The Second Japan-Africa Business Forum

Session 7

Business Promotion through Partnership: Unlocking Business
Opportunities with African and Third Country Collaborations
Moderator

Tadashi Yokoyama
Head of Asia External Representative Office – African Development BankMr. Yokoyama started the session on Partnership.
The Japanesecompanies can enjoy a win-win relationship in Africa to create
employment, contribute to industrialization and develop human resources,
transfer technology, and be engaged in growth that would benefit Africa.
The Japanese companies from the private sectors find it difficult to expand
their business in Africa due to lack of information, risk perception is highand it is difficult to find a good partner.
Developing an investment environment in Africa is important. In thecurrent business environment, companies from America, Europe, India
and Turkey are making investments in Africa and earning profit byconducting usual business in partnership with people who are aware about
African market. Having a local partner is helpful.
The first step is to work together with local partners. If it is difficult tofind an African partner in a particular country, one can work with an
African partner of a different country or work in a third country or workfrom a different continent.
AfDB opened its Tokyo office in 2012 and found that the Japanese market
is a difficult market. AfDB is co-organizing and working together with the
African Diplomatic Corps to develop a Japanese market.
Mr. Yokoyama invited Mr. Hirano to share his view of Japanese companies
looking for partnerships in Africa.
Dr. Katsumi Hirano
Executive Vice President – JETRO

Mr. Hirano stated that when JETRO obtains feedback from Japanesebusinesses, the high risk level is pointed out first. Although Japanesecompanies think the risk is high, non-Japanese companies makeinvestments in Africa.
The presence of Japanese private sector isextremely low. For Japanese businesses to be truly global, they have tobe present in Africa and in regions other than Asia. Japanese businesses
must expand their interface and contact points with countries worldwide.
In this regard, JETRO is promoting Japanese investments into Africa andvice versa. Simultaneously, JETRO is trying to re-enhance economic
relations with other countries like India.
There should be total collaboration to strengthen the bilateral economic
ties between Japan and India. Japanese and Indian businesses need tojointly collaborate in third countries like Africa.
As part of the
globalization efforts of the Japanese companies, JETRO is promoting
activities, which are not just limited to certain regions but are promoted
worldwide.
Countries like France, UK, and India have a high level of presence in Africa.
Japanese businesses should collaborate with companies from thosecountries so that SMEs of Japan can make investments in Africa. JETRO
offers some training courses and explanation on case studies to Japanesebusinesses and local companies on such efforts.
Mr. Yokoyama summed up by saying that the World Bank Business
Ranking revealed that the African countries were not bad when comparedto the Asian countries in terms of doing business.
In acquiring a third country company, a traditional French trading firm, asa partner, what are the challenges, the background for that, the effect ofacquisition, and the lessons learned by Toyota Tsusho and what is the
future vision of the business?
Yasuhiko Yokoi
Executive Vice President, Toyota Tsusho Corporation

Mr. Yokoi stated that Toyota Tsusho chose a French company CFAO as apartner to do business in Africa.
Toyota Tsusho started over 90 years ago in Africa with trading as theinitial business. In the 90s, Toyota Tsusho made business investments inSoutheastern Africa. They established a network for sales and aftersales
service for automobiles. Through the sales and aftersales services, theycame into contact with many consumers in Africa directly. They learned
that for successful sustainable growth in Africa, they should be acceptedby the society and people of Africa.
In year 2000, they positioned Africa as a priority area, company-wide, andstarted various approaches towards expanding business in Africa. Firstly,with the knowledge of the market in Southeastern Africa, they started
making inroads into business areas other than automotive. But with noexperience of doing business in the Francophone region of Western or
Midwestern Africa, they could not gain a foothold for entering into thismarket.
Toyota Tsusho made various studies and decided on CFAO, which has along history of doing business in the Midwestern Africa. It is a highly
trusted entity and a preferred business partner. Toyota Tsusho waseyeing opportunities to tie up with CFAO. Automotive business being
CFAO’s core business is another reason Toyota Tsusho chose them as
their partner.
Toyota Tsusho made an expensive M&A deal of $234 billion, when it got
the information that the parent company of CFAO was reviewing its
business portfolio and was going to divest from CFAO.

This was the largest M&A deal for Toyota Tsusho, for which they did somedetailed vetting in advance and negotiated speedily.
The topmanagement of both companies communicated frequently to make quick
decisions. Although unusual for Japanese company, a deal was reached in2012 within a short period of time to obtain 98% of CFAO.
There are three positives with CFAO in the group.
Firstly, thegeographical coverage expanded. CFAO does business in the middle andwestern part of Africa. Toyota Tsusho does business in the Anglophoneareas of Africa. If the two territories are joined, with the exclusion of
Libya, Toyota Tsusho will be doing business in 53 African countries.
Secondly, Toyota Tsusho was able to retain 15,000 employees. Mr. Yokoi
was responsible for the negotiations of tying up with CFAO. Although theacquisition of CFAO is an acquisition of a company, it could be looked at itin another way as it was a company with 20 to 30 years of experience inAfrica.
Thirdly, Toyota Tsusho was able to obtain a network of broad range ofbusinesses, starting with automotive; Carrefour, which is a retail brand;
and shopping malls.
To make the tie-up with CFAO a success, several points were heeded.
Firstly, the focus was on the growth of CFAO than the growth of theacquirer, Toyota Tsusho. Post-acquisition, the business was deployedwith this in mind. Human resources are an asset for a company and toprevent employee attrition, Toyota Tsusho respected the ownership andindependence of CFAO to support the realization of CFAO’s long-term
strategy.
Secondly, communication between the top management of the twoorganizations once a month is important to gain a perspective on the wayof thinking and to understand the people. When it comes to medium- to
longer-term plans and strategies, once in 6 months face-to-face meetingsand discussions are the norm.
By April this year, excluding new businesses, all of the businesses,
including the existing businesses of Toyota Tsusho, are now focused in
Paris, which is the headquarters for all of the businesses. With regards to
new plans, on the Japanese side Toyota Tsusho coordinates with Paris tocontemplate. Toyota Tsusho continues to uphold its concept of With
Africa and For Africa with which it wants to grow deep roots in Africa andgrow together with the continent.
Mr. Yokoyama summed up saying human resources and trying to develop
a network in-house to supplement what is weak is very important.
He invited Mr. Symerre to give a broader perspective on NEPAD’s role andcontributions towards regional integration and what it intends to promote.
Symerre Grey-Johnson

Head, Regional Integration, Infrastructure and Trade
NEPAD Planning and Coordinating Agency

Mr. Symerre began with what NEPAD does and how it uses its platform tobuild partnerships in relation to regional integration, infrastructure andtrade. Although NEPAD has been in existence for 15 years, it has beenable to attract more partners over the past 3 years.
Company CEO Dr. Mayaki gave the keynote at the first ever financing
summit on Africa’s infrastructure in 2014 in Dakar. Sixteen mega transboundary projects were going to be taken to Dakar. The summit wasgoing to be Africa-led and Africa-owned. The summit did not have any
Japanese companies as it was new. At the end of it, the Dakar process
identified and recalibrated the way business was being done at that time.
There were four major programs; science, technology and innovation;
agriculture; program on youth and skills; and a program focusing on
infrastructure. The 16 megaprojects were on energy, transport, ICT andwater. Money was not a constraint but the problem was that most ofthese projects were not properly prepared, so there was a need to prepare
better projects.
Secondly, there was no platform to engage private sector or look at transboundary mega projects as they cost millions and billions of dollars.
The African Union Technical Agency re-strategized their work to focus on
coordinating, facilitating and working with the regional economic
communities to push these projects. The first thing was to engage theprivate sector to help them understand what trans-boundary
infrastructure projects meant and what opportunities for financing could
be there for them.
Since it was not an easy task, the Continental Business Network was set
up. A number of Japanese companies are a part of this platform. Twovery supportive members, Mr. White and Mr. Yofi Grant are also part ofthis platform. The good news is that for the first time NEPAD put up aplatform, which looks at trans-boundary projects.
Two years ago, the first project, which was the Sambangalou Hydropower
Project in West Africa, dealt with four West African countries; Gambia,
Senegal, Guinea, and Guinea-Bissau. At that time, it was said that if thisproject was properly put together, with the private sector involvement at
its inception, could have identified opportunities on how to make it more
capital intensive and attract private capital. But that project went throughto become a public project funded by four countries.
NEPAD took each project at a time, using the CBN to engage private
sector.
Last year, NEPAD looked at Zambia, Tanzania and Kenya
Transmission Line, which is an energy project. The Zambia component
was put forward for financing. A number of private players were engaged,
including some Japanese companies who participated in the meetings last

year. Basically, NEPAD brings in private sector players into the project
design, which is critical for trans-boundary infrastructure.
Another challenge that was identified was that there was not enoughmoney to tackle the preparation of trans-boundary projects. When it
comes to national-based projects, the World Bank and the African
Development Bank fund projects like construction of road, toll-roads, rail
expansion and even energy generation, but challenges are faced in
preparing projects within the regional context that span over two or threeterritories.
There was a need to work closer with the NEPAD Infrastructure ProjectPreparation Facility or the NEPAD IPPF, housed at the African
Development Bank. Prior to preparing the project, NEPAD needed toassist countries in conceptualizing the project, doing the diagnostics, andhelping countries and project owners to apply for funds. This issue cameout at the Dakar Financing Summit, wherein if the private sector was notparticipating in project design, NEPAD was unable to assist countries in
preparing better projects.
Soft infrastructure was another challenge that was faced. In the past 2
years, NEPAD started looking at collaborating with JICA on the One Stop
Border Post, which JICA prominently set up in Africa. NEPAD introduced
an initiative called Move Africa, which came out of the World Economic
Forum discussions.
It looked at trade facilitation, just like US
government’s Power Africa and Grow Africa, which looks at the agriculture
value chains.
This platform gets logistics companies to look the problems identified intrans-boundary or cross-border trade in the terms of movement of goods.
NEPAD works closely with Japanese businesses and JICA to see how the
new system called the Traffic Light System can be introduced whichassesses a Border Post, based on the color codes of red, yellow or green,where red means challenge in terms of movement of goods, green means
easy flowing and yellow means somewhat easy flowing.
NEPAD has been working on these areas in the past 2-3 years. NEPAD iscreating these platforms to facilitate trans-boundary and cross-border
trade to ensure Africa’s integration. In the past 2-3 years, NEPAD has
been engaging the private sector to look at the platforms and get their
input at the inception stage of the project design to attract necessary
investments for trans-boundary infrastructure that is being facilitated andcoordinated with the regional economic communities.
Mr. Yokoyama invited Mr. Kuppuswamy to advice Japanese companies
based on his experience of looking for a good business partner andpartnering with foreign companies to conduct business in Africa.
S. Kuppuswamy
Member, The Confederation of Indian Industry Africa Committee, Advisor,
Group Finance and Special Projects, Shapoorji Pallonji Group Companies

Mr. Kuppuswamy started with a story of his experience in Africa. His
company constructed the Presidential Office of Ghana, which figures
among the top 10 Presidential Offices in the world, less than a decade ago.
When the job was about to get completed, there was a regime change.
The investors feared that the new party might completely scrap the
project and make it a hospital or something on those lines. But when the
African leaders saw that the company executing the project was good, andthey saw the merits in the company’s execution and the advantages of the
project itself, they recognized it and continued with it.
This is what happened with Kuppuswamy’s company. Their fears were illfounded as the new administration not only moved into the Presidential
Office but also asked them to build a railway network in Ghana. Thus, acompany called the Afcons Infrastructure was formed to build $400 million
Tema-Akosombo Railway Project. As the project was signed and the loan
was concluded, there was yet again a regime change. The previous
political party came back to power and there were fears that this project
would be scrapped. The fears subsided when the new government asked
the firm to explore possibilities of extending the railways further.
This happens when good companies have good practices, execute projects
in style, conform to the required standards, and understand the nation’s
culture.
As they say in Japanese Ame futte ji katamaru or as it rains, the groundsolidifies and does not break up. Good companies from India have arecord of executing great projects. The Confederation of Indian Industry
has been championing African business for the last 25 years. It isamazing to know that Toyota Tsusho has been doing this for more than 90
years.
CII plays a catalytic role in strengthening India-Africa business relations.
It is linked to 75 counterpart organizations, in 37 African countries.
Shapoorji Pallonji works in more than 24 of them.
CII works with the Government of India to promote Brand India with AAA
Technology, Appropriate, Affordable and Adaptable.
This is where
Japanese and Indian companies can collaborate. India has an excellent
locational advantage as it is sandwiched between Japan and Africa.
Although Indians are culturally closer to the Africans, Japan and India
appreciate each other’s cultures also. India and Japan can make excellent
partners, as Japanese companies understand the way Indian companies
collaborate and act, so India and Japan can collaborate to execute
projects in Africa.
CII Africa organizes multilateral business forums. It is more south-south
cooperation. Just like the TICAD, conclaves are held. There are 13
regional conclaves. Soon, the East Africa Business Conclave will be heldin Kampala, in November 2017. Japanese are also invited to participate in
it in large numbers.

This strong India-Africa connect can be exploited by the Japanese. India’s
support during the independence struggles, especially in South Africa, hascreated a lot of understanding, affection and mutual appreciation between
India and Africa, which can be advantageous for Japanese companies
wanting to do business in Africa, in collaboration with India.
Prime Minister Shinzo Abe announced $32 billion line of credit for Africa.
Prime Minister Narendra Modi also announced $10 billion line of credit.
This can make an excellent combination.
Today, India is the 5th largest investor in Africa. Indian companies have asignificant presence. Plenty of new great projects have been executed
successfully. The firm has built Gambia’s National Assembly, which isconsidered the best building in West Africa today. The Presidential Officeof Ghana is listed among the top 10 presidential offices in the world.
Another company, Jindal did the Chirodzi mine in Mozambique which isanother exemplary project. In Madagascar, Afcons Infrastructure hasdone the Ambatovy Port Project for the nickel-cob mining, where
Sumitomo Shoji is also part of that mining project.
The firm is able to withstand adversities, like the coup in Madagascar.
The work did not stop for more than a day even when the entire nation
was in a shambles for a month or so and everything came to a standstill.
Indian companies are resilient and are able to absorb the shocks, as they
are in a position to adapt and work in adverse circumstances. Bajaj, Airtel
are all companies which have done a lot of work. The firm has built threeports in Mauritius and three in Liberia.
India’s geography, historical connection, English-speaking employees,
market and growth similarities between India and Africa are some of the
few advantages. Both the countries have faced colonialism and therefore
understand each other. Indian businesses, with their desire to expand
overseas, have established their presence in resource-rich Africa with thesupport of Indian government for operations in Africa.
This will help both Japan and India to together exploit the opportunities
that are there which would be a win-win situation for India, Japan as well
as Africa. There is an imperative need to stop neo-imperialistic forces or
people who are keen on exploiting the resources for their own advantage.
This should be done to restore Africa’s geopolitical balance.
This can best be achieved by being in a position to collaborate together togive Africans a robust infrastructure, generate employment opportunities,
and impart education and skill development. India has been doing humanservice in this area. Certain countries go to Africa and let loose a deluge
of funds, but they do not transfer technology or educate the labor force,
whereas Indian companies successfully transfer technology and upgradeskills of the Africans.

Japan has a long-term need for mineral resources, which can be achieved
through a win-win partnership of Japan and India, with Africa being aparticipant. JICA and Exim Bank of India can join together in a 70:30 or
60:40 ratio.
On the basis of the ground presence of the labor force that is available,
Japanese companies could consider sharing their work in a 30:70 inverse
proportion. Credit enhancement can be given.
These are a few of the several ways in which India and Japan cancooperate and bring out the best for all. It will be a strategic partnershipfor all with huge synergies and benefits of a long-term nature.
Mr. Yokoyama summed up by saying that countries could work with India
to conduct business in Africa.
He invited Mr. Negatu to comment about the latest situation in Africa
about M&A partnerships and FDIs?
Zemedeneh Negatu
Global Chairman, Fairfax Africa Fund

Mr. Negatu gave a macro perspective about how Fairfax Africa Fund, FFA,
which is an American private equity firm, goes about doing business inAfrica, specifically from an M&A perspective. Even though FFA is originallyfrom Ethiopia, it does a lot of deals across the African continent.
There is a saying that Africa is not a country. There are 54 Africancountries, so the entry strategy, the deal strategies, and how to go about
investing in Africa depends on the individual country, the region, and thesector. The United States’ people approach Africa perceiving it to be justone big jumble. This perception is usually a disadvantage and not positive
for Africa. Certainly, this is not the case in Japan as it is a very
sophisticated and outward-looking country.
Interestingly, FFA as a private equity firm does a number of M&A deals. It
has done a number of M&A deals in Ethiopia and a few other Africancountries.
Looking at Japan, over the last 5 years Japanese investment of outbound
M&A was $350 billion which is a very large number. Last year alone,
Japan did $100 billion cross-border M&A deals. This is a very large
number for 1 year. In contrast, in 2016, Japan was amongst the top 10
investors in Africa in terms of foreign direct investments to the tune of$3.1 billion. If $100 billion was invested purely on M&A, it does not even
include some of the Greenfield projects. The total spend was about 3% of
the investment made in Africa.
Considering Africa’s potential, it is dangerous to pretend that Africa is acountry, but pretending that it was a country for a moment, Africa’s total
GDP on the Purchasing Power Parity, PPP basis, would be $6.4 trillion,which is a very large number. By that measure, Africa would be amongst
the five largest economies of the world.
Keeping this in mind, why the Japanese investment is relatively small
compared to the $6.4 trillion GDP size of Africa.
Also, the large
investments made by some of the other countries go down the cascade.
The opportunity is there for the Japanese. The Japanese investors canrelate to the things drive Africa’s growth like demographics, which forJapan is different than Africa’s. Africa’s demography reflects that it is avery large growing young population undergoing urbanization.
The
forecast, depending on the outlook, is either positive or worrisome. In a
way it is positive as in the next 30 years, Africa’s population will double
from 1 to 2 billion which is a very powerful incentive for investors to lookat in Africa.
In terms of investment, Japanese investors should look at M&A, Greenfieldprojects, and investments outbound which are practiced every day. In
terms of the investments that FFA has done, FFA was looking for countries
with high growth potential and large volumes. Ethiopia is the second
most populous country in Africa with 100 million people. Nigeria has alarger population. For FFA, this was a no brainer. One of the investmentsthat FFA made was in the area of fintech, mobile banking.
FFA invested in a company that in less than a year signed up a million
subscribers, for people to use their mobile phones as payment systems.
In Africa, 80%-90% Africans are do not bank in the traditional way.
Japanese are very good at technology. FFA co-invests with others, likethe European and the Middle Eastern investor group, in the manufacturingsector and in construction materials.
Looking at the urbanization trend, much of Africa is going to become
urbanized in the next 15 to 20 years. The input that goes in theinfrastructure and the construction sector will be one of the major
attractions and FFA has invested in that.
The key message for the Japanese is that there is opportunity. There arerisks as well, but they can be ring-fenced.
It was interesting to know how Toyota entered the market. Mr. Negatu
was involved in a very large Japanese investment in Ethiopia. People who
smoke cigarette know JTI very well. Japan Tobacco, through a JV by
acquiring 40% of the National Tobacco Company in Ethiopia, made one of
the largest Japanese investments in Africa last year. It was a $510 million
deal. This shows that there are various ways of entering a market
through M&A.
On the question of how to enter the market, it would be better to enter
the African market through local partnerships. There are various reasons
to look for local partners. Importantly, they know the culture, can better
manage risks and as they get around they have a sense of what works
and what does not work.

The challenge for Japanese companies like Toyota or other big Japanesecompanies is that they do not want to look for a local partner as they havethe capital and the knowhow, but do not have the sense of themarketplace and so they miss the point.
In a lot of places in Africa, equity is becoming important to African
government. Africans want to participate in the growth of their own
economy, so just having direct investment owned by foreigners creates
resentment. Joint ventures and partnerships should be considered to help
build up suppliers. Success factor and profit margins will increase if
suppliers are locals.
The bottom line is there is opportunity in Africa. They need to besegmented, if one thinks about manufacturing in particular. FFA has
looked at it and re-segmented them into two buckets. First are the top
four or five countries for manufacturing will be South Africa, Nigeria,
Kenya and Ethiopia, and there is a good reason for that. On a tiered basis,one can go down on sector-specific basis like agro-industry andinfrastructure.
It is a bit of a challenge to encourage a lot of Japanese infrastructurecompanies to come to Africa these days. The Japanese find the Tokyo
Olympics 2020 very attractive and do not want to stay back in Africa, but
if one looks at long term, beyond 2020, it would be prudent to invest in
African. People do not want to come in today and invest in Africa as they
are making good profits rebuilding sites like Fukushima and other places,but one needs to look beyond that and look at the infrastructure.
Additionally, it is in the best interest of Japanese to improve African
infrastructure and again this is an area that FFA has invested in. It is
important to keep in mind that even though the Chinese are building theroads, it is the Toyotas that are running on the roads. Even though the
Chinese are building the airports, it is the Boeings and the Airbus thatland at these airports. It is in the best interest of the Japanese to actively
engage with Africa, for the likes of successful companies like Toyota tocontinue to sell.
In summary, the opportunities are there, partnership is the way to go,
and firms like FFA are obviously looking for Japanese partners tocollaborate in the sectors of infrastructure, manufacturing, agroprocessing and others.
Tadashi Yokoyama summed up by saying that when it comes to Africa, therisks should not be overemphasized and with all the growth opportunities
that resource-rich Africa provides, it is attracting a lot of FDI by Japanesefirms and private sectors are setting up businesses.
By 2050, the population will double from 1.2 to 2 billion, and middle
income will also increase. By 2050, Japanese companies will have to havea strong presence in Africa by making joint investments throughpartnership for them to be globally present business-wise.

With this, Mr. Yokoyama invited Dr. Hirano to comment on the importanceof partnership. JETRO promotes investments and trade, but to promotepartnership, what kind of cooperation and support can be provided andhow would JETRO promote and help a third country or new types ofpartnerships.
Dr. Katsumi Hirano stated that JETRO was doing business matching byoffering opportunities for companies to encounter each other. This is notjust being done in Tokyo but also in Paris, Istanbul, Dubai, and in ruralcities as well. Japanese companies themselves have operations overseas.
JETRO does sessions in cities that already have its offices to do businessmatching with local businesses of those particular cities.
In Africa, Japanese companies do not big business projects all bythemselves. It is always done through partnership. Japanese companies
have a certain level of presence in Africa. It is not just Toyota. There are
Japanese companies that have number 1 or 2 ranking in certain sectors,
but the number of such Japanese companies with large presence in Africa
is still very low. To increase the number of Japanese companies in Africa,
they need to tap on their expertise that they have gained in Japan as wellas in other countries for them to engage in profitable projects.
Since the socioeconomic environment is completely different from Japan
or Asia, they need to draft a new business model for these projects to be
profitable. They have to familiarize with the process of creating a new
business model. The discovery of creativity within companies will placethem at the next stage of globalization. This would evolve the corporate
identity. If the corporate identity does not evolve, no Japanese company
can truly become global in the true sense of the word. That is anotherarea where JETRO can help.
The best means to do that is to look around the globe and not just in
Africa. Although surprising and shocking, there are certain successful
business models.
These business model cases can be shared withJapanese businesses. From such perspective, Africa is a treasure trove ofsuch innovative business models. At one point in time, the BOP businessmodel became quite popular in Japan. JICA also promoted BOP business.
Back then, BOP business meant volume business in the future because of
the rising middle class. Unfortunately, the human society consists of poor
people as well who is always the overwhelming majority. The truth is thatin the past decade the poor people that form the bottom of the pyramid,
is increasing. This huge bottom of the pyramid market is a potential
customer, a huge potential business opportunity. This is what BOP
business is about. Only Ajinomoto are engaged in BOP business in Africa
as of now, but it is a great source of revenue and profit.
One example is the Standard Bank, which is the biggest private sector
company in Africa. South African banks are all engaged in BOP business,no exception whatsoever, but this kind of mindset does not exist inJapanese financial institutions. Although the standard business model offinancial institutions exists in other countries, there is no business modelin Japan that offers bank accounts with less profitability to the poor people.
If Japanese financial institutions and businesses learn such businessmodels, they will be able to capture more business opportunities in Africa.
By using resources such as the Developing Economy Research Institute,
within JETRO, stronger pathways can be made into Asia. They can also be
introduced to companies of other countries that are already successful inAfrica to enhance more partnerships.
Tadashi Yokoyama asked Mr. Yokoi if there was any difference in thestrategy of Toyota Tsusho making partnership in Africa and partnership in
Asia, and what was the background for that.
Yasuhiko Yokoi stated that in terms of partnerships, companies that want
to do business overseas need to look for a partner with knowledge about
the market and personal or physical network in that area. If the company
that wants to make forays does not have this, they have to look for apartner that is common to all locations and not only Africa. Asia andAfrica are appropriate, as they are in stark contrast to each other. In Asia,
businesses have been going on even before the war. Japanese businesses
are knowledgeable about Asia.
Such companies are being developed in Asia. It is possible for theJapanese companies to cultivate business on their own or team up with
Asian companies to expand their business. When one thinks aboutbusiness in Africa, the largest issue is that they are far away from Japanand there is very little history between them. There is no knowledge ofand physical or personal network that exists in Africa.
Local entities, either French or Indian companies, with these strengths
need to be looked for as there are opportunities for all these companies.
In Central and Western Africa, Toyota Tsusho has chosen a French
company as a partner.
In the Southeast, Indian or certain Asiancompanies have a very strong presence there, and they may beappropriate partners.
Another specific example is Toyota Tsusho is collaborating with Yamano in
Nigeria to do a CKD manufacturing of motorcycles. This is mostly cheaply
manufactured in India and is then sold in Nigeria. This is one possible
format.
Tadashi Yokoyama asked Mr. Grey-Johnson to share NEPAD’s viewpoint on
any implications that existed at the level of regional integration toestablish partnership.
Symerre Grey-Johnson stated that NEPAD looks at the regional dimension
and how and what NEPAD does impacts and brings together much more
integration. If one looks at the four factors of production in basic
economics, and then looks at the continent in terms of land, Africa has itin abundance.

But if one looks at it in terms of security, there are less than five countries
that are affected in terms of their capital cities being unstable and going
through a period of insecurity, while in the past 12 months capital cities inother parts of the world and continents have been affected with all sorts
of security threats. This is based on the news in the media.
In terms of labor, Africa has abundant growing, excited, youthful
population capable and innovative enough to transform the African
economy globally.
In terms of entrepreneurship, there is so muchinnovation in the area of finance and mobile banking, like M-Pesa and soon.
Finally, in order to attract capital to integrate economies, Japanesecompanies should leverage their ongoing relationships in the Southern
Africa region by working in partnerships.
The 230 Japanese companies that exist in South Africa need to beleveraged and expanded into the SADC area. The East African community
is one of the most regionally integrated economic communities in Africa.
It has been learned that India is doing a lot more work in this area, andthe Japanese companies need to leverage this by working with the Indianbusinesses to move from Kenya, to Uganda and to other regions.
West Africa is another region that is doing well in terms of trans-boundary
trade and trade facilitation. The Japanese companies that are working on
the continent need to look at partnerships with the ASEAN countries andIndia to leverage and work within the African region by scaling up andencouraging infant industries and bringing more entrepreneurship into thebusiness mix.
Tadashi Yokoyama asked Mr. Kuppuswamy if India and Japan are going tohave a partnership, what sectors would it be and what sectors in the
African region would be recommended.
Mr. Kuppuswamy stated that a robust infrastructure is a sign of Africa’s
development. Estimates suggest that on an annual basis around $93$100 billion per year will be required. Out of this, even half has not been
given. One of the areas where Japan and India can collaborate for Africa’s
development and an area that scales up to Japan’s liking is infrastructuredevelopment which could lead to the sovereigns or promotion of public
private partnership projects. This one area is strongly recommended.
In this regard, Indian companies have a good record as they have alreadyexecuted projects with Japanese in India and elsewhere, like the metro
projects of Delhi Metro, Chennai Metro, and Kolkata Metro. These are all
projects where JICA funding exists and Indian companies have performed
exemplarily. This is another area that can be strongly recommended.
Another area is housing where development has to be there. Healthcare,within budget hospitals, is an area where Indian companies in general
have made strides. They will be in a position to take budget hospitals andhealthcare services to Africa at an apex, regional as well as the districtlevel.
Pharma is another sector where collaboration can be done. Automotive isan area where India and Japan have collaborated in the past and it will bepossible to mutually support each other in this sector in Africa as well.
India has collaborative strengths rather than competing strengths. Japanis an acknowledged leader in technology which is well-accepted worldwide.
India can supply the manpower, labor force, and adaptable technologies.
These sectors will make a winning combination for this kind ofcollaboration.
Tadashi Yokoyama asked Mr. Negatu about the dos and don’ts in looking
for a JV partner? What are the risks and how should they be mitigated orcontrolled?
Zemedeneh Negatu stated that FFA looked for credible people andorganizations. FFA does the due diligence on who is who. Although itsounds very basic, it is important. The partner that that one gets intowith into partnership with should share the same value systems. There
should be an alignment of where the partnership needs to be taken
because a lot of partnerships do not work because of misalignment.
If it is a multinational, the first thing to look at is what the partnershipbrings to the table. The typical thinking is that if it is an African company
or partner, they might be small and the multinational can do it themselves.
It is a mistake not to include local partners. They may not bring billions ofyens or dollars, but they have something intangible.
Secondly, equity is becoming a buzzword in Africa, but beyond the
buzzword, the Africans are saying that the continent is growing and so itcannot just be foreigners coming in and benefiting from Africa’s growth.
When someone goes to a country, they become a part of the community
and they want the community to grow and appreciate it. If one is in the
fast-moving consumer goods business with investments in a number ofbusinesses, the people who buy the consumer goods products feel thatthey have equity in the product.
A partnership is multidimensional and not one-dimensional, like in the
United States where a guy, who has the money and knowledge, will dothe business, but in the developing countries, especially in emerging
Africa, it is very important to include partnership. Africa is changing, so
the reality of change also needs to be reflected in how these investors cango about doing their business in Africa.
One final word of caution is that Africa is not for asset flippers, meaningthat one cannot come in today to exit tomorrow. Africa is a long-term
strategic investment. If one does that, they will do very well.
Tadashi Yokoyama summed up by saying that in making partnerships,
people must meet each other to see if they can create the same chemistry.
It is important to conform.

He stated that although a good discussion took place with the participationof the panelists, a major function of this forum was happening throughB2B meetings and business matchings.
Talking with each other isimportant to help find a good partner. JETRO is also doing that.
Another point that was discussed was the third country partnerships,
which do not mean that one should partner only with third countries andnot with the local partners. Although the purpose is to find a good local
partner, it is important to find a local partner, having B2B businessmatchings, with people from Africa coming to meet the Japanese people.
Mr. Yokoyama concluded the session by thanking all the members ofpanel for their valuable contributions.