The Seventh Tokyo International Conference on African Development began today in Yokohama on the theme Advancing Africa’s development through people, technology and innovation. The summit is being attended by over 20 African presidents.

1. Abe pledges to push Japanese investment in Africa but steers clear of target at TICAD. in his opening speech Prime Minister Shinzo Abe pledged to aggressively promote private-sector investment in Africa but failed to set a new numerical target on funds to be funneled to the continent. Facing dozens of top African leaders at the Tokyo International Conference on African Development, Abe claimed the Japanese private sector invested $20bn in Africa over the past three years. “I make this pledge to you. The government of Japan will put forth every possible effort so that the power of Japanese private investment of $20bn in three years should, in the years to come, be surpassed anew from one day to the next,” Abe said, although he did not mention any specific investment goal. In the previous TICAD meeting in 2016, Abe pledged that the Japanese government and private businesses combined would invest a total of $30bn in Africa over the following three years. Now Japanese Foreign Ministry officials claim that Tokyo has met the $30bn target, as the government extended official development assistance totaling $10bn and the Japanese private sector invested $25.6bn in Africa during that period. But the goal was met only after the Foreign Ministry recently changed how it measured the investment, from using a net basis to a gross basis, which considerably boosted the total figure. Ministry officials claimed the gross total is more appropriate, because net investment does not include certain funds such as dividends paid by African subsidiaries to the parent company in Japan.

2. Japan to drive Africa investment with enhanced trade insurance – Abe. Japan will offer enhanced trade insurance to boost private sector investment in Africa, Prime Minister Shinzo Abe said on Wednesday as his country competes with rival China for influence in the resource-rich continent. The enhanced insurance would fully cover loans to African governments, their affiliated institutions or private companies buying Japanese goods for infrastructure projects in Africa, according to government briefing materials and a state-run firm offering trade insurance. “For example, our cooperation with local financial institutions will create a new trade insurance that could cover 100% of your transactions,” Abe said in his speech.

African perspectives and TICAD7

1. @AUC_MoussaFaki: The @_AfricanUnion team held a productive meeting with Japanese PM @AbeShinzo on how to further deepen the strategic partnership with Japan through high-level consultations, including regional and continental priority areas of work through AUDA -@NEPAD_Agency

2. Kagame emphasises private sector role in development. President Paul Kagame on Wednesday told global leaders gathering in Japan’s capital, Tokyo to put the private sector at the heart of strategy for prosperity. He was speaking at the Tokyo International Conference on African Development, which he described as a valuable process that represents a spirit of optimism and partnership. Today, he said, many of TICAD’s innovations have become standard and the forum has continued to evolve in tandem with Africa’s priorities. “The key change is the importance given to the private sector in this TICAD,” he said. The Head of State cited Rwanda as a critical example for success when private sector development is put at the heart of strategy for prosperity. This, he said, was done using three types of investment:

3. Sisi calls for boosting Japanese-African cooperation, invites private sector for investments. Sisi also urged regional, African and international financing institutions to play a role in funding development projects in Africa and providing financial guarantees for the capacity-building of the continent with the view to beefing up trade exchange and investments. He also stressed the dire need of backing the African Union’s Post-Conflict Reconstruction and Development policy, along with building the capacity of state institutions to undertake their duties in protecting their countries and shoring up peace and stability. [Japan-Egypt Summit Meeting]

4. President Cyril Ramaphosa’s address to the South Africa-Japan Business Forum. The coming infrastructure revolution, combined with the Continental Free Trade Area, means that manufacturing in Africa is the best way to sell in Africa. African’s GDP is already $3 trillion and is projected to be $5 trillion by the end of 2030, and a new generation of consumers will be looking to purchase automobiles, televisions, cell phones, food products and so much more. This consumer market gives manufacturers in South Africa and on the African continent an incredible base from which to develop. It offers a source of growth and development that, when combined with a competitive and low-cost environment for production, can be used to then extend the reach of manufacturing to the rest of the world. As the most advanced industrial economy on the continent, South Africa is well positioned to serve as the launch pad into Africa and the global market. We are taking steps to support investment and local manufacturing in our country. To that end, we have embarked on a number of initiatives aimed at creating what we call an Entrepreneurial State. This is a state that can work with the private sector to promote competitiveness and assure the success of our business partners.

5. @StateHouseKenya: The ongoing roll out of the UHC programme and the development of a Special Economic Zone in Dongo Kundu, dominated bilateral talks between President Uhuru Kenyatta and Prime Minister Abe Shinzo on the sidelines of the ongoing TICAD7 conference in Yokohama. During the talks, the PM said Japan will continue supporting Kenya’s ambition to achieve UHC through PPP arrangements. The two leaders also agreed that with the support of the Japanese government, Kenya will fast track commencement of Dongo Kundu SEZ & construction of Likoni Gate bridge.

Japan’s private sector and TICAD7

1. Africa beckons as land of deals for Japan’s top banks. Japan’s trio of leading banks will form collaboration agreements this week with various African financial services providers, paving the way for greater Japanese corporate investment on the continent. Africa’s potential beckons Japanese companies, not only for resource and infrastructure projects but also its growing consumer markets. Yet Japan’s banks have made few inroads into the continent, until recently. Sumitomo Mitsui Banking Corp. looks to sign five memorandums of understanding during TICAD7. The Sumitomo Mitsui Financial Group unit’s partners will include Kenya Commercial Bank. Mizuho Bank plans to partner with South Africa’s Standard Bank Group, Africa’s largest private-sector financial institution, to form a team catering to Japanese corporate clients. Mizuho will sign a memorandum with Morocco’s Attijariwafa Bank as well.

2. Corporate expansion in spotlight at Africa conference. TICAD 7 will also be more business-oriented than previous iterations as the Japanese private sector is “finally becoming serious” about the African economy, said Shigeru Ushio, director-general of the African Affairs Department of Japan’s Foreign Ministry in a recent interview. “The (Japanese) private-sector businesses have requested (the Japanese government) to let them take the driver’s seat and speak during a plenary meeting of TICAD for the first time,” he said. As a result, TICAD 7 will have a business dialogue session by representatives of the private and government sectors on 29 August. In the past, such a session was organized as a side event, but this time it will be upgraded to a plenary meeting for the first time. There are clear reasons for Japanese firms to be more serious about business in Africa:

3. Japan’s foreign direct investment stocks in Africa stood at just $8.7bn at the end of 2017: meanwhile, France made the largest direct investment in Africa with $64bn the same year, followed by the Netherlands with $63bn, the US with $50bn, Britain with $46bn and China with $43bn.

4. Keidanren’s proposals for TICAD VII. Keidanren, Japan’s most powerful business lobby: “Africa has realized high economic growth thanks to its rich natural resources and other factors. The gross domestic product surged from $632bn in 2001 to $2.1 trillion in 2016, as the economy expanded 3.4 times.”

5. TICAD7 Public-Private Roundtable Meeting: recommendations by the Japanese private sector (pdf). With a view to strengthening the “TICAD brand”, we would like to propose a “model change” to the TICAD process incorporating voices of Japanese companies which operate in Africa and understand the problems and issues of Africa from experience while leveraging its characteristic as an open multiple-stakeholder forum. This process should be the vital element of TICAD. Moreover, we propose the “Japan Business Council for Africa” be established as a permanent platform with participation of Japanese private companies doing business in Africa in a manner that reorganizes and develops the existing Public-Private Round Table Meeting.

   In the Council, it is expected to identify issues and challenges to be dealt with in the TICAD process (mainly issues to call on the African side to reform or improve) and priority areas in the strategy on Africa through public-private partnership. Proposing policy recommendations to the Japanese government and conduct a policy dialogue with African government leaders, ministers, and others along with the TICAD process are also envisioned. Furthermore, Working Groups on the specific themes and fields should be set up under the “Japan Business Council for Africa” with participation of private companies, ministries and agencies concerned to improve the effectiveness of recommendations by the Council.

6. JETRO to utilize TICAD to recover ‘lost opportunities’ in Africa. “Africa is far away from Japan, but we want to let Japanese companies know that there are business opportunities there,” JETRO Chairman Nobuhiko Sasaki said at a press conference in Tokyo. “JETRO’s role is to make a path for Japanese companies at the initiative of the private sector.” However, Japan’s presence in Africa remains notably low with exports to the continent at about $10.8 billion in 2018, down 27.3 percent over a decade, while the world’s exports to the region rose 17.2 percent in the same period, according to data provided by JETRO, which views this as “lost opportunities” for Japan. Under the theme of “Tsumugu: Intertwining Japan and Africa’s Future,” JETRO has focused on four areas: encouraging small and midsize companies to make inroads into the African market, boosting cooperation with entities in third-party countries, connecting African start-ups with Japanese companies and improving business environments.

Selected TICAD7 Side Events:

Science and Technology in Society Forum: address by President Ramaphosa. South Africa endorses the focus on science, technology and innovation as a priority theme for TICAD 7, given its great potential to accelerate African development through mutually beneficial partnerships with Japan. We seek more initiatives of this kind [the Square Kilometre Array project] and we wish to encourage global pharmaceutical companies to locate at least one of their innovation laboratories in an African country and to invest in young full time African researchers.

AUC, OECD Development Centre High-Level Policy Dialogue: Achieving productive transformation in Africa

Selected G7 Summit outcomes

1. G7 Leaders’ Declaration: Trade issues. The G7 is committed to open and fair world trade and to the stability of the global economy. The G7 requests that the Finance Ministers closely monitor the state of the global economy. Therefore, the G7 wishes to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices. The G7 commits to reaching in 2020 an agreement to simplify regulatory barriers and modernize international taxation within the framework of the OECD. [DG Azevêdo tells G7 leaders: WTO reform is opportunity to tackle inequalities]

2. The Business for Inclusive Growth (B4IG) coalition launched. A group of major international companies has pledged to tackle inequality and promote diversity in their workplaces and supply chains as part of an initiative sponsored by the French Presidency of the G7 and overseen by the OECD. Spearheaded by Emmanuel Faber, Danone Chairman and CEO, the coalition brings together 34 leading multinationals with more than 3 million employees worldwide and global revenues topping $1 trillion. Members have agreed to sign a pledge to take concrete actions to ensure that the benefits of economic growth are more widely shared. The platform, chaired by Danone, consists of a three-year, OECD-managed programme.

3. Affirmative Finance Action for Women in Africa: G7 leaders provide AfDB’s AFAWA initiative with $251m. “I am particularly proud, as the current G7 president, that the programme we are supporting today, the AFAWA initiative, comes from an African organisation, the African Development Bank, which works with African guarantee funds and a network of African banks,” Macron stated at a press conference at the G7 Summit in Biarritz. AfDB president Akinwumi Adesina: “Currently, women operate over 40% of SMEs in Africa, but there is a financing gap of $42bn between male and female entrepreneurs. This gap must be closed, and quickly,” he added. AFAWA aims to raise up to $5bn for African women entrepreneurs and the African Development Bank will provide $1bn financing. [UK backing for AFAWA]

4. G7 and Africa Partnership: remarks by President Cyril Ramaphosa. Our focus at this Summit on the digital economy is equally important. Through the cooperation we have envisaged here, we can work together to ensure digitisation reduces inequality and supports inclusive economic growth. The African Union Commission is currently developing a comprehensive Digital Transformation Strategy for Africa that will provide a common, coordinated response to realise the digitisation of the continent. This will lay the basis for the development of infrastructure and the institutions we need to maximize the opportunities presented by the fourth industrial revolution. It will also unleash the African spirit of enterprise and creativity and will generate more homegrown digital solutions and content. [G7 Summit’s Session on Climate, Biodiversity and Oceans: Environmental challenges greatly concern Egypt]