Japan seeks to grow Africa investments to ease reliance on China
Japan is supporting its companies to grow their business in Africa and develop trade ties across a continent where it's mainly been seen as a key donor.
The second-biggest Asian economy's emergence from a three-decade period of deflation has boosted its private sector's risk appetite, Takehiko Matsuo, vice-minister for International Affairs at the Ministry of Economy, Trade and Industry said in Abidjan, the commercial hub of Ivory Coast.
"Now the mindset of Japanese business leaders has changed dramatically and they are now much more proactive about expanding their business globally,' Matsuo said. "Africa is one of the destinations where we expect Japanese companies' to grow their presence.
Japan is reasserting a commitment to do more business with Africa as it emerges from years during which its private sector was particularly risk-averse.
The government has yet to declare an end to the deflation that gripped the economy for decades. Still, data this month showed consumer prices have advanced at or above the Bank of Japan's 2% inflation target for three straight years.
Japan's net external assets reached a record high in 2024 as its investors and companies continued to load up on holdings abroad, with the U.S. and U.K. the prime destinations for foreign direct investment.
So far, only a trickle of that has reached Africa, with the continent receiving about 0.5% of Japan's foreign direct investments.
For Africa, Japan's push to recalibrate its relationship also comes at a critical time. Mobilizing private investment has become more pressing since President Donald Trump returned to the White House, slashing U.S. aid.
But it could be a win-win. By 2050, 1 in every 4 people will likely be African, and Goldman Sachs Group research projects that, by 2075, six of the biggest economies in the world could be in the Global South, including Nigeria — a point cited by the Japanese ministry.
Key sectors of interest for Japan include critical minerals, base metals and rare earths as the government seeks to reduce its reliance on China, coincidentally Africa's top trading partner.
"We are pretty much depending on Chinese companies,' Matsuo said. "I'm not saying that we cannot work with Chinese companies, but only depending on one country may be causing some vulnerability.'
Japanese trading house Mitsui & Co. emerged as the highest bidder for a stake in First Quantum Minerals Ltd.'s Zambian copper mines, Bloomberg reported in November.
Beyond mining, Japanese corporations are also looking to bring new technologies to Africa, sometimes backed by government subsidies, Matsuo said.
Fujifilm is exploring preventive medical-care services, a technology that's especially relevant in a region with low health insurance penetration, and Toyota Tsusho is looking into introducing automobile recycling systems, Matsuo said. Hitachi Construction Machinery has also been working on hybrid dump trucks to help green mining operations.
Japanese investors also have an appetite for green hydrogen and ammonia that can be used to decarbonize industries, he said.
It's not only corporations seeking to work more on the continent. Japan announced an initiative this month to connect Japanese and African startups to foster innovation.
Within members of the Organization for Economic Cooperation and Development, Japan was sub-Saharan Africa's third-biggest providers of overseas development assistance in 2022, with $1.68 billion in gross disbursements, according to government data.
Unlike the U.S. or the U.K., it's not announced plans to reduce its aid so far.
"This year, we will have the biggest meeting for collaboration between Japan and African countries,' Matsuo said, referring to the ninth edition of the Tokyo International Conference on Africa Development holding in Yokohama in August.
"In that sense, we are rather making efforts to expand our cooperation.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
11 hours ago
- Japan Times
Morocco's Atlantic gambit: linking restive Sahel to ocean
A planned trade corridor linking the landlocked Sahel to the Atlantic is at the heart of an ambitious Moroccan project to tackle regional instability and consolidate its grip on disputed Western Sahara. The "Atlantic Initiative" promises ocean access to Mali, Burkina Faso and Niger through a new $1.3-billion port in the former Spanish colony claimed by the pro-independence Polisario Front but largely controlled by Morocco. But the project remains fraught with challenges at a time when military coups in the Sahel states have brought new leaderships to power intent on overturning longstanding political alignments following years of jihadist violence. The Moroccan initiative aims to "substantially transform the economy of these countries" and "the region", said King Mohammed VI when announcing it in late 2023. The "Dakhla Atlantic" port, scheduled for completion at El Argoub by 2028, also serves Rabat's goal of cementing its grip on Western Sahara after U.S. President Donald Trump recognized its sovereignty over the territory in 2020. Work takes place during the construction of the Dakhla Atlantic Port on May 26. | AFP-JIJI Morocco's regional rival Algeria backs the Polisario but has seen its relations with Mali, Burkina Faso and Niger fray in recent months after the downing of a Malian drone. Military coups over the past five years have seen the three Sahel states pivot towards Russia in a bid to restore their sovereignty and control over natural resources after decades within the sphere of influence of their former colonial ruler France. French troops were forced to abandon their bases in the three countries, ending their role in the fight against jihadists who have found sanctuary in the vast semi-arid region on the southern edge of the Sahara. 'Godsend' After both the African Union and West African bloc ECOWAS imposed economic sanctions on the new juntas, Morocco emerged as an early ally, with Niger calling the megaproject "a godsend". "Morocco was one of the first countries where we found understanding at a time when ECOWAS and other countries were on the verge of waging war against us," Niger's Foreign Minister Bakary Yaou Sangare said in April during a visit to Rabat alongside his Malian and Burkinabe counterparts. Concrete blocks are made ready during the construction of the Dakhla Atlantic Port. | AFP-JIJI The Sahel countries established a bloc of their own — the Alliance of Sahel States (AES) — in September 2023 but have remained dependent on the ports of ECOWAS countries like Benin, Ghana, Ivory Coast and Togo. Rising tensions with the West African bloc could restrict their access to those ports, boosting the appeal of the alternative trade outlet being offered by Rabat. 'Many steps to take' Morocco has been seeking to position itself as a middleman between Europe and the Sahel states, said Beatriz Mesa, a professor at the International University of Rabat. With jihadist networks like Al-Qaeda and the Islamic State group striking ever deeper into sub-Saharan Africa, the security threat has intensified since the departure of French-led troops. Morocco was now "profiting from these failures by placing itself as a reliable Global South partner", Mesa said. Its initiative has won the backing of key actors including the United States, France and the Gulf Arab states, who could provide financial support, according to specialist journal Afrique(s) en Mouvement. But for now the proposed trade corridor is little more than an aspiration, with thousands of kilometers (many hundreds of miles) of desert road-building needed to turn it into a reality. "There are still many steps to take," since a road and rail network "doesn't exist", said Seidik Abba, head of the Sahel-focused think tank CIRES. Rida Lyammouri of the Policy Center for the New South said the road route from Morocco through Western Sahara to Mauritania is "almost complete," even though it has been targeted by Polisario fighters. Abdelmalek Alaoui, head of the Moroccan Institute for Strategic Intelligence, said it could cost as much as $1 billion to build a land corridor through Mauritania, Mali and Niger all the way to Chad, 3,100 kilometers (1,900 miles) to the east. And even if the construction work is completed, insecurity is likely to pose a persistent threat to the corridor's viability, he said.
The Mainichi
3 days ago
- The Mainichi
U.S. tariff rate hits historic level of 25.9%: Japan trade report
TOKYO (Kyodo) -- The effective U.S. tariff rate on all imports rose to as high as 25.9 percent under President Donald Trump, surpassing levels not seen since the protectionist policies of the Great Depression, the Japanese government's annual trade report showed Friday. The U.S. tariff measures as of early April, including an increase in the levies on China to 145 percent, reached a "historic scale," the Japanese trade ministry said, adding that frequent changes in Trump's trade policy are creating "heightened uncertainty." According to the ministry, the effective tariff rate -- the actual rate applied to imports -- was 19.8 percent in 1933, after the United States enacted the Smoot-Hawley Tariff Act in 1930 to protect American businesses and farmers from foreign competition by significantly raising tariffs on imported goods. The report by the Japanese Ministry of Economy, Trade and Industry cited data from the International Monetary Fund as a reference. The April rate also reflected new tariffs on the auto sector. The U.S. effective tariff rate has since declined after Washington and Beijing agreed in May to roll back a significant portion of each other's steep tariffs, marking a de-escalation of their tit-for-tat trade war. Japan's simple average tariff rate stood at 3.7 percent in 2023, according to data from the World Trade Organization.
Japan Times
3 days ago
- Japan Times
Kirsty Coventry says IOC will take lead regarding gender eligibility in sports
The International Olympic Committee will spearhead discussions on gender eligibility criteria in sports, its new president Kirsty Coventry said on Thursday, four years after the ruling body urged federations to handle the issue independently. Coventry, who officially took over the presidency from Thomas Bach this week following Monday's ceremony in Lausanne as the first woman and first African to hold the position, said she now wanted the IOC to "protect the female category." She announced the formation of a working group to lead these discussions and another to review the election process for future Olympic host cities. The IOC has long refused to apply any universal rule on transgender participation for the Olympics, instructing international federations in 2021 to come up with their own guidelines. "We're going to actually set up a working group made up of experts and international federations," Coventry told a news conference following the first executive board meeting of her presidency. She also held a two-day workshop for IOC members this week to discuss key issues with them. "It was agreed by the members that the IOC should take a leading role in this and that we should be the ones to bring together the experts, bring together the international federations and ensure that we find consensus," Coventry said. "We understand that there will be differences depending on the sports. We should make the effort to place emphasis on the protection of the female category and that we should ensure that this is done in consensus with all the stakeholders." Transgender athletes are currently eligible to compete at the Olympics. Some international federations have rules in place, but others have not yet reached that stage. U.S. President Donald Trump has banned transgender athletes from competing in sports in schools in the United States, which civil rights groups say infringes on the rights of transgender people. Trump has said he would not allow transgender athletes to compete at the 2028 Los Angeles Summer Olympics. Coventry said IOC members also wanted to be more involved in the selection process for future Olympic host cities. Under her predecessor, the IOC executive board presented one preferred candidate to IOC members, who then rubber-stamped that choice. "There was overwhelming support from the IOC members for a pause to be done, and a review of the future host election process," Coventry said. "Members want to be engaged more in the process, and secondly there was a very big discussion in and around when should the next host be awarded." The next Summer Olympics will be held in Los Angeles in 2028, followed by Brisbane in 2032. The IOC has reported "double-digit" interest for the 2036 Games from countries including India, Saudi Arabia, Qatar, Germany, Indonesia and Turkey. No date for a decision on those Games has been set. The 2026 Winter Olympics will take place in Italy's Milano Cortina, with the French Alps hosting the 2030 edition and Salt Lake City in the U.S. organizing the 2034 Winter Games.
