Japan is intensifying efforts to support its private sector in expanding operations across Africa, a region where the country has traditionally been perceived primarily as a donor. This renewed focus aligns with Japan’s broader strategic intent to diversify its global economic partnerships and reduce reliance on China.
Takehiko Matsuo, Vice-Minister for International Affairs at Japan’s Ministry of Economy, Trade and Industry, highlighted this shift during a recent visit to Abidjan, Ivory Coast’s commercial capital. “The mindset of Japanese business leaders has changed dramatically. They are now much more proactive about expanding their business globally,” Matsuo said. “Africa is one of the destinations where we expect Japanese companies to grow their presence.”
Japan’s private sector had previously exhibited caution on overseas ventures, constrained by a domestic economy that endured three decades of deflation. However, the economic landscape is evolving. Recent data show that consumer prices have consistently met or exceeded the Bank of Japan’s 2% inflation target for three consecutive years, encouraging greater risk appetite among Japanese corporations.
This change is mirrored in Japan’s international investment profile. The country’s net external assets reached a record high in 2024, with the United States and the United Kingdom remaining key destinations for foreign direct investment. However, Africa currently receives only about 0.5% of Japan’s foreign direct investments.
The timing of Japan’s renewed engagement is also significant for Africa. With geopolitical shifts, including the return of President Donald Trump to the White House and the subsequent reduction in US aid, mobilising private sector capital has become increasingly critical for the continent. Japan’s efforts could offer mutual benefits. According to research by Goldman Sachs, Africa’s demographic and economic trajectory suggests that by 2050, one in four people globally will be African. By 2075, six of the world’s largest economies may be in the Global South, including Nigeria.
Japan is prioritising strategic sectors such as critical minerals, base metals, and rare earths, all essential to reducing its dependence on Chinese imports. “We are pretty much depending on Chinese companies,” Matsuo noted. “I’m not saying that we cannot work with Chinese companies, but only depending on one country may be causing some vulnerability.”
Evidence of Japan’s commitment is already emerging. Trading conglomerate Mitsui & Co. was the top bidder for a stake in First Quantum Minerals Ltd.’s Zambian copper mines, according to Bloomberg. In parallel, Japanese firms are exploring opportunities in technology-driven services and green innovation. Fujifilm is developing preventive medical care services suitable for regions with limited health insurance coverage. Toyota Tsusho is investigating automotive recycling systems, while Hitachi Construction Machinery is introducing hybrid dump trucks for environmentally friendly mining operations.
Japanese investors are also showing interest in green hydrogen and ammonia, technologies seen as vital to decarbonising industrial sectors.
The Japanese government is fostering broader collaboration through new initiatives, including a programme launched this month to link Japanese and African startups and drive innovation.
In terms of development aid, Japan remains a major contributor. In 2022, it was the third-largest provider of overseas development assistance to sub-Saharan Africa among OECD members, disbursing $1.68 billion in gross aid. Unlike the US or the UK, Japan has not signalled any reduction in its aid commitments.
Matsuo underscored this commitment by highlighting the upcoming Tokyo International Conference on African Development (TICAD), scheduled for August in Yokohama. “This year, we will have the biggest meeting for collaboration between Japan and African countries,” he said. “In that sense, we are rather making efforts to expand our cooperation.”
-Japan Times
