The scramble by major economies for influence in Africa is understandable.
TOKYO: Japan’s flagship Tokyo International Conference on African Development (TICAD) was held on 28-30 August, amidst a widely perceived scramble for influence and resources in Africa from the world’s major powers, the United States, China, Russia, European countries. This year’s was the seventh TICAD, which started in 1993. The scramble by major economies for influence and investment in Africa is understandable. Africa produces 90% of the world’s cobalt and platinum, 50% of gold, 98% of chromium, 70% of tantalite, 64% of manganese and 30% of uranium. The Democratic Republic of the Congo (DRC) alone has 70% of the world’s columbite-tantalite or coltan, which is used in almost all cell phones and laptops. Africa is the main source of diamonds, with Surat in Gujarat having replaced Antwerp, Belgium as the diamond cutting/polishing hub of the world. There are estimated to be more oil reserves in Africa than in North America.
Opening the conference, Japan’s Prime Minister Shinzo Abe, a strong proponent for upgrading ties with Africa, spoke of advancing Africa’s development through people, technology and innovation. PM Abe stated that the Japanese private sector had invested $20 billion into Africa over the past three years and said his government would do everything to promote and encourage much more private investment. There were rumblings within the commentariat that $30 billion had been pledged at the TICAD 6, held in Nairobi, and some also wondered if even $20 billion had been accomplished since they claimed the methodology was chosen deliberately to enhance the actual net investment statistics.
Belatedly, Japanese industry leaders are realising that Africa is no longer the “basket case” once portrayed in the philanthropic activities of musicians Sir Bob Geldof, Michael Jackson and Bono, but rather a genuine partner for industrial growth for Japan itself. From the Abe administration, there is an effort to not just focus on Japanese aid, but rather trade and investment with the private sector expected to lead the way. However, apart from a handful of companies, the message has not got through to the mid-level managers that Africa is a favoured location for investment. Even today, those managers in some of the most prominent Japanese companies believe that their proposals for investment into Africa will be shot down by the grey eminences in the corporate management offices and boards, despite many Japanese companies sitting on hoards of retained earnings cash.
India has had long-standing links with Africa that started well before any African country got independence. India’s post-Independence leaders all strongly supported African decolonisation and anti-apartheid struggles, diplomatically and materially. Thousands of Africans now in key positions (cohorts have also retired) had earlier got Indian government scholarships to study in India. Also, Indian peacekeepers have been part of all UN peacekeeping missions in Africa and India today is among the largest contributors of troops to those missions.
Further, various Indian ethnic groups were part of African local communities especially on trade, being major minority populations in South Africa and Eastern Africa. I myself lived in West Africa for 5 years and went to school there when my late father, a Berkeley PhD, who died in Accra, served in the UN on deputation from the Indian government’s statistical service. My closest childhood friends in Ghana, apart from Ghanaians, were Sindhis whose families originate from the border region of India and Pakistan. Sindhis managed to manoeuvre in between multiple disadvantages created by colonial malpractices, finding opportunity in adversity, and became a successful transnational business and trading community, even helping Japanese textile businesses to manage and overcome quotas and boycotts against Japanese textiles imposed by colonial powers in the early 20th century. Similarly, today, India can offer and build on its historical linkages with Africa across the Indo-Pacific.
Two larger Japanese companies that are making real efforts and inroads are FujiFilm, that is manufacturing advanced imaging and other diagnostic equipment designed especially for field care, and Toyota Tsusho, which has been active in Africa for 90 years, and focuses on automotive sales, service, and recently also acquired a French trading company, CFAO, in order to develop markets in French-speaking Africa.
China’s Commerce Ministry claims that it has replaced the US as Africa’s largest trading partner with $204 billion in trade. This is in sharp contrast with Japan’s relatively small exports to Africa of $7.8 billion and imports of $8.7 billion, according to academic sources. Some TICAD delegates informally mentioned how much larger the facilities are in China’s Forum on China-Africa Cooperation (FOCAC), China’s TICAD-equivalent conference, and that the Chinese can think of basic logistical requirements, including providing buses from the airport and hotels, food and soft drinks at the meeting and event venues. In contrast, some Japanese official had even written on TICAD documents that no food and drinks should be offered at the venue in special events. Thus, apart from Presidents, Prime Ministers, Ministers and other dignitaries, some delegates had no opportunity to experience the rich diversity of African cuisine and coffee, or indeed the exquisiteness of Japanese cuisine. In the exhibition area, each country stall was tiny by the standards at expos I have seen since early days, including in Africa, and the time allotted to country presentations too was inadequate—ministers were given 10 minutes to explain, which is hardly sufficient. So much may have to change to make it a vibrant experience that can compete with the increasing number of similar events. In October, Russia is holding its event for Africa. Surely, India’s Bollywood-linked ability to create instant excitement may help invigorate the TICAD.
More than 3,700 Chinese firms are located in Africa, with about 1 million Chinese citizens now reportedly living there. In comparison, only 800 Japanese firms have offices in Africa, and just around 8,000 Japanese citizens live in Africa. This is an additional reason why it makes sense for Japan to build broader coalitions with India and the US, to achieve synergistic growth.
Today, it is China and the US that are the most influential countries in Africa. Japan is attempting to catch up, has long-standing links and sees India as an important ally in this outreach to Africa. China has been involved in Africa, even militarily, since the 1960s. China was on the losing side in the Angolan Civil War, having provided weapons to Dr Jonas Savimbi’s UNITA guerilla movement that was also supported by the US Central Intelligence Agency, and the South African Apartheid regime, but China did a deft two-step to emerge later on the ruling MPLA party side, even building an entire city with thousands of apartments in high-rise buildings near Luanda in exchange for oil, and China imports over 50% of Angola’s oil exports. Further, with great strategy and determination, China has been taking equity stakes in resource-rich African countries at great speed. It is said to have a near-monopoly on some minerals in Africa. China imports $100 billion worth of base metals, and therefore bought the equity stakes of exiting North American mining companies, giving it a near-monopoly over uranium ore in one country, and iron ore in another. Further, China is cleverly using its debt strategy, where it charges fairly high interest rates that the developing country often cannot service, and then does a debt-equity swap to take control of the physical asset, whether it is a port or mine. That is what some refer to as a debt-trap, which naturally irritates the Chinese who claim that the countries borrow knowingly and it is not the fault of the Chinese that the countries are unable to pay on time. Most other countries are far behind and much slower in implementation/execution of any investment strategy. “Democracy” is blamed for the tardy implementation by others, but in reality it is the single-mindedness of the Chinese, ravenous appetite for minerals after decades of manufacturing for the US, Europe, Japan and global supply chains and their great access to financial capital that has been a difference. And China also has an openly articulated strategy to replace the US as the leading economic power in this century, a goal that US President Donald Trump is trying frantically to thwart.
TICAD was held every five years from 1993 until its fifth session in 2013 in Yokohama, a large city on the outskirts of Tokyo and part of the greater Tokyo metropolitan area. Since then, it has occurred every three years, with the first event on the African continent taking place in Nairobi, Kenya, in 2016. Since it is an event organised by Japan with the African Union (AU) and international agencies, certain issues of membership always crop up. There are 55 member nations of the AU, but the Saharawi Republic, a member of the AU, is not invited by Japan as Japan does not recognise that last element of decolonisation in Africa. Nevertheless, as an AU member, the leaders of the Saharawi Republic or POLISARIO Front do attend TICAD. Since the Western Sahara territory was taken over by Morocco when the colonial power, Spain, departed, many countries including Nigeria, Ethiopia and Namibia recognise, and others including Egypt and Sudan do not recognise that government-in-exile. The Rajiv Gandhi government had recognised the Saharawi Republic, as part of its consistently strong support for African decolonisation, but the Atal Bihari Vajpayee government de-recognised it, the only case of its kind in Indian diplomatic history. Apart from promised support by Morocco for India with Islamic countries, access to Moroccan and Western Saharan phosphates (70% of world reserves) for a fertilizer joint venture with Morocco that the late K.K. Birla created, who was a close personal friend of then-PM Vajpayee, are reported to have been factors in that decision.
TICAD’s Yokohama Declaration and Yokohama Plan of Action are written in old-style bureaucratese by government officials mostly steeped in internal processes, therefore inimical to the much-hyped innovation in PM Abe’s and African leaders’ speeches. Many priorities are outlined, including universal health coverage, massive training programmes in diverse sectors, and launch of a Japan Business Council for Africa.
Competing on dollar figures in “investment” has no meaning at this point. In fact, overemphasised inclination in “investing in efficient sector” may create “haves” and have nots” class divisiveness in Africa’s future. When you visit Japan, it is clear that its massive middle-class has relatively equal access to education, health, social services, quality infrastructure, senior care, and job opportunities created in each segment of professions called “shikaku” system in which private training schools flourish, something that China, Korea, India and other growing Asian powers are still aspiring to achieve. Japan has repeatedly stated the need for “quality infrastructure”—behind this word, there are numerous skilled jobs. It is very different from China’s Belt and Road Initiative (BRI). The important goal here is “development”, and therefore Japan’s potential contribution to Africa is very strong in this aspect. This undoubtedly will mitigate conflict in society, and create stability and set the path for stable economic growth.
Next month, at the United Nations General Assembly, PM Abe is expected to make a major pledge of nearly $9 billion for health, disaster reduction and education, according to sources.
One political reason why Japan does a great deal of outreach to Africa is because of the 54 votes Africa has at the UN. However, because of the historical tensions between China and Japan, China will veto any attempt by Japan to secure a permanent veto-bearing seat in the US Security Council—one more reason to reformulate the way TICAD has been organised.
Africa’s growth is India’s growth, and optimising India’s multiple assets built with the historical engagement in and links to Africa, Indo-Pacific cooperation will undoubtedly go far.
Dr Sunil Chacko holds degrees in Medicine (Kerala University), public health (Harvard) and an MBA (Columbia). He delivered babies even in candle-light in an early version of universal health coverage, then as a young physician. He served in the Executive Office of the World Bank Group and won a commendation from the then-World Bank President for his innovation. He has been an adjunct faculty member and entrepreneur in the US, Canada, Japan and India.