Business Daily (Nairobi)
Kariuki Waihenya
28 May 2008
Japan has been criticised for being too preoccupied with Africa's dark past, which has led to insignificant trade relations between it and the continent.
Tanzanian President Jakaya Kikwete said most Japanese firms considered Africa as too far and risky to invest in and that most of them chose to set up businesses only in South Africa and Egypt.
According to the World Bank, Japanese foreign direct investment (FDI) in sub-Saharan Africa between 2002 and 2004 amounted to US$415 million only, roughly 0.4 per cent of Japan's total global FDI flow of $108.5 billion. Of these $415 million, $352 million went to South Africa and Egypt, leaving the rest of Africa to share the remaining $63 million.
"This must change and it is possible for that change to happen. There can be more investments and trade between us. I know we in Africa have to go the extra mile to convince Japanese investors to come to Africa," said Mr Kikwete.
Spread investments
Mr Kikwete, who is also the African Union chairman, told the Tokyo International Conference on Africa Development in Yokohama, that most of Africa was more peaceful, democratic and economically stable and urged Japan to spread its investments throughout the continent.
In a key note speech to 53 African heads of State and representatives of international organisations, the Tanzanian leader said perceived risks about doing business in Africa were based on history and that the continent was on an economic take-off path. He urged Japan to engage its G8 partners during the July summit to honour pledges to Africa.
Japanese prime minister, Yasuo Fukuda, who opened the conference, said his country would, in the next five years, provide up to $4 billion of soft loans to Africa to speed up its momentum for improvements in infrastructure. The country would create one-stop border posts in Africa to speed up trade between different countries and ease customs and immigration procedures.
"If I were to liken the history of African development to a volume of literature, then what we are about to do is to open a new page entitled: 'The century of African Growth.' In the future, Africa will become a powerful engine driving the growth of the world," said Mr Fukuda, adding that Japan would by the end of the year send a large-scale economic mission comprising leaders in the public and private sectors to explore business opportunities.
Scramble for Africa
To make it easier for Japanese companies to develop their businesses in Africa, the country would launch a $2.5 billion facility for African investment through the Japan Bank for International Co-operation over the next five years, said Mr Fukuda, in a move that signalled Japan's entry into a group of countries that have increased investments in Africa. Economic experts have dubbed this the 'second scramble for Africa.'
China, India and western nations have lately increased their presence on the continent in what could be seen as a rush for mineral resources and oil.
Mr Fukuda said Japan would help Africa to double its current rice production output to 28 million tonnes through the development of irrigation systems, crop improvement and the training of farmers.
Japan would also focus on fighting Aids, tuberculosis and malaria.
President Kibaki is attending the summit with deputy prime minister Uhuru Kenyatta and Cabinet ministers Najib Balala (Tourism), William Ruto (Agriculture) and Moses Wetangula (Foreign).
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