Africa is full of opportunity for Japanese investment. This was the message at the Japanese –Africa Business conference which opened on August 26, 2016 on the sidelines of TICAD VI, currently underway in Nairobi, Kenya. The event, organised by Japan External Trade Organization (JETRO) and the Kenya Investment Authority, sought to woo Japanese investment in Africa.
Addressing the conference, attended by key Japanese investors, President Akinwumi Adesina of the African Development Bank noted that African economies were not only showing impressive growth rates (averaging 5 percent over the past decade), but were also getting more diversified. “This provides significant investment opportunities for the private sector,” he said.
He reiterated to the business leaders representing more than 150 Japanese companies that “Africa is the place to invest.” President Adesina said investors should feel encouraged as African nations were taking measures to improve the business environment. According to the World Bank, Sub-Saharan Africa is home to five of the 10 countries that have shown the most improvement in reforming their business environments. Further, in 2015, the region carried out more business environment reforms than any other region of the world, accounting for 30 percent of all reforms, globally.
The AfDB, he said, considers the private sector as the driver of growth. Similarly, Kenya’s Deputy President, William Ruto, described it as key to Africa’s transformation, and called on private sector involvement especially in the areas where the continent was facing challenges. “We know where the challenges are: infrastructure, energy, industry, among others. These are the areas where private sector investment is needed,” he said.
Ruto commended the Bank’s New Deal on Energy for Africa, which seeks achieve universal electricity access by 2025 by leveraging private sector investment. “Without electricity countries cannot go far,” he said, adding that, in partnership with the AfDB, the country has seen increased electricity access, from 31 percent to 61 percent. “In the next year, we will increase to 70 percent,” he stated.
Japan’s State Minister for Economy, Trade and Industry, Yoshifumi Matsumura, underscored his country’s commitment to collaborating with Africa in various sectors including energy. “We will come together, public and private entities to ensure Africa’s growth and to build a glorious future together,” he remarked. Innovations and knowledge transfer are other areas where the Asian nation will partner with Africa, according to Hiroyuki Ishige, JETRO’s Chairman and Chief Executive Officer.
Increased partnership between Africa and Japan was seen as critical in addressing the trade balance the two. President Adesina noted that Japan exports to Africa declined from US $10.4 billion in 2014 to US $8.5 billion in 2015. Africa’s exports to Japan also declined from US $16.8 billion to US $11.5 billion over the same period.
“To change this, we must strengthen greater partnerships between Japanese and African business communities. Japan needs a future growing market, and that market is Africa. Japanese business community needs to work closely with African business leaders to tap into these huge economic opportunities in Africa,” he said.