Where is Japan in Africa?

By Asoka Ranaweera

The writer is the founder and CEO of a company that advises investors on structuring investments and developing projects in West, East and Central Africa

African economies have been growing at a pace never seen before and much has been made of the role of the BRIC’s in catalyzing and in driving this new dynamic. Nearly everywhere you can think of China is almost always mentioned as one of the prime drivers of African development lessening the continent’s traditional dependence on Europe not just as a source of commercial markets but also for development finance.

This got me thinking about Asia in the 1980s and how Japan just like China in its heyday contributed significantly to the development of what was then an emergent region. As far as I can recall Japan played a prominent part in building infrastructure in many Asian countries including providing technology and managerial know how which played an important part in the development of several countries. Broadly speaking this is not in many ways dissimilar to what is going on with the BRICs in Africa today.

So what happened to Japan in Africa? And why don’t we hear more about Japan’s interaction with Africans? Surely a country such as Japan has invaluable experience that it could use in support of Africa’s economic development? As it turns out Japan was one of the few countries that continued to trade with the apartheid government of South Africa in the late 1980s which in the decade following the restoration of majority rule in that country did not endear Africans to the Japanese.

In the 1980s and early 1990s when Japan was still at the height of its economic growth its interaction with Africa in terms of trade and investment was negligible. I was particularly surprised by how little Africa and Japan actually traded even in primary commodities which many African countries produce in abundance. In fact by the end of the 1980’s Japan’s biggest involvement was in Liberia mainly because it used ‘the flags of convenience” for shipping.

Towards the 1990s Japan began to engage Africa through various aid commitments beginning with the Tokyo International Conference on African Aid, TICAD (1993). Since that time there have been four such conferences each one leading to larger commitments to disburse development aid to the continent. However, as Japan’s economy stagnated and more recently after the Tsunami that devastated the country there have been calls for retrenchment on aid to Africa.

It appears that successive Japanese governments have used TICAD to try and develop more investment and trade between Japanese companies and their African counter parts. Interestingly enough despite South Africa’s new majority’s misgivings about Japan’s apartheid era trade, today one of Japan’s largest investment and trade commitments is in South Africa.

However, Japan’s biggest investment in Africa, which is more than 50% of its total direct investment on the continent, is in Liberia. The Bridgestone-Firestone rubber plantations, which produce natural rubber is a big investment and an important one in a country that is transitioning from war.

In Liberia where I witnessed for myself Bridgestone-Firestone’s operations this investment in a core competency of the Liberian economy which is agriculture contributes positively to the country’s economic development through employment generation, community development, education and the transfer of knowledge.

Other than the examples of TICAD, South Africa and Liberia, I was hard pressed to find anything more in terms of concrete examples of Japan’s engagement in Africa, and that is not to say that Japan is not a financial contributor to many of the multilateral development institutions that work in Africa. And I do want to point out though that in more recent years there have been efforts by the Japanese government to promote Japanese investment on the continent however none of these have really panned out.

Perhaps its time for more direct Japanese engagement in Africa where Japan could more directly share its unique development experience with Africans. With the Japanese economy stagnating Africa may offer new markets for Japanese goods and services. Recently, the African Development Bank (AFDB) noted that in the last three decades 330 million Africans had attained middle-class status.

Africans meanwhile would almost certainly welcome greater Japanese engagement because it would offer more diversity in terms of investments and finance. It would also enable Africans to access new technologies, management know-how and provide the continent with news ideas and concepts which they might consider using in support of Africa’s development. And perhaps in time we might stop asking the question where is Japan in Africa?