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POLITICS

Japan lags behind China and the West in African development

  • August 4, 2016
  • , Nikkei , p. 4
  • Translation

Behind the Japanese government’s promotion of developmental support for African nations, as seen in the case of a recent geothermal power initiative, there is a desire to enter the African market, which is now regarded as the last economic frontier. Currently, Japan’s investment is substantially smaller than that of the U.S., China, and European nations with historical ties to Africa. The Japanese government, in close cooperation with the private sector, plans to increase Japan’s presence in the African economic sphere where the potential for growth is sizable.

 

The rate of population growth has slowed in both developed countries and Asian nations with rising economies, while the African population is projected to keep growing into the latter half of the century. This, in combination with the prospective income increase, will create the potential for significant economic growth. Africa is blessed with abundant minerals and energy resources as well. The economic benefit gained through increasing ties with Africa is substantial.

 

So far, less than 300 Japanese companies are conducting business in sub-Saharan countries, hindered by the long distance from home and under constant threat of terrorist attacks and infectious diseases.

 

Japan’s direct investment in Africa is about one trillion yen, which is only one-fifth that of France and the U.S., and half of China’s. China is strengthening support in the field of human resource development and technological assistance. There has been a growing concern in the Japanese government that if Japan lets China lead in developmental support, it will harm Japan in the competition with China over large project contracts.

 

Official assistance with power plants and other infrastructure projects will increase contracts with Japanese corporations. Better infrastructure, in turn, means reduced cost of electricity as well as improved roads and port facilities that ensure easier access to African markets. Getting involved in infrastructure projects from the start is therefore especially beneficial for Japanese corporations.

 

More than one hundred major Japanese corporations will send executive-rank officials to the upcoming Tokyo International Conference on African Development (TCAD) in Nairobi, aiming to increase Japan’s market share through cooperative private-public efforts.

 

 

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