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Bloated Japan-Africa Ticad summits have failed to realise their expected investment

Bloated Japan-Africa Ticad summits have failed to realise their expected investment
Then Japanese Prime Minister Shinzo Abe (R) speaking as former Kenyan President Uhuru Kenyatta (L) looks on during a press conference to wrap up the Sixth Tokyo International Conference on African Development (Ticad VI) in Nairobi, Kenya, 28 August 2016. (Photo: EPA / Dai Kurokawa)

The indications are that the bloated Tokyo International Conference on African Development (Ticad) summits are past their sell-by date as far as the Japanese government is concerned. Ticad has so far failed to realise the expected Japanese private sector investments in Africa.

As the 30th anniversary of the Tokyo International Conference on African Development (Ticad) approaches, observers of this flagship for Japan’s relations with Africa have raised questions about its relevance and future direction.

In a commentary published on 22 June 2022 in the Japanese newspaper Nihon Keizai Shinbun, Satoshi Shimoda, a senior staff writer of the broadsheet intimated that certain senior Japanese government officials are desperate to see the end of the Ticad and hope it will cease to exist by 2028, when Ticad X is expected to be convened.

In the context of the impending Ticad VIII in Tunis, Tunisia, on 27 and 28 August 2022, questions have been raised about what the forum has achieved since its inception in 1993. Professor Keiichi Shirato of Ritsumeikan University has suggested that the summit would do well to use the occasion to assess Japan’s failed promises to increase Japanese investments in Africa.

Following the end of the Cold War, Japan boldly deviated from its hitherto stagnant relations with African countries, embracing what was posited as more proactive relations with Africa that would involve comprehensive economic development packages to help advance the economies in the region.

In assuming such a position, Japan rhetorically distanced itself from the pervading discourses at the time about donor aid fatigue in relation to Africa, a point the Japanese Ministry of Foreign Affairs (Mofa) noted as the trigger for the Ticad process, the first of the recent trend towards multilateral arrangements between Africa and the major economies, including China’s Forum on China Africa Cooperation (Focac).

Although the Japanese government orchestrates and single-handedly funds and manages the Ticad, the initiative is in principle co-organised with the United Nations, the World Bank, the United Nations Development Programme, the African Union Commission and other relevant partners. This arrangement was articulated to preempt potential external criticism against Japan as attempting to encroach on the interests of Africa’s traditional partners, the sort of opprobrium China has experienced in its recent relations with Africa.

Procedurally, since 1993 the Ticad was held once every five years in Japan, but this changed following the fifth summit in 2013, when it was agreed that the summits would be held every three years. This was due to pressure on Mofa from the African countries to lessen the gap between the summits to mirror those of the Focac, which meets every three years.

Rotating the venue of the summits between Japan and the African countries, as was the practice with Focac, was also incorporated into the Ticad process. Consequently, Ticad VI, the first to be held in Africa, was convened in Nairobi, Kenya, in 2016, and Ticad VIII will be held this year in Tunis.  

Since 2011, the summits have been interspersed with interministerial meetings which are convened to review progress on decisions and agreements made at the previous summit meeting.

According to Mofa, Ticad VI in 2016 attracted 11,000 attendees, including representatives (presidents, prime ministers, foreign ministers etc) of 53 African countries, as well as representatives of development partner countries and Asian countries, international and regional organisations, the private sector, and nongovernmental organisations (NGOs).

Ticad VII in 2019 attracted 53 leaders of 42 African countries, and drew more than 10,000 attendees, including representatives of 52 countries outside Africa (Europe, the United States and Asia), representatives of 108 international and regional organisations, and representatives of the private sector and NGOs.

The indications now are that the bloated Ticad summits are past their sell-by date as far as the Japanese government is concerned. Ticad VIII is planning to heavily trim down the number of attendees by confining side events to online. It is estimated that 100 corporate and start-up entrepreneurs will be invited to the event, but according to Shirato, it is not clear how many African leaders will attend, reflecting uncertainties even among the latter about the usefulness of the Ticad, not least because it has so far failed to engender the expected Japanese private sector investments in Africa.

According to Shimoda, the problem is that the script for the Japanese government’s plan to transform Japan’s relations with the African countries from an aid-based initiative to a private sector-led development through Ticad is yet to be drafted. In other words, the whole exercise is like making a movie without a script.

Indeed, although Japan is the third largest economy in the world, it is not among the top 10 countries with the largest foreign direct investment (FDI) stocks in Africa, according to the 2022 World Investment Report of the United Nations Conference on Trade and Development.

The balance of Japan’s FDI in Africa, which stood at approximately $12-billion at the end of 2013, has continued to decline, and had fallen to about $4.8-billion at the end of 2020, compared to $65-billion from the UK, $60-billion from France, $49-billion from the Netherlands, $48-billion from the US, and $43-billion from China.

Japan’s FDI stocks in Africa even pale in comparison to those of Singapore and Switzerland, at $21-billion and $17-billion respectively.

According to a survey conducted by the Singapore-based Asia Africa Investment and Consulting Pte Ltd, there are about 500 Japanese companies operating in Africa, compared to about 2,500 Chinese companies, 2,000 US companies, and 1,100 French companies.

Inspired by these indicators, Shimoda has used a rather colourful euphemism to describe Japan’s private sector-led initiative through Ticad as no more than a chic picture of a Japanese rice cake (omochi), the point being that no matter how delicious the cake may look in the picture, it is not edible.

The problem is that since its inception in the early 1990s, the Ticad has been micromanaged by Mofa. The Ticad was the brainchild of senior officials of the foreign ministry, but more importantly, Japan’s prominent economic ministries, the Ministry of International Trade and Industries (now the Ministry of Economy, Trade and Industries) and the Ministry of Finance, were not particularly involved in the planning and organisation of the platform.

This calls into question the development objectives and content of the Ticad, as the economic ministries are germane to whatever arrangements the Japanese government makes regarding economic development. 

Secondly, and in relation to the point above, Mofa designed the Ticad as an advisory platform for Africa’s economic development that would not be supported by financial pledges from Japan but would instead act as a vehicle through which expert advice and guidance, conceptually and technically, would be given to the African governments.

This deviated from the recognisable formula integral to Japanese aid to the East Asian countries, which involved “comprehensive economic cooperation packages with the trinity of aid, direct investment, and imports from developing countries”, what has been referred to as “the linchpin of Japan’s win-win approach”, designed to contribute to “the aid recipient’s economic development as well as the promotion of Japan’s exports”, according to Professor Yasutami Shimomura.

Consequently, Japanese aid to Africa, even in the context of the Ticad, was, until 2013, largely limited to the provision of humanitarian assistance.

Attempts to transform the Ticad into a business-oriented venture based on the formula above began in 2007, and became more formalised at Ticad IV in 2008. This was because the African economies had been growing since 2000, largely due to the increase in trade with China.

Basically, as perceptions about the economic prospects of the African countries began to shift towards the positive, the attitudes of the Japanese government and the Japanese business community towards the Ticad began to alter correspondingly. Thus, unlike the previous summits, Ticad IV in 2008 was calibrated to encompass action-oriented outcomes, with an emphasis on public-private partnership.

Subsequently, then Prime Minister Shinzo Abe tried to use the forum in the interests of Abenomics, the policies his government devised to redeem Japan from its protracted economic stagnation.

Pressures from the prime minister’s office on the economic ministries and the Japanese private sector might have helped to sensitise these entities about economic prospects in Africa. As such, from about 2013, the Doyukai (Japan Association of Corporate Executives) also made several recommendations to the Japanese government to leverage the Japanese private sector’s involvement in the Ticad.

For example, the Doyukai exhorted the Japanese government to establish multiple development goals and attach timescales and finance to them. In effect, the Japanese business community started to demand more development assistance from the Japanese government towards African countries.

The association was forthright in requesting “that the Japanese government take a more strategic and flexible approach to ODA [Official Development Assistance], to meet the needs of both African countries and Japan’s national interest”. The Doyukai further proposed that “the Japanese government… set forth and implement a focused strategy for Africa oriented around the needs and priorities of the private sector, as a means to encourage companies wishing to set up operations in Africa”, and asked for the Japanese government’s assistance in prioritising the needs of the private sector.

Even the conservative and idiosyncratic Keidanren (Japan Business Federation) – which, metaphorically, would obsessively check a stone bridge to ensure its security and still not cross it – affirmed in a 2018 recommendation that “increased yen loans, grant aid… and Japan Bank for International Cooperation (JBIC) investment and loans as well as relaxed conditions for financing, and increased guarantees through Nippon Export and Investment Insurance (Nexi) will continue to be essential” for the development of Africa.

Despite these initiatives, Japanese private sector involvement in Africa’s economic development has remained sluggish. The Japanese business community would no doubt attribute the problem to the fact that the development assistance they expected as “seed money” for Africa’s economic development has not been forthcoming, despite pledges by the Japanese government at each of the Ticad summits since 2013.

In addition, in a recent survey, the Japan External Trade Organisation pointed out thatwhile business momentum in Africa is growing, concerns about risks remain”, noting that “in terms of management issues, ‘preparation/implementation of legal regulations’ was the biggest risk”. Of the firms the organisation surveyed, “approximately 80%… viewed this as a problem, indicating strong concerns about governance”.

In truth, the African countries have tended to troop to the summits with a shopping list of demands and expectations, and offer almost nothing in return.

Despite the name and the rhetoric surrounding the Ticad as a development initiative, it was conceived by its originator, Ambassador Yoshio Hatano, then Japan’s permanent representative to the United Nations, as a diplomatic lever to raise Japan’s profile on the international stage in order to gain a permanent Security Council seat at the United Nations, the feasibility of which would depend on support from the African countries at the General Assembly. That failed.

The forum was subsequently, inadvertently, rejigged to fit what its name promised, to help propel the development of the African economies. That aim has continued to flounder because the script for the project is yet to be written, according to Shimoda.

In the meantime, some Japanese policymakers feel exasperated by the Ticad. Nevertheless, the Japanese government will hesitate to ditch what has become one of its foreign policy flagships.

There are also bureaucratic forces within the Mofa and its agencies that would fight to keep it plodding along as a diplomatic platform for Japan’s international profile, although the bloated Ticad summits may be much slimmed down, as may the development content of the initiative.

It would not be at all surprising if Japan used the summit this month primarily as a platform to make pronouncements about the war in Ukraine and its implications for the security of East Asia. DM

Kweku Ampiah is Professor of Asia and Africa Studies at the University of Leeds, UK. He is the co-author with Prof Arthur Stockwin of Rethinking Japan: The Politics of Contested Nationalism (Lexington Books, 2019).

 

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