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Japan keen to up the trade, investment ante at upcoming Africa gathering

13th December 2012

By: Terence Creamer
Creamer Media Editor

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The fifth Tokyo International Conference on African Development (Ticad V), which will take place in Yokohama, Japan, from June 1 to 3, 2013, will seek to consolidate the shift in the terms of the relationship between Japan and Africa from one historically premised on development aid to one designed to facilitate higher levels of trade and investment.

The first Ticad was held 20 years ago in 1993 and the event, which is hosted every five years, has evolved into a major global forum for a high-level policy dialogue between African and Japanese leaders.

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Embassy of Japan in South Africa Minister Ken Okaniwa tells Engineering News Online that the 2013 edition will bring together leaders from the giant Asian economy and most African countries. In fact, the expectation is for an improvement on the figure of 41 African Heads of State who attended the fourth edition in 2008.

The emphasis will continue to be on accelerating Africa’s growth and reducing poverty and vulnerability. But Okaniwa, who took up his position in Pretoria following a diplomatic assignment in London, says Ticad V will give far more prominence to promoting Africa’s development through private enterprise and business relations.

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At Ticad IV, Japan indicated that it planned to facilitate a doubling in private foreign direct investment (FDI) to Africa to $3.4-billion a year by 2012. The target has already been exceeded, with Japanese assets in Africa having risen to over $6-billion by 2010 and the yearly FDI rate between 2008 and 2010 having comfortably exceeded the baseline needed to secure a doubling by 2012.

In addition, new trade, investment and development elements, such as the promotion of science and technology, will be introduced at Ticad V, partly as a response to emerging challenges confronting Africa, including the threat of climate change.

But development aid also remains on the agenda, with Japan having pledged at Ticad IV to double yearly aid to Africa to $1.8-billion by 2012.

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Okaniwa believes that Japan could also offer lessons and practical solutions on ways to incorporate large infrastructure projects into Africa’s development strategy. The continent is currently focusing on building infrastructure and domestic skills in a bid to stimulate economic growth and social development.

“Japan’s own economic growth and development was made possible by building skills, through education, and by putting a lot of money into infrastructure and thereby supporting the private sector,” he reflects, adding that Japan’s success in these areas is also a relatively recent phenomenon.

Through Ticad V, as well as any follow-up initiatives arising from the gathering, Japan plans to give particular emphasis to the importance of promoting regional transport networks, including the proposed North-South Corridor project.  It will support these initiatives through helping to fund feasibility studies and supporting efforts to incorporate one-stop border posts in Southern Africa.

In South Africa, too, there is a strong focus on transport, as well as power, water and information communication technology. Okaniwa tells Engineering News Online that the Japanese International Cooperation Agency is currently conducting a survey of South Africa’s railways industry in an effort to offer input on ways to modernise the sector.

He also remains convinced that South Africa will continue to play the role of a gateway for Japanese companies keen on entering the African market, notwithstanding prevailing concerns over the country’s social stability and low economic growth.

Japan is currently South Africa’s third-largest trading partner, with two-way trade of nearly R90-billion recorded in 2011. The balance is also in South Africa’s favour, with exports to Japan in 2011 having been R55.6-billion as against imports of R34.3-billion.

There are currently 108 Japanese companies with a presence in South Africa, collectively employing about 150 00 people, and the “trend is on the increase”.

“Most of these companies cover not only South Africa, but the rest of sub-Saharan Africa too. I think South Africa will continue to be an important place, particularly because of the sophistication of South African banks, which have a lot of know-how about projects in other Africa countries,” Okaniwa concludes.

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