Boost in Japan-Africa ties

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To many Africans, Japan is a country acclaimed for economic and technological prowess. Johnson Obaluyi in Lagos, Nigeria, says Toyota, the ubiquitous automotive manufacturer, comes to mind whenever Japan is mentioned. For Kwesi Obeng, a Ghanaian living in Nairobi, Kenya, it is technology. Beageorge Cooper, a consultant for the World Bank in Monrovia, Liberia, says she thinks of Japan as “a former world economic power”.

But it’s a different matter when Africans are asked about Japan-Africa relations. “I will have to read up on that,” says Cooper. “I think we are importing their Toyotas,” recollects Obaluyi. “They support research into tropical diseases in Africa,” says Obeng.

Such scant knowledge of the full gamut of Japan-Africa relations hardly reflects the true picture on the ground, considering that it was as recently as 2013 that Japan’s Prime Minister Shinzō Abe announced $32 billion five-year support for Africa’s development projects.

Before Abe’s announcement, Japan’s many interventions in Africa were mostly under the radar, attracting little fanfare. For example, not many know that Japan’s cumulative foreign direct investment (FDI) in the continent rose from $758 million in 2000 to $10.5 billion in 2014, according to Forbes, a US publication. Indeed, Japan was Africa’s largest Asian economic partner until 2000, when China took the lead.

A pioneering initiative

By launching in 1993 the Tokyo International Conference on African Development (TICAD) with the United Nations Development Program and the UN’s Office of the Special Advisor on Africa, Japan pioneered efforts by Asian countries to engage directly with African leaders. The Chinese followed in 2000 with the launch of the Forum on China-Africa Cooperation (FOCAC), while India joined the bandwagon in 2010 with the India-Africa Business Forum (IBF).

Often attended by a majority of African leaders, as well as investors and development experts, these gatherings have been opportunities to negotiate international trade and to attract investors and official development aid (ODA).

Japan’s decision to hold the sixth TICAD in Kenya in August, the first ever in Africa (previous conferences were all held in Japan), will likely stoke global interest in Japan-Africa relations. A prior visit to Africa by the prime minister in 2013 (with stops in Côte d’Ivoire, Ethiopia and Mozambique), the first by a Japanese leader since 2005 and the first ever to a francophone country, highlighted Africa’s investment opportunities, particularly for Japanese companies.

The prime minister’s visit also triggered a scrutiny of Japan’s strategic intent and its policy towards Africa, with Stratfor, a US-based geopolitical intelligence firm, explaining that Japan is making investment forays into Africa because it is experiencing “resource insecurities” even as its “economic growth challenges have become more urgent after the 2011 disasters and nuclear shutdown.”

Attracting suitors

Africa’s untapped resources and its resilient economy are a powerful magnet for investors. The continent’s GDP growth averaged 5% in the past decade, according to the World Bank, while its economy was resilient against the global financial crisis of 2007–2008. This prompted Prime Minister Abe to express the view that Africa is “no longer an aid recipient but rather a partner for growth”.

Increasing investor confidence has led to a quadrupling of cumulative FDI since 2000 to about $470 billion. In short, Africa seems like a beautiful maiden attracting the attention of investment suitors worldwide.

All the same, a feeling exists that Africa’s economic growth has also forced a subtle change in the international rules of engagement. Forbes notes that China and India now concentrate on the construction of roads, bridges, railways and other commercial activities, rather than offering only ODA, as was the case in the past. The rationale is that infrastructure projects, often commissioned with fanfare, can be touted as evidence of constructive relations.

Unlike China’s and India’s, the majority of Japan’s flows to Africa continue to be “focused on development assistance rather than on commercial investment by Japan’s private sector,” notes Harry G. Broadman, director of US-based John Hopkins University’s Council on Global Enterprise and Emerging Markets in Baltimore, Maryland.

Japan’s competitive advantage

In Mozambique, Abe announced a $570 million ODA to develop the Nacala corridor region that stretches from northern Mozambique to Malawi. The project will include roads rehabilitation in Malawi and the establishment of a single border post between Malawi and Mozambique, and another between Malawi and Zambia.

Due to the volatility in commodity prices, Africa’s developing economies need Japan’s support, says Stratfor. However, while projects such as the one in the Nacala corridor may be worthwhile, “It is illustrative of Japan maintaining a traditional aid-for-Africa approach,” argues Broadman.

Broadman’s critique is dismissive of Japan’s somewhat new pragmatic approach to its relations with Africa. Japan’s Foreign Ministry notes that its prime minister wants Africa to “choose Japan as its true partner” because Africa needs “Japanese assistance and the organisational culture of Japanese companies which value human resources and place importance on creative ingenuity”.

Japan’s competitive advantage is its high-quality products, concurs Broadman, and Africa can gain in areas such as transport, power generation and distribution and the manufacturing of construction equipment and machinery. He adds that Japanese firms are “notable for sharing know-how and technology transfer.”

While addressing the African Union in Addis Ababa, Ethiopia, Abe recalled that one of the African leaders told him: “Only the Japanese companies teach us the morals of what it means to work and what the joy of labour is.” The leader said further, “Japanese companies that come to Africa never fail to bring with them this type of managerial philosophy.” This philosophy, he further explained, means that “companies seek to elicit ingenuity by enhancing the competency of each individual.”

Abe’s pitch reiterates Japan’s eagerness to support Africa’s transformation through quality projects and transfer of knowledge. His speeches indicated a strategy consisting of a mix of ODA and empowerment. The African Business Education Initiative for Youth, which offers opportunities for Africans to undertake graduate studies in 58 Japanese universities, is one of Japan’s human resource development programmes for Africans. The first batch of 156 African students began their degree programmes in September 2015. “We want to utilise our huge and excellent technology to support African countries to transform,” Abe said in the margins of the UN General Assembly debate in New York in September.

Relations between Africa and Japan cannot be one-way traffic, says Broadman, meaning that opportunities exist for both. The plunge in the price of oil ($26 a barrel as of mid-February) and other commodities and the slowdown of the Chinese economy may stem FDI flows to Africa, offering Japanese companies much-needed space to operate. “Japan would certainly benefit from increased access to African oil,” suggests Broadman. And rather than buying copper from Latin America, Japan may now opt for Zambian copper.

Tsuneo Kitamura, the parliamentary vice president at the ministry of economy and trade, admits Japan is cautious in its approach to foreign investments. The Mail and Guardian, a South African publication, quotes Kitamura as saying, “Japanese companies take time to decide where to invest, but they never give up in the middle.”

Christophe Akagha Mba, Gabon’s mining minister, says that while the Chinese are taking advantage of falling commodity prices, “The Japanese are still at the same stage. They have not even started significant investments yet,” reports Reuters, a news service.

About 20 top Japanese business executives accompanied the prime minister on his visit to Africa. “Japan, with economic rival China in mind, is looking for new overseas markets where it can sell its cars, power plants and generators and buy fuels and other raw materials,” writes the Wall Street Journal.

Beyond the economy

Meanwhile, hundreds of Japanese peacekeepers are in Juba, South Sudan, providing critical engineering and logistical support to United Nations peacekeeping operations. Japan’s help in airlifting equipment and supplies to South Sudan and Entebbe in Uganda, where the UN has a logistics hub, is viewed as critical to peacekeeping operations. The Asian giant is also actively coordinating with Ethiopia and other regional players to end hostilities in South Sudan.

In addition, Japan plans to support conflict resolution and disaster mitigation efforts in Africa with $320 million. This includes $25 million to facilitate the peaceful resolution of the South Sudanese crisis. “Japan believes mediation from neighbouring states such as Ethiopia is vital and should be supported,” Abe said during his visit to Ethiopia.

Cultural and sporting ties are also being strengthened. Ahead of the 2020 Olympics, Japan is conducting a “Sports for Tomorrow” programme and enlisting the participation of African youths.

As Japan and Africa prepare for the sixth TICAD summit, Kenya’s President Uhuru Kenyatta says Africa will use the occasion to “showcase our own growth initiatives and expose to Japan the available opportunities for cooperation, trade and investment”.

If Japan can help accelerate Africa’s transformation, as Abe has promised, perhaps more Africans may soon have a better-than-peripheral knowledge of Japan-Africa relations.

Source: Africa Renewal