SA, Japan to fast-track economic growth
The Japan-Africa Public-Private Economic Forum is expected to accelerate the promotion of private sector-led economic growth by encouraging networking among African and Japanese companies.
President Cyril Ramaphosa this evening delivered the keynote address at the forum, currently underway in Sandton, Johannesburg. Hosted by South Africa, the forum is organised by the government of Japan and the Japan External Trade Organization (JETRO).
The forum, which is attended by business executives and representatives of government from African countries and Japan, further seeks to assist and strengthen investment between Japan and Africa within the public and private sectors.
Plenary and thematic sessions tackling key issues in Africa’s development will form the core program of the forum. It will be accompanied by several side events including business networking.
In addition, the Japan Fair will showcase Japanese products and other events, including special sessions focusing on specific themes such as investment promotion and technology transfer and entrepreneurship.
In South Africa, Japan remains a major trading partner, with more than 140 companies active in the country and over 150 000 jobs created.
The South African government is committed to initiating measures towards economic recovery and creating employment opportunities.
Address by President Cyril Ramaphosa at the Japan-Africa Public-Private Economic Forum
It is my distinct pleasure to begin our celebration of Africa Month by addressing the Japan-Africa Public-Private Economic Forum here on African soil.
This year, 2018, is an auspicious year both for the continent and for Japan’s relationship with the continent. This year marks the centenary of the birth a great African leader, Nelson Rolihlahla Mandela. It is also 100 years since Japan established its first diplomatic mission on the African continent in the form of the consulate in Cape Town.
Over the last century, we have witnessed Japan’s quest to overcome the hardships of post-war reconstruction and the transformation of its economy, while we in Africa too are striving to achieve just, equitable and inclusive social and economic development to combat the scourge of poverty, unemployment and under development.
We are confident that this Forum will enable us to break new ground in further advancing the relationship between the countries of Africa and Japan.
This Forum is about cooperation and collaboration, not only between different countries, but also between the public and private sectors in those countries.
The social and economic challenges on the African continent will not be effectively addressed if governments and business do not work together.
Similarly, 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.
For Africa to grow and for its people to flourish, its economies need to be more effectively integrated into the global economy.
They need to attract capital, technology, expertise and best practice from advanced economies and use that to take full advantage of its plentiful natural resources.
Strategic relationships with countries like Japan are critical to this effort.
Trade ties between Africa and Asia have grown significantly in recent years.
In 2017, Africa’s exports to Asia as whole were worth around $64 billion, of which Japan accounted for around $8.3 [billion].
However, the current basket of exports is very much commodity-based, exposing African countries to price fluctuations and denying them the opportunity to extract additional value from these commodities.
African economies therefore need to diversify and shift towards greater production of intermediate and final consumer and industrial products.
These countries then need to ensure that their manufacturing capabilities feed into regional and global value chains.
As it stands, Africa is the second fastest growing region in the world and has the largest number of developing countries.
In the past decade it has grown at a rate of 2 to 3 percentage points faster than global GDP.
Regional growth is predicted to reach 4.3 percent in 2018, up from the 3.4 percent projected for 2017 and 2.2 percent achieved in 2016.
This upward trend is driven by increasing foreign direct investment flows, public investment in infrastructure and higher agricultural production.
In the near future, Africa’s youth will contribute significantly to the competitiveness of the continent.
With as much as 60 percent of Africa’s population under the age of 25, the continent has a massive opportunity for a revolution in productivity and growth.
However, this opportunity will only be realised if enough jobs are created.
This requires a fundamental change in approaches to job creation and skills development and a renewed focus on the continent’s economic capacity.
Africa’s ability to be globally competitive is undermined by poor and inefficient infrastructure.
The African Union’s Agenda 2063, which serves as the basis for Africa’s long term social and economic transformation, aims to address these challenges.
It aims to position Africa as a supplier of beneficiated resources by prioritising labour intensive manufacturing, doubling agricultural productivity and expanding the contribution of the ocean economy.
This effort provides an opportunity for Japan to collaborate with countries across the continent as we venture towards balanced, equitable and sustainable integration into the global economic system.
As a country that has an advanced infrastructure backbone, Japan can share best-practice models of infrastructure development with the African continent.
The relationship that Africa wants to have with Japan is built on what Mr Satoshi Miyamoto, the Executive President of the Japan External Trade Organization, refers to as the dual principles of ‘African ownership and international partnership’.
It is these principles that we find manifest in the Tokyo International Conference on African Development – or TICAD – process, which is a valuable platform for cooperation and collaboration.
In pursuing its economic development, Africa can learn much from Japan’s Kaizen philosophy, with its emphasis on productivity improvement, efficiency, support for SMMEs and skills development.
A necessary condition for all these efforts to succeed is a massive increase in investment in the continent.
As a country, we have realised that we will not be able to grow our own economy and reduce unemployment and inequality without a massive increase in both domestic and foreign direct investment.
We have therefore embarked on ambitious investment drive that aims to generate at least $100 billion in new investment over the next five years.
This drive will culminate in an Investment Conference later this year, which will bring together investors both from within South Africa and from other parts of the world – including from Japan.
There is a compelling case for investment in South Africa.
The country has stable institutions, a thriving democracy, an independent judiciary and a strong commitment to the rule of law.
South Africa boasts an advanced and competitive financial and professional services sector, backed by a sound regulatory and legal framework.
The country has been investing significantly in its economic infrastructure to expand its productive capacity and improve its ability to export its products.
Through the establishment of special economic zones and the use of incentive programmes, South Africa is increasingly attracting investment into manufacturing and related sectors.
We have established a ‘one stop shop’ service, which brings together key government departments in a single location to provide specialist advisory services, fast track investment projects and unblock and reduce red tape in government.
We are addressing outstanding regulatory issues, such as the finalisation of the Mining Charter in consultation with stakeholders.
This will provide clarity and certainty in an industry that has a huge potential for job creation, growth, beneficiation, transformation and empowerment.
A major part of South Africa’s economic drive is to accelerate the process of economic integration in the Southern African region and across the continent.
The agreement in Kigali in March on the establishment of an African Continental Free Trade Area will create a single continental market for goods and services, with free movement of business persons and investment.
It is expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for production at scale, continental market access and better reallocation of resources.
We are also pursuing other initiatives to promote intra-African cooperation on investment, infrastructure development, tourism and agriculture.
Africa is an investment destination with significant unrealised potential.
Many Japanese companies are perfectly positioned to become part of Africa’s inclusive growth story.
Several Japanese companies have a keen understanding of Africa’s ambitions to become an industrialised continent.
As South Africa, we have seen the participation of Japanese companies in the productive sectors of our economy such as automotive, components electronics, mining and infrastructure.
Japan is among the top 10 investors in South Africa with 280 companies – such as Toyota, Isuzu and NGK – operating in South Africa.
This forms a firm foundation for Japan’s stated intention to further strengthen partnerships with the African continent.
In line with TICAD VI pledge of $30 billion in investment for 2016 to 2019, Japanese companies need to scale up and accelerate investment in Africa.
The increase in digitisation and use of cutting edge technology and innovation are critical factors for Africa to ensure it takes advantage of the fourth industrial revolution.
There are many opportunities for Japanese companies in areas such as the use of smart irrigation in water scarce areas, small scale embedded generation and off-grid solutions for rural electrification, and the provision of broadband for rural development.
There is also great potential in financial services.
African economies need capital and Africa’s people need banking.
We therefore invite Japanese banks to expand their presence on the African continent, which, among other things, would greatly facilitate trade and investment between Japan and Africa.
A century after Japan formally established a diplomatic presence on the African continent, the time is now right for Japan to establish an even more significant economic presence.
Africa is a continent on the move.
It is entering a new era of growth and development.
To sustain this progress, Africa will need to deepen its relationships with countries like Japan through greater trade, investment and technological exchange.
This Forum is a critical and valuable opportunity to further such ties.
It makes the bold statement that Japanese companies and its government are committed to the realisation of Africa’s potential.
It makes the bold statement that the African continent is open for business.
I thank you.