Japan pledges to strengthen African ties through new Indian Ocean economic partnership

Japanese Prime Minister Shigeru Ishiba has called for closer relations between Africa and the countries around the Indian Ocean, promising greater investment in the region.

Speaking on Wednesday at the Indian Ocean-Africa Economic Partnership Forum, held as part of the Tokyo International Conference on African Development (TICAD), Ishiba said the region is “gaining importance” due to its young population and rich natural resources, and that strengthening connectivity within it will bring “even greater growth.”

The forum was organized by Nikkei in conjunction with Japan’s Ministry of Economy, Trade and Industry, and the Ministry of Foreign Affairs.

Ishiba stated that the Indian Ocean-Africa Economic Zone initiative would be part of Japan’s Free and Open Indo-Pacific (FOIP), a foreign diplomacy concept that encourages cooperation among surrounding countries in areas such as security, commerce, and trade. This concept is a mission developed by the US with its regional allies to limit China’s influence in the area.

Ishiba said the Indian Ocean-Africa Economic Zone initiative aims to “strengthen inter-regional connectivity and create a free and fair economic zone.”

He added that Japan would help “strengthen the ties between Africa and Indian Ocean countries.” “We aim to support Africa’s efforts for regional integration and industrial development, ultimately leading to further growth,” he said.

Ishiba noted that Japan would offer more assistance for the development of the Nacala Corridor, a strategic logistics network connecting Zambia in Central Africa with the port of Nacala in Mozambique in East Africa. Tokyo has been supporting this development since 2012.

Landlocked Zambia is a major producer of copper and cobalt, which are vital for the global electrification drive. These metals are mostly shipped from ports in Angola in West Africa, but the Nacala port offers a shorter route for Japan. Tokyo is hopeful about this project given the global competition to secure such metals.

Ishiba said Japan will use an “offer-type” overseas development assistance, which is generally carried out at the request of partner countries, as opposed to traditional ODA.

The infrastructure development in the Nacala Corridor “will promote regional integration while strengthening connections between African countries and countries in the Indian Ocean region,” he said.

Mozambican President Daniel Chapo said his country welcomes investments that strengthen economic integration in the region.

“Mozambique offers numerous investment opportunities, including railway infrastructure, the modernization of cargo handling services in Mozambican ports… [and] regional maritime transport connecting East Africa to Africa, the Middle East to Africa, and Asia to Africa,” he said.

However, Togolese President Faure Gnassingbe warned that any investment in Africa must be mutually beneficial. “Africa cannot limit itself to exporting raw materials. … Our goal is not to be a transit platform,” he said. “We want to transform our resources, have local production, and make our youth actors responsible for production, not consumption,” he stressed.

Other speakers at the forum also praised the growth potential of the Indian Ocean-Africa region.

Toshimitsu Imai, President and CEO of Japanese trading company Toyota Tsusho, said the region will be the center of global growth in the future. “The region is home to 4 billion people. That’s half the world’s population,” he said. The Toyota-affiliated company is heavily focused on Africa.

“Given the population density, the next center of the world will undoubtedly be this region. This is the only region where we will see rapid economic growth,” he added.

Toshinobu Shinoda, executive vice president of Japanese shipping company Mitsui OSK Lines, said that in global maritime transport, the Indian Ocean-Africa region is often just a side note in East-West trade. However, he stated that from now on, “Indian Ocean trade will become the main trade,” adding that some European shipping companies have established a strong presence in Dubai, which has become a major shipping and logistics hub.

“They are putting a lot of effort into African trade. We have an office in London [that oversees Africa], but we may need to think about moving that office elsewhere,” Shinoda said.

Kevin Chika Urama, chief economist at the African Development Bank, said that in his 35-year professional life, he has “never been more optimistic about the continent’s growth potential.”

Despite conflicts, trade wars, and epidemics like COVID-19 and Ebola, “Africa’s growth has maintained an average of 4% over the last 20 years, and more than 20 African countries have recorded stable growth of over 5% in GDP growth,” he said.

“Smart investors are investing in Africa. … This is not a temporary event in history,” he added.