Spurring balanced African growth

The fifth Tokyo International Conference on African Development finished its three-day meeting in Yokohama on Monday. The TICAD, held every five years, was started in 1993 at the initiative of Japan as a forum for African leaders to discuss Africa’s economic development and the shape of assistance to the continent. Some 50 African leaders attended this year’s conference, as did Prime Minister Shinzo Abe.

Africa is rich in energy resources and rare metals needed for high-tech products. Many African countries have enjoyed strong economic growth in recent years and their middle classes are growing. But poverty and famine remain major problems on the continent.

In the past several years, sub-Saharan Africa has been growing 5 to 6 percent annually. Per capita gross domestic product for combined Africa increased from $492 in 2000 to $1,189 in 2010 and the continent’s population is expected to reach 2 billion in 2050.

Japan must play a constructive role and ensure that Africa gets the right balance of private investment and government development assistance. The main purpose of the latter should be to reduce poverty.

At the outset of the conference, Mr. Abe said that Japan will provide ¥3.2 trillion funds to Africa over the next five years, including about ¥1.4 trillion in official development assistance and ¥1.6 trillion from other public and private funds, and that Japan will underwrite up to ¥200 billion in trade insurance. His statement represents Japan’s attempt to counter China, which has greatly increased its economic and trade presence in Africa.

China started expanding trade with Africa around 2005. Its trade with Africa amounted to about $200 billion in 2012, a 20-fold increase from 2000. In contrast, Japan’s trade with Africa stood at only about $28 billion in 2011.

Tokyo should make serious efforts to increase trade and investment in Africa. But it cannot follow the same path as Beijing, which has been able to make substantial investments in the continent using funds from both its public and private sectors.

Japan should work out assistance programs that incorporate its advanced technologies and human resources development. Such an approach will help strengthen relations between Japan and African countries. It is also important for Japan to help improve the continent’s poor infrastructure. Mr. Abe has pledged ¥650 billion for developing African infrastructure over the next five years.

High economic growth alone will not solve Africa’s problems. Japan should focus on helping African nations achieve balanced economic growth to ensure that the gap between rich and poor will not widen too much and sow the seeds of unrest and terrorism.

Companies doing business in many parts of Africa are forced to deal with political instability, high crime rates and corruption in both the private and public sectors. While such problems have many complex causes, Japan should provide assistance aimed at governance when possible. It also should seek free trade agreements or economic partnership agreements with individual African countries.