Japan has big plans for africa

By Felix Osike

Heads of States and delegations from 51 African countries with representatives of 35 other countries, several international and regional organisations met in Yokohama, Japan from June1-3 to hammer out a strategy on African development.

At the end of the meeting, the Yokohama declaration and plan of action were issued, renewing Japan’s continued partnership to support African development.

Japan Prime Minister Shinzo Abe was categorical, urging Japanese companies to re-draw their mental map of Africa. “Growth begins and lies in Africa. Time to invest in this continent is now. Africa will be the growth centre over the next couple of decades,” he stated.

Abe says to drive Africa onto a faster trajectory; infrastructure development, education and employment must be prioritised.

Economic analysts say Japan through the Tokyo International Conference on African Development (TICAD) is displaying a new phase in its policy towards Africa. Japan was hailed for standing firm with Africa by meeting its earlier even when in 2011; a triple disaster hit the Great East coast and killed hundreds.

What was achieved?

Leaders agreed TICAD has raised and maintained global awareness of Africa’s development challenges and opportunities since its inception in 1993. As Ethiopian Prime Minister Hailemariam Dessalegn remarked, TICAD is by far, a “trailblazer in responding to Africa’s stress call.”

The meeting agreed to support Africa’s efforts in infrastructure and human resource development, economic diversification, promoting broad-based and private sector-led growth.

Agricultural value chain will also be addressed through improving agricultural processing, post-harvest storage and access to markets for farmers to move from subsistence to commercial agriculture.

Resolving cross border issues such as terrorism, piracy and transnational organised crime to stabilise the continent is another priority.
Japan is stepping up its anti-piracy presence off the coast of Somalia by sending Coast Guards.

Leaders speak out

According to President Yoweri Museveni, the ever-expanding African market can,offer business opportunities to Japanese companies not only in such areas as manufacturing and service, but also in infrastructure.

African leaders want Japanese companies to pay more attention to value addition, job creation and technology transfer in sectors such as manufacturing than to traditional extractive sectors. African leaders also want Japanese to invest in Africa’s lucrative agricultural sector. Africa has 60% of the World’s unused arable land.

World Bank statistics show that in 2012, 10 of the fastest growing countries in the World were in sub-Saharan Africa.

The World Bank estimates that countries in all regions of Africa will most likely have the opportunity
to make historic progress in the years ahead.

UN Secretary General Ban Ki Moon is optimistic about the continent’s growth and predicts that by 2015, “seven of the World’s top 10 fastest-growing economies will be in Africa.”

But experts say Africa’s growth has mainly been driven by exports of primary commodities rather than manufacturing and agricultural expansion.

Other analysts say Japan‘s focus is influenced by China, India and South Korea’s increasing presence in the continent now becoming a global growth pole.

Japan denies this assumption and argues that it has been pushing for African’s own initiatives backed by development partners for decades.

However, Japanese investors are scared of investing in Africa because of the debilitating conflicts, grand corruption, poor infrastructure and bureaucracy in some parts of the continent.

Experts say most African countries still lack institutions that are critical for long-term progress. Besides, it is argued that the benefits of the much talked about impressive growth have not been shared equitably-a key catalyst of growing discontent.

As a result, Japan pledged 550 million dollars in support of African peace and security and a further $2b in trade finance and insurance to insulate Japanese companies against the risks.

While some resource starved countries are gunning for crude oil, natural gas and rare minerals in Africa, Japan is emphasising the need for human resource development to improve skills.

Japan, which lacks natural resources, has invested a lot in skilling its population. Writing in the Wall Street Journal recently, Shinzo Abe, stated: “Growth is not simply fueled by natural resources. It is spurred and sustained by people - through skills, education, training, innovation and social cohesion.”

How much can Japan expect from Africa?

Analysts think Japan’s courtship of Africa has to do with the reform of the UN Security Council where Japan is gunning for a permanent seat.Support by African countries would present a major boost to its bid. Brazil, Germany and India are other major contenders.

Japan is also bidding to host the 2020 Olympics in Tokyo and Africa’s support is vital.

Japan is also trying to make inroads with its technology on digital terrestrial television broadcasting already adopted in Botswana and other African countries.

What did Uganda get?

Japanese companies Marubeni Corporation and Toyota Tsusho Corporation are particularly enthusiastic about investing in Uganda’s oil industry.

Uganda will also be among the countries to benefit from the $32b announced by Japan for Africa development over the next five years.

The Japanese have made inquiries about constructing the pipeline from western Uganda to connect to the one from South Sudan to the Kenyan coastal town of Lamu.

Works minister Abraham Byandala told New Vision he would apply for part of these funds for a second bridge over Karuma where the Chinese are to construct a 600MW power dam.

Uganda will also benefit from programmes such as the Africa Business Education Initiative for the Youth through which about 1,000 youth from Africa will be allowed to study and do internship in Japanese companies.

It is estimated that by 2025, a quarter of the world population under 25 will be living in Africa, and 50% of the Africans will be living in cities by 2030.

This means Africa’s middle class currently estimated at 350 million people will continue to expand.

It can, therefore, be argued that Africa is a rising international business partner, rather than an aid recipient.

But African countries must improve the business environment in order to attract foreign investment.