Tokyo Africa summit expected to further boost investment and trade

Kenya hosts the 6th Tokyo International Conference on African Development (TICAD) and it is the first time the summit is being held on the continent. Japan Prime Minister Shinzo Abe, Kenya’s President Uhuru Kenyatta and several other African heads of state and government will be in attendance. At the last TICAD meeting in 2013, Japan pledged a total $32 billion in public and private sector support for the continent over a five-year period.

NAIROBI, KENYA (AUGUST 25, 2016) (REUTERS) – Kenya is hosting the 6th Tokyo International Conference on Africa Development (TICAD) with over 30 African heads of state and 10,000 delegates expected to attend.

The conference will be officially opened by Japanese Premier Shinzo Abe and Kenya’s president Uhuru Kenyatta on Saturday (August 27).

This is the first time TICAD has been held outside Japan. The last five have strengthened ties, investment and trade between the world’s third largest economy and countries in the resource-rich continent.

At the 2013 conference, Japan pledged 32 billion US dollars in public and private support to help growth in Africa and encourage Japanese firms to invest.

Japan, a global leader in manufacturing of automobiles and electric parts has seen its export driven economy benefit from shipping products to emerging markets in Africa.

“We are expecting after this conference, we want the Kenyans… all of the Kenyans and all of the Africans to buy our good quality products. It is what we are expecting,” said Honda sales rep, Sakai Hito.

Japan is poor in natural resources and has been keen on Africa’s vast deposits of oil and minerals to help diversify its supplies of key commodities for its manufacturing sector.

Analysts say it is moving to counter the influence of China on the continent.

Japan’s direct investment in Africa was 460 million US dollars in 2011, compared with China’s 3.17 billion, according to the Japan External Trade Organization and China’s government data.

“Unlike China, Japan tends to have a wide array of sectors which it participates and a good mix of both grants and commercial loans. I think Africa has a lot to benefit from that type of engagement,” said Eric Musau, a research analyst at Standard Investment Bank in Nairobi.

East Africa’s largest economy has signed a list of deals with Japan over the years in sectors ranging from geothermal power to education and agriculture, which contributes 24 percent to Kenya’s GDP and 70 percent of export revenue.

“Japan has been a key player in different parts of the economy. If you’re looking from education, if you’re looking at improvement of science and maths to university education, Jomo Kenyatta University in terms of its setting up, looking at energy, the geothermal power really is a story of how much Japan had confidence in Kenya and how much that has played in terms of energy provision in Kenya,” said Musau.

Japan funded and equipped a resource centre at the Jomo Kenyatta University of Agriculture and Technology (JKUAT) that includes a noodle making factory set up in 2007 with an initial investment of 250,000 US dollars.

The noodles are made using locally sourced ingredients like wheat and sorghum. The Japanese food processing company, Nissin Foods trains students in the manufacturing process.

“They would want us to acquire the know-how which we can use our own selves using our own available resources and grow them into valuable products and services,” said Professor Muhoho Njoroge who runs the Nissin Foods programme at JKUAT.

Analysts say they expect big deals from TICAD6, even though there have been worries over the stability of the investment environment in some African nations, along with falling commodity prices.

Lack of infrastructure and concerns over resource nationalism have also been cited by Japanese firms as areas of concern.