Japanese businesses should invest more in Africa – Adesina

President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, has said Japanese businesses should invest more in Africa, where investment opportunities and returns on investment were among the highest in the world.

This is made known in a statement from the Communication and External Relations Department of the AfDB in Abuja.

The AfDB president said this to participants at the 8th Tokyo International Conference on African Development (TICAD8), where 20 African heads of state attended from Aug. 27 to 28.

Adesina commended the Japanese government and private sector for their strong support to Africa’s development.

He told Japanese businesses to assess Africa’s investment opportunities based on facts and evidence, and not on perceptions.

“In 2020, Moody’s Analytics performed a 10-year cumulative assessment of global infrastructure debt default rates, by region.

“It found that Africa was the region with the second lowest cumulative default rate, after the Middle East.

“That is proof once again that infrastructure as an asset class in Africa is solid, secure, and profitable.”

He noted that African countries would require significant financial resources to cope with the impacts of Covid-19, accelerating climate change and Russia’s war in Ukraine.

“This is the time to strongly support the African Adaptation Acceleration Program to mobilise 25 billion dollars for climate adaptation for Africa, especially as we look forward to Cop-27 in Egypt,” Adesina said.

He added that the bank’s African Emergency Food Production Facility, launched in May, was providing 1.13 billion dollars for 24 countries in financing an expected 1.5 billion dollars for emergency food production.

Adesina thanked Japan for its contribution to the facility.

“I am delighted that the Japan International Cooperation Agency (JICA) has provided additional co-financing of 518 million dollars to support the facility.”

He stressed that Japanese firms, which were bold in their investments in Africa, were those that were prospering.

He gave the example of Toyota Tsusho’s investment in automobile factories in South Africa, which had generated 8.5 billion dollars in revenues in March.

Others, he said, included Komatsu and Mitsubishi Heavy Industries.

Citing Africa’s youth entrepreneurship and innovative skills, Adesina said: “Africa is home to a vibrant fintech ecosystem that is leading the continent’s digital revolution with the highest potential to lead the world.

“The continent is home to 576 fintech start-ups and they are run by young people.”

Adesina named other vital investment sectors, like the production of lithium batteries that power electric vehicles, agri-business and renewable energy, including hydro power, wind and geothermal sources.

Speaking through video, Japanese Prime Minister Fumio Kishida, said Japan had achieved its goal of contributing 20 billion dollars to Africa within the private sector, a goal it had set at TICAD7 in 2019.

Kishida also announced new commitments and said Japan “will provide co-financing of up to five billion dollars, together with the African Development Bank, in order to improve the lives of African people.”

Senegal’s President Macky Sall, said Japanese corporations had the “technological and financial capacity needed to set up partnerships in Africa in sectors such as infrastructure, transportation and housing.”

Deputy Secretary-General of the United Nations, Mrs Amina Mohammed, commended the foresight of Japan’s leadership in establishing TICAD in 1993.

“Thanks to platforms such as TICAD, we already have the partnerships in place to respond to these challenges in solidarity.”

The African Union Commission’s Chairperson, Moussa Faki Mahamat, lauded Japan for its efforts to build African capacity through education and training.

Mahamat praised a Japanese initiative that had trained over 1000 young Africans in nutrition.

TICAD8 also included the signing ceremony for 91 Memoranda of Understanding that Japan’s government and businesses had agreed with African corporations or governments.

The pacts included projects across all five regions of Africa to develop human resource technical skills and green hydrogen, water desalination and geothermal solutions.

Japanese officials and business leaders, and heads of international organisations also took part in the conference.

TICAD, which takes place every three years, is organised by the government of Japan, the United Nations, the United Nations Development Programme, the African Union Commission, and the World Bank.