Japan intensifies direct investment in Africa

The academic wing of Japan External Trade Organisation (JETRO) - the Institute of Developing Economies (IDE) is poised to participate at next month’s sixth Summit of Tokyo International Conference on African Development (TICAD VI). This was confirmed by Katsumi Hirano, the executive director of JETRO in his offices last week in Osaka, Japan when briefing visiting African journalists.

JETRO is a government agency tasked with promoting mutual trade and investment between Japan and the rest of the world, while IDE’s mission is to do research on the developing world and prides itself as the country’s biggest institute in social sciences. Hirano said that three of IDE’s researchers will be travelling to Nairobi, Kenya to present on economic seminars that will be organised alongside the Summit. It is also expected that JETRO Chairman Ishige, will be at hand during this high-level summit bringing Africa’s leaders and Japan’s prime minister, Shinzo Abe and the TICAD co-sponsors, World Bank, UNDP and African Union Commission together.

There are some 650 Japanese companies doing business in Africa, 70 per cent of which JETRO undertakes research for. Closer to southern Africa, JETRO has offices in Johannesburg, according to Hirano. Ahead of the historic summit, JETRO called the second African Investment Promotion Forum early March in Tokyo at which investment promotion organisations from Cote d'Ivoire, Egypt, Ethiopia, Kenya, Morocco, South Africa, Nigeria and Tanzania, where 70 percent of Japanese companies in Africa are located, participated.The IPOs and JETRO mulled over direct investment prospects for Japanese companies in anticipation of TICAD VI, which is likely to be biased towards investment especially after the Yokohama Declaration adopted at the 2013 TICAD V, called for intensified promotion of ‘direct investment into Africa’ by Japanese companies.

Information sourced from JETRO shows that Ethiopian Investment Commission was received as a member of the investment promotion forum at the March meeting in light of the attention that the country’s economy has attracted most rapidly growing in the continent.Briefing journalists, Hirano said JETRO is organising a business forum and fair at Kenya International Convention Centre pavilion where they will mount some 100 or so booths in which Japanese companies will display their products, services and technologies. He said they expect each African president attending the Summit to be accompanied by three chief executives from private companies of their countries.

“We expect that there will be business matching at the end of the summit,” he said.Hirano believes that Africa must emulate Asia, by making regulations easy and arranging flexible conditions for doing business in the continent. He cited Thailand and Japan as some of the Asian countries that have long relaxed conditions of doing business. As for China, he conceded that it was enjoying a big share of investment in Africa relative to Japan, which he said needs to “do more” to enhance economic activity in Africa.

“China has built railways and are generating electricity which efforts are helpful to Africa’s development,” he said. Hirano is confident that Japan has “strong advantage” in health care technology and should do everything in its power to exploit this niche especially that health is one of the thematic areas identified for support under TICAD VI.

“I am certain that if African hospitals could adopt Japanese health technologies, they would advance, “he said.But Hirano reckons that Japanese automobile industry, a good example being Toyota, whose presence in South Africa is double that of Malaysia, could be intensified in Africa to create the much-needed jobs and diversify African economies. As for Botswana, he mentioned Japan Oil, Gas and Metals Corporation (JOGMEG) which has deployed its satellite information for minerals resources into the country. JOGMEG set up a Geological Remote Satellite Sensing Centre in Botswana in July 2008 in collaboration with the Department of Geological Surveys (now known as the Geo-Science Institute of Botswana).

By last year, it was reported that more than 300 geologists from some 12 countries had participated in the joint satellite image and analysis project as well as field surveys. Hirano told the African journalists that TICAD VI provides a “good opportunity” to prevail Japanese products and technologies in Africa in the true spirit of partnership and mutual benefit.

There will also be a mounted Africa-Japan Public Private Conference for High Quality Infrastructure at Sarova Stanley hotel from August 25 to 27th in Nairobi at which Japanese companies will showcase some of their cutting edge technologies for high quality infrastructure in ports and harbours and roads and bridges. Urban planning and urban transportation will also be considered as will ways and means to finance high quality infrastructure.