Business / Economy | TICAD 7 Special

JAPANESE BUSINESS IN AFRICA

Africa commerce succeeds through new partnerships

by Nobuhiko Sasaki

Chairman And Ceo, Japan External Trade Organization

The shift from “aid” to “business” in Africa since The Fourth Tokyo International Conference on African Development (TICAD IV) in 2008 has become mainstream. This happened throughout TICAD V (2013) and TICAD VI (2016), the first conference held in Africa (Nairobi, Kenya). Private enterprise is now in the driver’s seat of Africa’s development.

Under these circumstances, the Japan Business Council for Africa was established in Tokyo in June. This is a platform aimed at the Japanese private sector, where ambition to do business in Africa runs high, under the full support of the Japanese government. The Japan External Trade Organization (JETRO) serves as part of its secretariat.

Among rising interest in African business, and as an organization tasked with supporting Japanese companies’ expansion abroad, JETRO understands that its role in helping develop the trade relationship between Africa and Japan is all the more important today. We are particularly focused on the following four themes.

First is broadening the fields of Japanese business in Africa. According to the Ministry of Foreign Affairs, there were a total of 75,531 overseas business sites of Japanese companies in the world in 2017. Among them, 796 are in Africa — just over 1 percent. Traditionally, Japanese companies’ business in Africa has greatly leaned toward infrastructure, natural resources and automobiles. From now, it is necessary to build diversified economic relations with Africa.

The key to this diversification is small and midsized enterprises (SMEs), which account for 99.7 percent of all Japanese companies. Even in the era of the internet, for SMEs, Africa is a region with high psychological hurdles, as well as actual risks. However, as the Japanese market shrinks, SMEs now have to look overseas. Given this, it is clear they cannot afford to overlook the continent that will become home to 25 percent of the globe’s population by 2050. JETRO will ensure that these SMEs have the information they need on Africa, leveraging our network throughout Japan.

In supporting Japanese SMEs, JETRO will also work with the United Nations programs such as the United Nations Development Programme (UNDP) and United Nations Industrial Development Organization, as well as development organizations such as the Japan International Cooperation Agency (JICA). Through our combined strengths, we will increase the certainty of SMEs succeeding in Africa.

Second is promoting alliances between Japanese companies and those from Africa or other countries. Collaboration with not only local enterprises in Africa, but also those companies with business knowledge and proven track records from France, the U.K., Turkey or India helps Japanese firms in managing risks, seeking projects and expanding sales and service channels. JETRO will facilitate this process through our global network spanning 74 offices in 54 countries and 48 offices located throughout each of Japan’s prefectures.

Third is matching Japanese companies and startups from Africa. The digital economy has drastically transformed the business environment, even in emerging and developing countries. Africa is no exception. As exemplified by “M-Pesa” in Kenya, the rapid dissemination of services such as those for mobile money has given rise to new business.

As a result, we are seeing an accumulation of consumer data from the market’s lower income sector, which had long been difficult to obtain, as information that can help business. It is local African startups that have been creating new business models to solve social issues with this big data, and they are drawing the attention of Japanese companies as potential new partners for entering the market. JETRO regards accelerating collaboration between both sides as vital for expanding business opportunities.

Lastly, improving the business environment through self-reliance within each African country is requisite to expanding investment from Japan. JETRO will convey the problems and requests of Japanese companies to the relevant authorities of each country, working with Japanese embassies. Through this, we will help each country prepare a more attractive business environment.

At TICAD 7, a comprehensive platform for African development hosted by Japan, we will convene the Business Expo consisting of two zones. One is the Japan Fair; where technologies, services and products of Japanese companies will be showcased. The second is the Africa Lounge, where each African country will introduce its investment and business environment. In addition to providing a venue for business talks between exhibitors and visitors, the Business Expo will be a catalyst for exchange between the exhibitors of the Japan Fair and Africa Lounge.

This will coincide with another large-scale event of ours, the Japan-Africa Business Forum. More than 20 government and private sector representatives from Africa and Japan will discuss how business will pave the way for Africa’s future. “African Innovation & Startups” and “Multilateral Business Partnership” will be the themes of this forum. A special session will also be held to introduce Japanese SMEs aspiring to do business with the region.

Additionally, with the aim of providing concrete business opportunities to both Japan and Africa, we will jointly organize a pitch event featuring African startups with UNDP and JICA.

Through these activities, JETRO is fully committed to contributing to the success of TICAD 7, the “Business TICAD.”


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