The Second Japan-Africa Business Forum

Session 1

TICAD and Business – Feedback from the Yokohama Action Plan to theNairobi Declaration
SpeakerTakeshi Osuga
Ministry of Foreign Affairs of Japan
Ambassador and Assistant Minister
Director-General, African Affairs Department – Middle Eastern and African Affairs
BureauMr. Osuga thanked the organizers for inviting him to speak at the forum.
He spoke about TICAD being the main framework of Japan’s engagementwith Africa, not only in development but also in economic, political andsocial aspects.
The first letter “T” stands for Tokyo as TICAD started in Tokyo in 1993, 3years after the end of the Cold War, when the entire western world waslooking eastwards, Japan was the only visionary to look south towards
Africa.
In 2013, TICAD V was held in Japan every 5 years but the Africancolleagues wanted it to be held once every 3 years with a strong wish to
hold it in Africa. Hence, TICAD VI was held in 2016 for the first time on
African soil in Nairobi.
Since TICAD V, it is co-organized by Japanese government, the WorldBank, UNDP, UN Secretariat and African Union Commission. TICAD VI
was held in August 2016 in Nairobi and was attended by over 11,000people, including 3000 Japanese and 53 African countries. Nairobi wasfull of Japanese people. Over 200 Japanese companies, including 77
business leaders accompanied Prime Minister Abe to participate. A total of73 MOUs were signed between Japanese companies/agencies and their
African partners.
TICAD’s unique characteristics are that it is an open and inclusive forum
participated by multiple stakeholders, unlike other partnership forums ofAfrica with a plethora of countries like China, India, France, EU, Turkey orSouth Korea. TICAD’s agenda is aligned with Africa’s own agenda which isAgenda 2063 of African Union.
African countries and regional organizations like AfDB or regional
economic communities, international organizations, including UN agencies,
traditional OECD and emerging donors like China, Korea, India and others
participate. Private sector, including businesses, civil societies, NGOs andacademia participate.
TICAD emphasizes on human security, people-centered development andeffective implementation with integrated follow-up mechanisms every year.
The 3-yearly summit meetings are intertwined with follow-up ministerialmeetings and a Joint Monitoring Committee at the senior official level.

Thus, the Nairobi Summit will be followed by the first Follow-Up Ministerial
Meeting in Maputo, Mozambique.
TICAD VI focused on three challenges that emerged after TICAD V held in
2013. The first challenge of downturn of prices of natural resources andcommodity prices identified a new agenda of economic diversification andindustrialization to address and realize a quality Africa.
The second challenge was the Ebola crisis in Western Africa and the focus
was on health to realize a resilient Africa.
The third challenge was terrorism and violent extremism influenced by
ISIL in the Sahel region, triggering massive migration and refugees which
led to the identification of the development agenda of promoting social
stability to realize a stable Africa.
Private sector businesses have an important role to play in all threechallenges but particularly relevant is addressing the first agenda of
Economic Diversification and Industrialization.
In TICAD VI, Prime Minister Abe committed to invest US $30 billion for thenext 3 years in both public and private sector, including 10 billion for
quality infrastructure. This includes US $3.3 billion for expanded EPSA,
Enhanced Private Sector Assistance Initiative, which is a joint Japan-AfDB
Initiative to nurture private sector in Africa. Prime Minister Abe also
committed to provide training for 30,000 people, who will contribute toindustrial development of the continent.
Japan made these commitments which will be monitored in the upcoming
Maputo Ministerial Meeting.
The Public and Private Sector Joint Mission for Promoting Trade andInvestment is Japanese foreign ministry’s initiative where they will send
Vice Minister level delegation accompanying Japanese companies to visit
2-3 African countries every year. This year’s mission went to Nigeria andMorocco. The countries where the mission has never been sent can hopefor a future mission.
After the AfDB Tokyo Office websites uploads the number of Japaneseenterprises doing business in Africa, if the representatives of particularcountries feel that the number is not enough, they can participate in the
Maputo Meeting and partner with Japanese private companies.
SpeakerFrancois Oubida
Ambassador of Burkina Faso
Chair of ADC and TICAD Core Committee Chair

Mr. Oubida shared the important perspective of TICAD process, especially
TICAD VI on business partnership between Japan and Africa.

He mentioned the background of the decision taken in Nairobi, theimplementation process and how and what to expect from both private
sector and government for a successful TICAD process in promoting thebusiness.
In Yokohama, in 2013, the Head of State and Government resolved to use
TICAD framework as an engine to promote private sector-led growth.
From this standpoint, the diplomatic group felt that they have a role toplay in view of a good implementation of the resolve. Many activities
have been undertaken for implementation in close consultation withJapanese stakeholders. The Committee has met Japanese and private
sector representatives, civil society, and also engaged with respective
governments to take action accordingly.
Some lessons have been learnt from the activities. The impression fromthe business sectors was that a big corporation always says that they
have no information on the opportunities in Africa and have problem withthe language barrier which makes business very difficult. They also said
that they have no network and no opportunity to be supported if theyreally go to Africa.
The small businesses are eager to take risks but have no money. The
government side was also strongly committed at all levels to engage inany action to meet this challenge. The civil society also committed towork closely with Africa.
In conclusion, a strong will exists at all levels but more action needs to betaken to address the pitfalls.
There are some challenges at thegovernment level as well. Although the Japanese government committed$10 billon as ODA and promised that the private companies will commit
more than 20 billion to boost business with Africa, the existing financing
mechanisms are not well promoted. Many, including Japanese businesssectors, do not know about JICA, JBIC and other funding mechanisms.
The decision process for companies to get financing is very slow because
organizations like JBIC and JICA take up to 6 months to take action whichis too long for businesses to wait, so they end up starting over.
Other challenges are the bias in the perception of investment in Africa.
Japanese companies were ready to go to Africa if Japanese government
gave them the money. This is ODA and not investing. Investment means
for them to go with money to invest and increase the value add to create
jobs.
This misunderstanding exists due to the fact that Africa is still considereda risky continent as no information is available. The consideration they
are giving to this situation is higher than the real situation on the groundbecause other companies doing business in Africa are making profit in asafe environment.
There are challenges on the African side as well. To try to address thesituation and boost the business, activities have been undertaken. On theAfrica side, businesspeople are enthusiastic when it comes to businesswith Japan, as is evident with more than 200 people participating, butfinancing is a major issue.
When Japanese companies come, they expect to have counterparty orpartner, who can commit with them for business, but sometimes they are
reluctant as they wonder if the African businesspeople might have money
or not. The real dilemma for big companies is that they do not want to
put their money.
Based on this, the first Japan-Africa Business Forum sponsored andorganized by African Development Bank was organized. At regional level,forums at SADC and ECOWAS level were organized.
Forums areorganized at individual country levels to try to match the African andJapanese sector. In the process of preparing TICAD VI, the Committeecame up with a proposal and suggestion to Japanese government andother stakeholders to see how the situation on ground could be addressed.
Some proposals are where the Japanese government has been requested
to increase the budget at the JICA level and review the JICA procedure to
make access to funding easier. A permanent Japan-Africa Business Forumfor more interaction between the business sectors has been requested tobe established.
An information center should be established to make information on
opportunities in Africa available to Japanese companies. More roomshould be given to the civil society in the process with an increase in thebudget of EPSA. In Nairobi, the Japanese government took a very
meaningful decision by taking onboard most of the above suggestions andannounced very important measures during TICAD VI.
Most importantly the commitment in Nairobi Declaration detailed in thePlan of Action covered meaningful sectors like food value chain,
agriculture and blue economy, region-wide quality infrastructure, private
sector and human resources, business environment, trade investments,
human resources, public and private partnership. The other practicaldecision was to increase the ABE Initiative Scholarship to 1500 for thenext 3 years and to extend the credit line at JBIC for 1-year term by $2billion. They did announce that private investment would amount toaround US $20 billion.
The expectation from this forum should be to focus on what was stated.
Action should be taken on the measures to enhance the role of the private
sector. Many businesspeople from both sides want to sign a partnership
before they go back to their respective countries.
The question would be how to increase the role of private sector
investment and entrepreneurship, what the priority in business reform is,what kind of innovation must be useful and how to facilitate access tofinancing for businesspeople. Hopefully, this forum will pave the way for a
concrete proposal to see more priorities, pro-activities in the Africanbusiness sector in proposing a suitable candidate to be selected in theprocess of ABE Initiative.
If the private sector sends a student to benefit from ABE Initiative, thisreally helps build a bridge for business between Japan and Africa. TheJapanese and African business sectors should come up with newpartnership initiative to build a long-lasting confidence through joint
bidding at national and international level. The African side should use
the loans made available by TICAD process in combination with leading
Japanese technology to implement these projects.
Japanese companies should use their third country partners to invest inAfrica. If their counterpart in Japan takes a bold step to select them as
their representative, African and Japanese companies can build a longlasting relation and confidence.
The government should also keep
pushing for promotion of trade facilitation measures and endeavor toengage negotiation for signature of agreement such as mutual promotion
and protection of investments and on double taxation.
The Japanese government should make loans available for Japanesebusinesspeople holding good investment projects in Africa, rather thanjust asking them to come in. If they are funded, they will most likely go.
Therefore, loans should be opened for beneficiaries of the ABE Initiative
training with relevant startups.
When people are brought to be trained, sending them back home without
any training will not serve the purpose as they will go back to their officeor go to other countries. They need to be kept actively involved in thebusiness.
More support should be extended to regional economic
commissions to help them promote business relation with Japan in theirpolicies.
In conclusion, the Japanese government should be commended for its
resolve to support African development policy. TICAD will not last forever
as it is a circumstantial response to a situation. The positive result must
be boosted to make them irreversible and that realization will never
happen unless investment capital is available.
Although the Japanese private companies are expected to invest around
US $20 billion in Africa, the burden should not be put on them as theeconomic crisis is hard.
Rather the Japanese government, whether
individually or through a partner, should make the share expected fromthe private sector available within the African Development Bank in theframework of revised ECSA. This fund should be used for loans toimplement projects held by either African or Japanese, using Japanesetechnology. Compilation of all available information on existing financing
mechanism in Japan, including the required procedure, should be madeavailable to the public as it is very important.