Why Japan should invest more in Africa – Vophs Africa

with the Eighth Edition The Tokyo International Conference on African Development (TICAD) kicks off in Tunis, Japan on August 27. Change your Africa policy. A move he considers more practical is to focus on aid for foreign direct investment (FDI).

In the absence of Prime Minister Fumio Kishida who Tested positive On August 21, the foreign minister for Covid-19 is Hayashi Yoshimasa. The Japanese are leading the delegation. North Africa, where about 30 heads of state and 5,000 delegates are expected to attend.

The summit is taking place at a time when the African Continental Free Trade Area (AfCFTA) Eight countries were selected. Starting to implement the idea of ​​a common market without trade barriers, An opportunity for Japan to become the first foreign power to gain access to the continent as the only free market.

Japan hopes it will help it catch up with China, the European Union and the United States, which have been active on the continent in the recent past, deepening business ties. At the US Africa Business Summit in Morocco in July, 450 US companies, 17 government agencies and 213 business agreements were signed. Foreign direct investment flowed from America to Africa. 44.8 billion dollars In 2021

FDI as a model for engagement with Africa

While there are There were concerns China’s move last week to waive debt from 17 African countries is favorable for the Asian giant, reducing China’s financial commitments in Africa from $60 billion in 2018 to $40 billion in 2021.

Interest in investing in Africa is on the rise, with FDI in African countries doubling last year. A record $83 billionAlthough investment flows into the continent accounted for only 5.2 percent of global FDI, up from 4.1 percent in 2020. However, last February, the European Union pledged to invest 170 billion dollars in Africa, positioning itself as the most valuable business partner for the continent.

Tokyo can do it too. Take advantage Its 2019 Partnership on Sustainable Connectivity and Quality Infrastructure with the EU, along with Tripartite Business Initiatives Communicate actively as cooperative schemes to facilitate joint Japan–EU–Africa private investment.

What does Africa want from Japan?

In March, African ministers and their Japanese counterparts held a Ministerial meeting which identified some of the key development challenges facing the continent ahead of the TICAD summit, and the focus of the conversation was on helping Africa out of economic collapse. Ending food shortages caused by the COVID-19 pandemic, the war in Ukraine, and supporting the continent’s $100 billion infrastructure financing sustainability agenda, a challenging endeavour.

Japan, a member of the G7, is rooting for one. Rules-based order (rules that protect sovereignty, preserve peace and prevent the excessive use of force, and enable international trade and investment), the war in Ukraine for Tokyo and its cooperation with Africa. A major incentive for enlargement, which has a large number of UN votes. . That could see talks in Tunisia to persuade Africa to condemn the illegal use of force, but African countries are divided over condemning Russia’s attack on Ukraine.

But critics have highlighted Japan’s investment strategy in Africa. There was little gain Since the first edition of TICAD in 1993, Japan’s FDI balance in Africa, which was $12 billion at the end of 2013, has declined to about $4.8 billion at the end of 2020, compared to the UK’s $65 billion. In comparison, $60 billion came from France, $48 billion from the US, and $43 billion from China over the same period. The number of Japanese companies operating in Africa has steadily increased from 520 in 2010. 796 in 2019 But total investment has declined in recent years.

This year’s summit is a chance for Japan to prove its critics wrong, and to give its private sector a renewed impetus to invest in Africa and lend to the continent as its great geopolitical rival. China’s economic engagement is fading. Japan’s influence in the G7 Back to building a better world (B3W) can also help unlock more funds for Africa.

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