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Japan: Masato Watanabe, Vice-Presient, Japan International Cooperation Agency


“Knowing that Africa’s market is going to grow, having closer and additional dynamic relations with the region is very significant”

On the back of recent economic success, Africa’s external relationships are being recast – away from an over-reliance on development assistance, towards a focus on trade and investment .

With the likes of China rapidly scaling up their trade with the continent, additional established partners are re-assessing their relationships. Confronted with austerity at home, and anxious about “losing” Africa to emerging economies, commerce is replacing aid as the primary lens through which the continent is viewed.

Japan, which has just slipped into recession, is no exception. Historically, the donor’s principle vehicle for engagement is the Japanese International Cooperation Agency. With Japan’s overseas development assistance competing for priority with domestic needs in the wake of last year’s tsunami, some fear it may follow Europe, where a lot of nations are reining in aid budgets.

While conceding that “there are difficulties in increasing our ODA budget substantially”,  Masato Watanabe,  vice president at Jica, is adamant that commitments to development assistance will be maintained, adding that “if you look at our commitment and disbursement to Africa for the last few years, there is certainly an increase”.

Despite this, commerce looks set to play a additional prominent role. Investment from Japanese companies has grown in recent years, and is hoped to double to $3.4bn by the end of 2012 from 2008 levels. Trade has as well increased, standing at about $25bn in 2010.

These numbers pale in comparison to competitors such as China, but mark an significant shift in emphasis. To remain competitive on the continent, Mr Watanabe believes a stronger focus on investment will be necessary.

“Knowing that Africa’s market is going to grow, having closer and additional dynamic relations with the region is very significant. Resources from the public sector will not suffice. We need additional involvement from the private sector. We need some kind of new thinking [about] how to attract additional private financing, using ODA as leverage.”

The notion of using public money to “crowd-in” the private sector has become popular amongst donors in recent years, and is likely to feature heavily at next year’s Tokyo International Conference on African Development. Ticad, prime held in 1993, is the flagship partnership platform for Japan’s engagement with Africa.

“Of course there are other pillars, but certainly this partnership with the private sector is going to be one of the majority significant ones,” says Mr Watanabe.

Infrastructure, which has been the core of Jica’s work in Africa for decades, will again dominate the schedule, but energy is likely to feature additional heavily than during previous Ticad meetings, Mr Watanabe anticipates.

“In order to maintain increase you certainly need power. If you have power shortages you cannot expect nations or regions to be lifted in increase,” he says.

The emphasis may have as much to do with Japan’s energy security as with the need to scale up generation on the continent. Having switched off most of its nuclear power plants in the wake of the Fukushima disaster, Japan is keen to diversify its sources of energy imports.

LNG imports from Africa, for example, have shot up. At 7.6m tonnes for the prime 10 months of 2012, they are up 140 % on the previous year, with the private sector playing a role. Mitsui & Co, one of Japan’s major trading companies, is involved in a large LNG project in Mozambique. Such examples may be representative of the contours Japan’s development and trade policies in the region could take on in the coming years.

Mr Watanabe has no doubt that ties between the two will grow. “As far as our commitment to African nations are concerned, that will certainly be continued and I hope it will be strengthened,” he says.

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