Japanese businesses should invest more in Africa, where investment opportunities and returns on investment are among the highest in the world, African Development Bank (www.AfDB.org) President Dr. Akinwumi Adesina urged participants at the 8th Tokyo International Conference on African Development (TICAD8).
Adesina
commended the Japanese government and private sector for their strong support
to Africa’s development.
He
told Japanese businesses to assess Africa’s investment opportunities based on
facts and evidence, and not on perceptions.
The
Bank group head said: “In 2020, Moody’s Analytics performed a 10-year
cumulative assessment of global infrastructure debt default rates, by region.
It found that Africa was the region with the second lowest cumulative default
rate, after the Middle East. That is proof once again that infrastructure as an
asset class in Africa is solid, secure, and profitable.”
Twenty
African heads of state are attending the conference in the Tunisian capital of
Tunis from the 27th to 28th of August.
Japanese
officials and business leaders, and heads of international organizations are
also taking part in the conference.
Speaking
by video link, Japanese Prime Minister Fumio Kishida said Japan had achieved
its goal of contributing $20 billion to Africa within the private sector, a
goal it had set at TICAD7 in 2019. Kishida also announced new commitments. He
said Japan “will provide co-financing of up to $5 billion, together with the
African Development Bank, in order to improve the lives of African people.”
Senegal’s
President Macky Sall said Japanese corporations have the “technological and
financial capacity needed to set up partnerships in Africa in sectors such as
infrastructure, transportation and housing.”
Deputy
Secretary General of the United Nations Amina J. Mohammed commended the
foresight of Japan’s leadership in establishing TICAD in 1993. She warned about
the scale of the challenges currently facing Africa, adding “Thanks to
platforms such as TICAD, we already have the partnerships in place to respond
to these challenges in solidarity.”
The
African Union Commission’s Chairperson Moussa Faki Mahamat lauded Japan for its
efforts to build African capacity through education and training. He praised a
Japanese initiative that has trained over 1000 young Africans in nutrition.
He said the Bank’s African Emergency
Food Production Facility, launched in May 2022, was providing $1.13 billion for
24 countries in financing an expected $1.5 billion for emergency food
production. The African Development Bank fast-tracked approval of the facility
earlier in 2022 to avert a potential food and fertilizer crisis arising from
the war in Ukraine.
Adesina
thanked Japan for its contribution to the facility. “I am delighted that the
Japan International Cooperation Agency (JICA) has provided additional
co-financing of $518 million to support the facility.”
During
a forum for the business community, Adesina named two spheres where he hoped to
see increased Japanese engagement with Africa, namely bilateral trade and
investment. He said that Africa accounted for just 0.003% of Japan’s $2
trillion in global foreign direct investment.
Adesina
stressed that Japanese firms which were bold in their investments in Africa
were those that were prospering. He gave the example of Toyota Tsusho’s
investment in automobile factories in South Africa, which had generated $8.5
billion in revenues in March of 2022. Others, he said, included Komatsu and
Mitsubishi Heavy Industries.
Citing
Africa’s youth, entrepreneurism and innovativeness, Adesina said: “Africa is
home to a vibrant fintech ecosystem that is leading the continent’s digital
revolution with the highest potential to lead the world. The continent is home
to 576 fintech start-ups and they are run by young people.”
Adesina
named other vital investment sectors including the production of lithium
batteries that power electric vehicles, agribusiness and renewable energy,
including from hydropower, wind and geothermal sources.
TICAD8
also included the signing ceremony for 91 memoranda of understanding that
Japan’s government and businesses have agreed on with African corporations or
governments.
The
pacts included projects across all five regions of Africa to develop human
resource technical skills and green hydrogen, water desalination and geothermal
solutions.
Adesina
had a bilateral meeting with the President of the Japanese International
Cooperation Agency (JICA) Tanaka Akihito and the Governor of Japan Bank for
International Cooperation Nobumitsu Hayashi. He also attended a bilateral
meeting with the leaders of the Keidanren, a Japanese economic organization
representing businesses and industrial and regional associations. The meetings
centered on the need for closer cooperation on investment, including
co-financing for key projects, trade and opportunities for Japan’s private
sector. Discussions also covered the upcoming 16th replenishment
of the African Development Fund, the African Development Bank Group’s
concessional lending window.
TICAD,
which takes place every three years, is organized by the government of Japan,
the United Nations, the United Nations Development Programme, the African Union
Commission, and the World Bank.
Source:
APO Group