Behind the scene of Africa-Japan development conference 2022 -Part 1-

Even at this difficult timing in our global due to virus and war etc, the Eighth Tokyo International Conference on African Development (TICAD 8) was successfully held August 27-28 in the Tunisian capital, Tunis, due to efforts of many people from Tunisia, Africa, Japan, and so many other nations in international.

This is the eighth edition since the inaugural TICAD conference in Tokyo on October 5-6, 1993, which is a longest and oldest bilateral and international conference between Africa and global. The two-day event was expected to identify ways to build resilience and achieve inclusion and abundance in Africa in the context of the COVID-19 pandemic, global warming and the state of play in Ukraine etc.

About Sixty-six official delegations representing 48 countries (FMs, ministers of economy and trade and diplomatic corps) were attending the conference along with regional and international organizations, civil society and 120 journalists. And, Nearly 50 large Japanese firms took part in TICAD 8 business forum due on Saturday afternoon. They would be represented by 100 business managers and executive directors. A total of 300 businessmen (100 from Africa and as many from Japan and International) safely attended the event.

Major Outcomes

Japan's Prime Minister, Fumio Kishida announced core points and the summary below, and we could see major outcomes from that:

“Africa, supported by young people, is a continent where dynamic growth can be expected. Japan is a “Partner Growing Together” with Africa” ?

“Through a “virtuous cycle of growth and distribution,” we will realize the resilient Africa that Africa itself aspires to be”. ?

“Emphasis on "investment in people" and "quality growth" under a Japanese-style approach that focuses on "People." By $30 billion scale investment in public and private spending over the next three years, we will invest a large amount of money and carry out the following initiatives.”

(1) Green investment: Launched the “African Green Growth Initiative,” investing $4 billion in public and private investment.

(2) Investment promotion: Focus on startups that are being worked on by young people from Japan and Africa. Their Japan government welcomes the plan for a "startup investment fund" of over 10 billion yen by Japanese business communities.

(3) Development finance: Co-financing with the African Development Bank of up to approximately $5 billion to improve people's lives in Africa. Created a new special quota of up to $1 billion to help African countries in their debt consolidation efforts.

(4) Health and public health: Based on the principle of human security, new contributions of up to $1.08 billion to the Global Fund.

(5) Human resource development: fields such as industry, health and medical care, education, agriculture, justice and administration that will support the future of African 300,000 human resources.

(6) Regional stabilization: In order to respond to the increasingly complex regional situation, a special envoy for the “Horn of Africa” was appointed and strengthen the system to respond to.

(7) Food security: In order to build a resilient society that protects people's livelihoods in Africa, $100 million in co-financing and training of 200,000 agricultural workers in Africa.

Future of Japan -African ties and where things go from here

A feature of the TICAD is that it is an international conference body led by Japan but with multilateral frameworks such as the African Union Commission (AU), the World Bank, and the United Nations Development Program (UNDP). This year's TICAD was even more important than before, and it was actually difficult to manage.

Many countries in Africa are in economic crisis due to corona and war in Ukraine etc. I also think that the Japanese side are also needed to upgrade its business promotion measures with entire Africa through this time’s TICAD.

It is true that Japan's stock of direct investment in Africa and its total trade value are globally in the top class, but they have been declining since the middle of 2010s. While some companies, mainly large ones, have a strong presence in Africa, on the whole, Japanese companies have been unable to expand investment and trade in/with Africa.

On the other hand, changes are also observed on the ground. An important trend in recent years is the increasing number of small and medium-sized Japanese companies expanding into Africa and Japanese companies investing in such companies.

In recent years, the growth of small and medium-sized African start-up companies utilizing IT and digital technology has been remarkable in Africa. So-called fintech is one of such areas, but if you look more closely and deeply, you will find that there are various industries, sectors, and business models around there. Japanese companies including small and medium-sized companies are beginning to participate in these kind of businesses in various ways, such as by investing in them. And the trend has just begun, so there are actually so many untapped opportunities there.

In this TICAD 8 Tunis Declaration, emphasizing the roles of start-ups in Africa to resolve social challenges was included in addition to their private sector’s further investment, technology transfer, industrial human resources development.

emphasizing the roles of start-ups in Africa to resolve social challenges was included in addition to their private sector’s further investment, technology transfer, industrial human resources development.

This might be not much mentioned in official spaces at this TICAD, but in my view, another interesting feature and opportunity in current global market including Japan for emerging markets like Africa might be financing with foreign currency debt related structure.

With benchmark sovereign yields in Japan falling back around zero on increased stimulus for long years from the central bank, the many of Japan country’s banks are hungry for higher-yielding assets and business opportunities. We could see such cases in India in recent years that India’s biggest companies are turning to them for relatively less cost capital as the coronavirus pandemic roils the economy. Access to overseas loans for refinancing etc is critical for Indian firms, whose offshore debt bill for 2020 year was predicted to an unprecedented total of about $31 billion.

US dollar funding has become more costly current years amid turmoil in global financial markets. The price of raising Japanese yen has risen more slowly, still boosting the appeal of fundraising in the currency.

So, why not with Africa and in Africa by that solution? We could see a lot of the relevant financing needs in Africa as well.

The price of raising Japanese yen has risen more slowly, still boosting the appeal of fundraising in the currency.

The potential of Africa is a driving force of global growth. So, there is a lot of meaning and valuable outcomes not only in local and regional but international level by this time’s TICAD to show commitment again for “Investment in People”, which is urgent and important in Africa, as you many know.

It also recognized importance of multilateralism and commitment to working together based on international law including the UN Charter, and respect for sovereignty and territorial integrity of all countries, and emphasized that all countries must seek peaceful resolution of disputes in accordance with international law.

Next TICAD 9 will be held in Japan in 2025. A TICAD ministerial meeting will be held in 2024. There are a lot of things for each of us to practically proceed during this years.

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