The Tokyo International Conference on African Development is a great opportunity for Japan to expand its business in Africa, as the resource-rich continent begins to shed its dependence on aid to emerge as an attractive consumer market and a swelling population, according to the Foreign Ministry’s ambassador for TICAD V, Makoto Ito.
“The population is expected to grow in Africa, especially among the young, the working population. The continent is also rich in resources, and its economy is developing,” Ito told The Japan Times in a recent interview. “That growth will continue. It needs to be continued for the sake of Africa as well as the world economy.”
The fifth TICAD, running from Saturday to Monday in Yokohama, brings together leaders from over 40 African countries.
Ito said the Japanese government will beef up its support for the private sector by creating a more business-friendly environment in the region, such as by building infrastructure, fostering human resources and enhancing the role of its embassies. At the same time Japan will work to see that Africa’s current economic growth is sustainable, he said.
“The quality of growth needs to be enhanced. Africa’s economic growth hasn’t reached everyone on the continent,” Ito said.
When the first TICAD was held, in 1993, Africa was perceived as a continent of poverty and starvation. The region, however, has achieved surprising economic growth over the years thanks to the surging prices of natural resources amid rising demand in emerging economies, particularly China.
The combined sub-Saharan economy expanded by more than 5 percent on average between 2002 and 2011, and its trading volume quadrupled in the past decade, according to the International Monetary Fund.
The continent’s population is projected to exceed 2 billion by 2050 from about 1 billion in 2010, surpassing that of China and India, according to the United Nations Department of Economic and Social Affairs.
Its expanding markets and natural resources, including petroleum, natural gas, platinum and rare metals, are attracting investments from around the globe. Africa, however, still has many issues that require the attention of the international community, Ito said.
Income disparity, overreliance on resource trading, political instability and conflicts in some areas, including Somalia, are still major challenges facing the region, he said.
“Society, economy and peace are the three themes to be discussed at TICAD V. We need to discuss the issues and think of ways to tackle them in the next five years,” Ito said.
“We need to create a society in Africa where all citizens can benefit from its economic growth. The growth should be sustainable, and the countries also should proceed with industrialization.”
To help sustain growth, Ito said Japan plans to train workers, especially the young, to reduce high youth unemployment. Increasing capital flows from the private sector are also key to realizing sustainable economic growth, he said.
China’s growing presence on the continent shouldn’t alarm Japan, Ito said. The best course is for Japan to focus on what it does best to bring about a better future for Africa, he said.
“If China is doing what it can to benefit African nations, we welcome it. Japanese companies may also be able to use something China has made when we operate businesses on the continent,” Ito said. “I just hope China does what’s best for the continent. That’s it.”
China has increased its support and investment in Africa since the early 2000s, as its need for natural resources surges.
China has built infrastructure, including a new headquarters for the African Union in Addis Ababa, at a reported cost of some $200 million, and a parliament building in Malawi.
Total trade between China and Africa in 2011 amounted to about $166 billion, far surpassing the $30 billion with Japan, according to the Ministry of Economy, Trade and Industry.
Although Japan lags China in trade and aid to African countries, its advanced technologies, and its efficient support networks are widely appreciated by local people, Ito stressed.
“Japan’s technology is highly advanced. Roads we made are appreciated for their high quality. When we make things in Africa, we cooperate with local companies, and transfer our skills, and train local people,” Ito said. “In the case of China, when it constructs roads, it brings workers from China, and also materials such as cement from China.”
Japan has also provided grant assistance in rural areas by building schools and hospitals for decades, Ito said.
“Africa acclaims Japan for its support. They appreciate that Japan has continued to hold TICAD for 20 years,” Ito said. “It has become a core of Japan’s foreign diplomacy.”