Today almost four hundred and fifty Japanese companies are doing business across Africa. Many companies (including Japanese automotive leaders Toyota and Nissan) are managing their operations from the continent’s most industrialized and diversified economy – South Africa.
“There are one hundred and sixty Japanese companies operating in South Africa and most cover the African continent from here,” says H.E. Norio Maruyama, Japan’s Ambassador to South Africa.
“As South Africa focuses on remaining competitive as a nation, companies are looking to Japanese manufacturers to create employment opportunities and develop employee-skills.”
Japanese companies have already created an estimated 150,000 jobs in the ‘Rainbow Nation’. In a recent study conducted by JETRO Johannesburg, South Africa was identified as the most important country in Africa for Japanese investment. Over sixty percent of Japanese companies in South Africa reported a 2018 surplus operating profit. In addition, increasing sales and revenue led to fifty three percent of companies reporting short-term export expansion plans.
“With a population of nearly fifty million, the sheer size of the market represents tremendous opportunities and is one of the main attributes of doing business here,” said Hiroyuki Nemoto, Executive Director of JETRO Africa Region.
“Respondents to our survey identified communications, sufficient infrastructure and the ability to utilize the country as a gateway to the rest of the continent as the main advantages of doing business in South Africa.”
The fifty-five members of the African Union share a combined gross domestic product of US$ 2.19 trillion and the Union’s population of 1.3 billion is expected to double by 2050.
Tokyo International Conference on African Development (TICAD)
While major economies such as the United States, the United Kingdom and France lead the way in terms of African investment, Japan is increasing its engagement with Africa through the Tokyo International Conference on African Development (TICAD). Initiated by the Japanese government in 1993, today sees the final day of TICAD7 (the seventh conference) in Yokohama, Japan.
“Seventy memorandum of understandings were signed between Japanese companies and African countries following the 2016 Conference held in Nairobi – the first TICAD to take place in Africa,” said Nemoto.
Driving Japan-Africa exchange
The ‘Japan-Africa Public-Private Economic Forum’ held in May 2018 in Johannesburg, South Africa attracted 2,000 attendees and included 100 Japanese and 400 African companies. The Forum led to the signing of sixteen pan-Africa memorandum of understandings.
In May of this year, the third Japan-South Africa Business Dialogue was held in Johannesburg and last month saw the ‘Japan-South Africa CEO Business Roundtable’.
“Through continued initiatives we anticipate more companies will come to South Africa to establish relationships and do business,” said Nemoto. “We want to see the business environment improve here and encourage more Japanese companies to invest in South Africa.”
South Africa’s president, Cyril Ramaphosa, has initiated a drive to attract US$100 billion worth of investments into the South African economy over the next five years. Since elected into office in February 2018, Ramaphosa has made inroads into Japan; he attended the G20 Summit in Osaka, Japan and concluded his visit by participating in the ‘Japan-South Africa CEO Business Roundtable’.
“There are many areas for cooperation including the global ‘Industry 4.0’ initiative focusing on ‘big data’ and artificial intelligence,” explained Maruyama.
“This is a priority for South Africa, as mentioned in President Ramaphosa’s ‘State of the Nation’ address last February. As Ambassador, I want to strengthen ties between Japan and South Africa as politically, culturally and economically this year has been exceptional. People-to-people exchanges will continue to bring our two countries closer together and I am confident the business climate in South Africa will continue to improve and attract even more Japanese investment.”