Sierra Leone News: Japanese Companies to recover lost opportunities in Africa
By Saidu Bah
Africa is far away from Japan, but some Japanese companies know that there are business opportunities and they want to recover the lost opportunities in trade and investment through partnership for economic growth with African businesses.
Japan’s main focus in Africa has traditionally been development and assistance. In recent years, however, African countries have increasingly been viewed as business partners rather than aid recipients amid the region’s increasing potential for economic growth.
The Japan External Trade Organization (JETRO) seized an opportunity to expand Japanese businesses in Africa through the Tokyo International Conference on African Development (TICAD) conference held in Yokohama.
A delegation from Japan External Trade Organization (JETRO) visited Sierra Leone in September 2018 and held a successful conference at Radisson blu hotel in Freetown on trade opportunities organized by the Sierra Leone Investment and Export Promotion Agency (SLIEPA).
“JETRO’s role is to make a path for Japanese companies to invest in Africa at the initiative of the private sector,” JETRO Chairman Nobuhiko Sasaki said at a press conference.
Japanese and African companies through the three-day Japan-led conference held various side events during the seventh TICAD, which started Wednesday 28th August 2019 in Yokohama, boosting private-sector investment was a key agenda item, seeking to promote partnerships.
“Africa is far away from Japan, but we want to let Japanese companies know that there are business opportunities there,” JETRO Chairman Nobuhiko Sasaki said.
According to the United Nations, the African population is projected to reach about 2.5 billion in 2050, accounting for about a quarter of the world. Along with an increase in population, private consumption, seen as a driver for growth, has been on the rise.
In addition, hopes have grown for establishing regional economic integration to create a market of 1.2 billion people with a combined gross domestic product of $2.5 trillion as the African Continental Free Trade Area (AfCFTA) agreement took effect in May this year.
The International Monetary Fund estimates that the GDP in sub-Saharan Africa will grow by 3.5 percent this year with about half of the countries in the region expected to see growth of 5 percent or more.
However, Japan’s presence in Africa remains notably low with exports to the continent at about $10.8 billion in 2018, down 27.3 percent over a decade, while the world’s exports to the region rose 17.2 percent in the same period, according to data provided by JETRO, which views this as “lost opportunities” for Japan.
Japan Fair was a highpoint of the TICAD 7 conference with display products, technologies and services presented by Japanese companies to heads of state, top officials and business leaders from African countries.
“Over 150 Japanese companies from 27 prefectures participated which is the largest scale ever recorded in an Africa-related event held by JETRO in Japan,” Director General JETRO Kenichi Ishihara said in an interview with our reporter.
82 small and medium-sized enterprises exhibited and demonstrated their eagerness to expand business with Africa. Exhibitor stands was allocated according to these categories so that visitors may easily find the technologies, products and services of Japanese companies that were presented as solutions to some of the world problems.
The venue for the exhibition according to the Director General JETRO Kenichi Ishihara was zoned into categories such as “high-quality infrastructure,” “construction of food value chains,” “climate change countermeasures” and “health and hygiene-related improvement,” which were identified as priority issues in Africa by the “Nairobi Declaration” in TICAD VI and “Agenda 2063” addressed by the African Union (AU).
Director General JETRO Kenichi Ishihara explained that under the theme of “Tsumugu: Intertwining Japan and Africa’s Future,” JETRO focused on four areas: encouraging small and midsize companies to make inroads into the African market, boosting cooperation with entities in third-party countries, connecting African start-ups with Japanese companies and improving business environments.
During TICAD, JETRO held several events such as a business expo, where more than 150 Japanese companies showcase their products, technologies and services, as well as a business forum where more than 20 Japanese and African business leaders will gave talks on business opportunities trade and investments between Japan and Africa, Director General JETRO Kenichi Ishihara said.
Despite the potential, it remains to be seen whether Japan can capitalize in the region, which is prone to conflicts and trade facilitation hurdles such as infrastructure and logistics with fierce competition with China’s aggressive economic activity in Africa under its massive Belt and Road Initiative.
At the end of 2017, China’s direct investment stocks in Africa were at $43 billion, far above Japan’s $7.8 billion, according to JETRO data.
To distinguish Japanese businesses from their Chinese rivals, both the Japanese government and JETRO have stressed “quality” instead of “quantity.”
JETRO has particularly pushed for entities in fields regarded as Japan’s strengths such as health care, agriculture and environment, as a way to solve social problems in Africa through business.
“Although the scale of businesses involving start-ups is small, JETRO hopes to widen and diversify business opportunities for Japanese companies in Africa,” Katsumi Hirano, JETRO executive vice president specializing in Africa, said at the press conference. “We want to lay the foundations for a possible huge market.”
I’m excited Japan has expressed willingness to do partnerships with African businesses for economic growth in a win –win situation an Ivorian Cocoa Entrepreneur Felix Koilibaly said.
Japanese companies have advance technologies and business planss for collaboration with Africa to address the demands of the market he said.
Sierra Tropical (SL) Limited (STL), a wholly owned subsidiary of Dole Asia Holdings PTE Ltd, the parent company based in Japan — ITOCHU, has at the moment, with guidance from the Government of Sierra Leone, acquired 574 hectares of land from landowners/landowning families from the Lugbu chiefdom in the Bo district where a pineapple farm with a packaging factory will be built and operated and a skills development center will also be opened to train locals.
The Japan External Trade Organization is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO’s core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential.
Besides their strong focus on trade, investment and technical cooperation, Africa’s partnerships, including TICAD, have paid growing attention to the issues of peace and security, trade and human resource development based on African ownership and international partnership.
Japanese companies have contributed to creating jobs, increasing income, and transferring technology through their businesses in Africa.
They have also contributed to human resources development from a broader perspective including placing importance on high business ethics, long-term relationship of trust, handling customer needs carefully, and commitment to the quality of products.