Japanese now upbeat about deals with SA
Trade officials from Japan, who previously had felt sidelined under the Jacob Zuma administration, are in a more buoyant mood, believing that relations with SA have entered a new chapter.
Giving reason for enthusiasm is a keynote address by President Cyril Ramaphosa that launched the Japan-Africa Public-Private Economic Forum in Sandton earlier in May.
Japan felt sidelined during the Zuma presidency when SA’s political, trading and investment focus turned to the Brics bloc of nations, especially China.
In his presentation, Ramaphosa reiterated that SA had embarked on a $100bn investment drive over the next five years, and would be holding an international investment conference later in 2018.
No doubt Japan, among the top 10 investors in SA, is also in Ramaphosa’s sights.
Japan had earlier pledged to invest $30bn in Africa from 2016 to 2019. This contrasts with a Chinese pledge in December 2015 to invest $60bn in Africa over three years
"We will not be able to expand trade and investment relations between Japan and African countries unless our respective governments, state-owned entities and other public institutions are aligned with the work of the private sector."
This meant attracting capital, technology, expertise and best practice from advanced economies in respect of the continent’s abundant natural resources, Ramaphosa said.
In 2017 Africa’s exports to Asia as a whole were worth about $64bn, of which Japanese imports of African goods accounted for about $8.3bn — a fraction of the trade between the continent’s top trading partners — China, the US and the EU.
Japan had earlier pledged to invest $30bn in Africa from 2016 to 2019. This contrasts with a Chinese pledge in December 2015 to invest $60bn in Africa over three years.
But it is not at all clear what has been implemented.
The difference, though, is that Japanese investment is through private companies and not state-owned enterprises, as is mostly the case with China.
Yasushi Akahoshi, president of the Japan External Trade Organisation (Jetro), said the main focus of the recent Japan-Africa forum was on diversifying trade, especially beyond Japan’s energy requirements.
Japan did not want to compete with China and other countries on price, but rather was focused on quality, he said. Government-mandated trade financing was key and was aimed at supporting private Japanese companies.
This means leveraging Japanese global manufacturing investments in places like India and Nigeria, where in 2016 Yamaha opened a motorbike assembly plant that also built boat engines and generators.
Apart from major industrial companies, Japanese businesses are proficient in smart agriculture, small-scale off-grid electrification and the provision of broadband for rural development.
But Katsumi Hirano, executive vice-president of Jetro, said Japan’s exports to Africa had fallen for more than 10 years. "The competitiveness of Japanese products is decreasing," he said, blaming this mainly on competition with China and South Korea.
Hirano also said the country’s presence in Europe was small when compared with the US and Asia. "So we have the wish to increase our presence in Europe and Africa."
The recent forum saw ministers from SA, Kenya, Tanzania, Angola and Zambia engage with Japan’s minister of economy, trade and industry, Hiroshige Seko, and other Japanese agencies.
Toyota and Komatsu are two of the largest selling Japanese brands on the continent.
On an earlier stopover in SA in October 2017 to open Jetro’s newest Africa office in Maputo, Hirano said SA’s image of a "rainbow nation" had faded as the corruption and conflict that pervaded governance in many other parts of Africa had entrenched itself in SA.