Japanese companies should invest more in Africa, where investment opportunities and returns on investment are among the highest in the world, African Development Bank President Dr. Akinwumi Adesina has urged attendees at the 8th Conference Tokyo International Conference on African Development (TICAD8).
Adesina commended the Japanese government and the private sector for their strong support for Africa’s development.
He told Japanese companies to assess investment opportunities in Africa based on facts and evidence, not perceptions.
The Bank Group Chief said: “In 2020, Moody’s Analytics performed a 10-year cumulative assessment of global infrastructure debt default rates, by region. He found that Africa was the region with the second lowest cumulative default rate, after the Middle East. This is proof once again that infrastructure as an asset class in Africa is solid, secure and profitable.
Twenty African heads of state are attending the conference in the Tunisian capital of Tunis from August 27-28.
Japanese officials and business leaders as well as heads of international organizations are also attending the conference.
Speaking via video link, Japanese Prime Minister Fumio Kishida said Japan had achieved its goal of contributing $20 billion to Africa in the private sector, a target it set during TICAD7 in 2019. Kishida also announced new engagements. He said Japan “will provide co-financing of up to $5 billion, together with the African Development Bank, to improve the lives of Africans.”
Senegalese President Macky Sall said Japanese companies have “the technological and financial capacity to establish partnerships in Africa in sectors such as infrastructure, transport and housing”.
United Nations Under-Secretary-General Amina J. Mohammed hailed Japan’s foresight in establishing TICAD in 1993. She warned of the magnitude of the challenges facing Africa today, adding, “ Through platforms such as TICAD, we already have partnerships in place to respond to these challenges in solidarity.
African Union Commission Chairperson Moussa Faki Mahamat commended Japan for its efforts to build African capacity through education and training. He hailed a Japanese initiative that trained more than 1,000 young Africans in nutrition.
The head of the African Development Bank said African countries would need significant financial resources to deal with the impacts of Covid-19, accelerating climate change and Russia’s war in Ukraine.
“Now is the time to strongly support the African Adaptation Acceleration Agenda to mobilize $25 billion for climate adaptation in Africa, especially as we look forward to COP-27 in Egypt. “, said Adesina.
He said the Bank’s African Emergency Food Production Facility, launched in May 2022, is providing $1.13 billion to 24 countries to finance a planned $1.5 billion for food production in Africa. emergency. The African Development Bank accelerated approval of the facility in early 2022 to head off a potential food and fertilizer crisis resulting from the war in Ukraine.
Adesina thanked Japan for their contribution to the facility. “I am delighted that the Japan International Cooperation Agency (JICA) has provided additional co-funding of $518 million to support the facility.
At a forum for the business community, Adesina named two areas where he hoped to see increased Japanese engagement with Africa, namely bilateral trade and investment. He said Africa only accounts for 0.003% of Japan’s $2 trillion foreign direct investment worldwide.
Adesina pointed out that the Japanese companies that were bold in their investments in Africa were the ones that prospered. He gave the example of Toyota Tsusho’s investment in car factories in South Africa, which had generated $8.5 billion in revenue by March 2022. Others, he said, included Komatsu and Mitsubishi Heavy Industries.
Citing Africa’s youth, entrepreneurship and innovative spirit, Adesina said, “Africa is home to a vibrant fintech ecosystem that is leading the continent’s digital revolution with the greatest potential to lead the world. The continent is home to 576 fintech start-ups and they are led by young people.
Adesina named other vital investment sectors, including the production of lithium batteries that power electric vehicles, agribusiness and renewable energy, including from hydroelectric, wind and geothermal sources.
TICAD8 also included the signing ceremony of 91 memorandums of understanding that the government and companies of Japan have agreed with African companies or governments.
The pacts included projects in all five regions of Africa to develop human resource technical skills and green hydrogen, water desalination and geothermal solutions.
Adesina had a bilateral meeting with Japan International Cooperation Agency (JICA) President Tanaka Akihito and Japan Bank for International Cooperation Governor Nobumitsu Hayashi. He also attended a bilateral meeting with the leaders of Keidanren, a Japanese economic organization representing businesses and industry and regional associations. The meetings focused on the need for closer cooperation in investment, including co-financing of key projects, trade and opportunities for the Japanese private sector. Discussions also focused on the next 16e replenishment of the African Development Fund, the concessional lending window of the African Development Bank Group.
TICAD, which takes place every three years, is organized by the Government of Japan, the United Nations, the United Nations Development Programme, the African Union Commission and the World Bank.