian companies aiming to produce fertilizer and ammonia in Africa. Additionally, there will be agreements in the health and agriculture sectors, focusing on exporting more vaccines, pharmaceuticals, and food products to the continent.
Indonesia has long sought to diversify its trade beyond key partners such as China, the United States, and Japan. This effort has become more urgent due to China's struggling economy, weak commodity prices, and rising protectionism, which pose challenges for Indonesia's export sector. Kenya, Nigeria, South Africa, and Egypt, with their rapidly growing populations, are seen as promising export markets for Southeast Asia's largest economy. Mansury added that the Ministry of Foreign Affairs is pushing for better market access for Indonesian commodities. While Africa accounted for only USD 6.9 billion of Indonesia's exports in 2023, less than 3% of total shipments, the resource-rich continent is poised to play a crucial role in Indonesia's ambition to leverage its vast nickel reserves and become a battery production hub. Collaboration with Africa is essential as Indonesia lacks some critical minerals needed for battery production, such as lithium, cobalt, and graphite. The talks are still in the exploratory stage, awaiting geophysical survey results. Mansury emphasized that amidst geopolitical tensions among economic superpowers, this presents a significant opportunity for Southern Hemisphere nations to collaborate rather than compete.
