Top African and Japanese business leaders held the first business-focused meeting of the Tokyo International Conference on African Development on Thursday in Yokohama, underlining Japan’s strategic policy shift from government aid to promotion of investment as international competition on the continent grows.

“With abundant natural resources and a steadily increasing population, the African economy has high growth potential. It is developing into a region that attracts global attention,” said Satoshi Ozawa, co-chairman of the sub-Saharan affairs committee of Keidanren (Japan Business Federation), the nation’s most powerful business lobby, at the session.

TICAD was launched in 1993 by Japan, long a pioneer in international African development conferences. It is the first time a business dialog has been held as a plenary session at TICAD, which was originally focused on official development assistance.

Ozawa said Japanese firms now have a “keen interest” in the huge potential of the continent’s rapidly growing economy, particularly in such sectors as natural resources, infrastructure, manufacturing and services.

Yet Japanese businesses have recently faced “challenges” in Africa and the number operating or investing directly in countries there has stalled over the past three years, he added.

“It is highly disappointing as a businessperson” to see such a situation, Ozawa said.

Japanese foreign direct investment in Africa has been falling in recent years, from $9.99 billion at the end of 2016 to $7.82 billion in 2017, before rising to $8.78 billion in 2018, according to the Japan External Trade Organization.

Ozawa pointed out that Japanese companies have established representative offices in about 800 places across the continent. But this figure is dwarfed by China’s massive presence: More than 3,700 Chinese firms are reportedly doing business in Africa and about 1 million Chinese are now living there. The number of Japanese living there is estimated at about 8,000.

Experts say Japan’s biggest firms have been too focused on Asia as a market and manufacturing base, which is one reason why they are lagging many other countries in doing business in Africa.

“Africa is like a royal bride in the world today. There’s increased foreign investment all across Africa,” Akinwumi Adesina, president of the African Development Bank, said at the session. He said several influential countries now organize African summit conferences similar to TICAD.

“Just think about it. TICAD by Japan. China-Africa forum. India-Africa forum. U.S.-Africa forum. And now, soon to be, Russia-Africa forum,” he said.

“Africa should no longer be seen through the development lens. Africa should be seen from an investment lens. Japanese companies should not only be at the table, they should be on the ground in Africa,” he said.

“I encourage (the) Japanese private sector to form joint ventures in Africa for a win-win investment partnership,” he said.

At the same session, Ozawa said the Japanese government “has just issued a very powerful and encouraging message that it will provide full support” for firms advancing into Africa.

In conjunction with the government, Japanese businesses jointly launched the Japan Business Council for Africa in June.

The businesses also plan to launch a platform to allow African embassies in Tokyo, JETRO and Japanese firms operating in Africa to directly communicate with each other and share information, Ozawa said.

Katsuo Nagasaka, the other co-chairman of Keidanren’s Sub-Saharan Africa affairs panel, meanwhile urged African countries to further improve the business environment for foreign investors.

“I hope Africa will make further efforts to strengthen governance of government machinery, and relax and abolish foreign capital regulation and local content requirements and so forth regarding customs and immigration and permits, such as working permits,” he said.

“Please ensure fairness, transparency and predictability. Simplification and acceleration of the process is strongly called for,” he said.

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