Japan advances quality investments in Africa
Japan promoted itself as committed to being a quality investor in Africa in hopes of distinguishing itself from the People’s Republic of China (PRC) at the recently concluded Tokyo International Conference on African Development (TICAD) in Yokohama in August 2019.
“I make this pledge to you: The government of Japan will put forth every possible effort so that the power of Japanese private investment, of [U.S.] $20 billion in three years, should in the years to come be surpassed anew from one day to the next,” Japanese Prime Minister Shinzo Abe said in his opening speech at TICAD, according to CNN. “We will do whatever it takes to assist the advancement of Japanese companies into Africa.”
“Advancing Africa’s Development through People, Technology and Innovation” was the theme of the three-day conference, which was in its seventh iteration, the first since 2016. Fifty-three African nations, all except Sudan, were represented at the event, according to The Japan Newsnewspaper.
TICAD ended on August 30, 2019, with the adoption of a 13-page joint declaration touting Japan’s shift from providing government aid to promoting private investment, The Japan Timesnewspaper reported. The declaration also defined Japan’s initiative for a free and open Indo-Pacific, The Japan Newsreported. (Pictured: United Nations Secretary-General Antonio Guterres, from right, Japanese Foreign Minister Taro Kono and Japanese Prime Minister Shinzo Abe attend a special conference on peace and stability in the Horn of Africa during the Tokyo International Conference on African Development in Yokohama on August 29, 2019.)
“We were able to set a firm direction for becoming a partner of Africa, which is developing dynamically,” Abe said during the closing ceremony.
Japan launched TICAD in 1993, and it was held every five years until 2013, when it changed to every three years, according to the Africanews website.
Japan seeks to distinguish itself from the PRC by promoting “quality infrastructure investment” and helping Africa properly manage its public debt, according to The Japan News.
Since 2000, Beijing has extended loans worth U.S. $143 billion to African countries, according to data compiled by the China-Africa Research Initiative at the Johns Hopkins University School of Advanced International Studies.
Many analysts, however, contend that the PRC’s investment scheme is burdening African countries, such as Angola, Ethiopia, Kenya and the Republic of the Congo, with high levels of debt for infrastructure projects that are financially unviable. Moreover, the deals, which lack transparency and adequate oversight, are built and run by Chinese companies, which put their interests above those of the African citizens and countries.
“The biggest concern is that several African countries will be left with huge debts and grandiose infrastructure that they cannot maintain and run profitably. I liken it to borrowing money to buy a Tesla when you don’t have adequate access to electricity,” Obert Hodzi of the University of Helsinki in Finland told the South China Morning Postnewspaper in July 2019.
A declaration endorsed at the G20 summit in Osaka, Japan, in June 2019 urges countries, including China, to consider the fiscal viability of recipient nations when extending infrastructure loans, The Japan Timesreported.
The declaration also calls on G20 nations to consider transparency, the environment, disaster resilience and social inclusiveness.
“A country that is deeply indebted is a country difficult for you to penetrate,” Abe said at TICAD, unveiling plans to send experts to 30 African nations to offer training on risk management and debt, according to The Japan Times.
For more than 30 years, Japan has focused on providing economic aid to African nations. In April 2019, it spent U.S. $1.5 million to fund community stabilization in northeastern Nigeria, CNN reported. In Kenya it provides grants for training centers throughout the country. Now it wants to add infrastructure and human resource development to its aid portfolio.