At the last Tokyo International Conference on African Development (TICAD), held in Yokohoma in 2019, Tokyo attempted to transition away from a policy centered on official development assistance (ODA) and toward an approach based on private investment
“The Japanese government will do everything possible to support Japanese companies expanding into Africa,” the late Prime Minister Shinzo Abe said at the conference.
Private Japanese corporations have historically been wary about investing in Africa, weighing the strategic importance of the region against a rigorous assessment of risk. Tokyo, meanwhile, is pressing its private sector to become significantly more active on the continent as a result of lagging investment behind rival China and other world powers. The government now views Africa as a crucial market for the private sector to target, in contrast to the past when it was only considered a source of raw resources for the Japanese industry.
Below is a snapshot of the Japanese patent activity in African Intellectual Property Organisation (OAPI).
This change in emphasis is most pronounced in Japan's crucial auto industry. The historical basis of Japan's trade relations with South Africa, one of its principal partners, was the former's requirements for rare-earth minerals and metals, such as palladium and rhodium, which are essential components in the production of automobiles.
The Japanese government wants to apply this varied strategy to the energy industry. A 2030 electricity energy mix target of 36-38% from renewable sources, 20-22% from nuclear, 22% from gas, and 19% from coal is included in the government's Basic Energy Plan. Africa is anticipated to be a significant contributor in this strategy. In 2017, in order to enable Africa to benefit from Japanese technologies, skills, and expertise, as well as in clean coal technologies, the African Development Bank and Japan signed a Letter of Intent for the Japan-Africa Energy Initiative. Japan also committed to providing the Initiative with both concessional and non-concessional financing.
Deepening its ties with Africa is also necessary for Japan to diversify its supply of energy and mineral resources. Tokyo recently announced the phasing out of Russian oil imports and further sanctions might endanger future Russian LNG imports.
Moreover, the government believes that the skilled Japanese private sector can contribute significantly more to the continent's energy infrastructure than simply perceiving it as a source of raw resources.
Focus on startups
All of this signifies a shift away from conventional aid and development assistance and towards a much more fruitful partnership with the private sector. In recent years, Japan International Cooperation Agency (JICA) has played a larger role as an incubator of Japanese businesses in Africa, reflecting Japan's push for more public-private cooperation.
Through networking opportunities like the most recent TICAD, where private companies were acknowledged as the conference's formal partners for the first time, JICA has brought together Japanese and African businesspeople. This new emphasis on SMEs and startups is just one element of a more forceful strategy, which the government hopes will free Japanese businesses from the too cautious past. All of these factors make it likely that Japan will increase its involvement in Africa in a more practical manner.
The Eighth Tokyo International Conference on African Development (TICAD8) is to be held in Tunisia on the 27-28 August 2022.
