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The 4th in 2024 of AFRI CONVERSE, a dialogue series, geared toward the Tokyo International Conference on African Development (TICAD), took place in December. Aimed to provide a practical platform for exploring business opportunities in Africa, this event brought together over 243 participants. Individuals actively engaged in Africa from a business perspective, such as entrepreneurs, investors, corporate representatives, and scholars, took the stage. By sharing their successful case studies and strategies for overcoming challenges, the event highlighted real-world examples of entrepreneurship and market entry. It empowered participants, especially Japanese companies, to take their “first step” into the African market by bridging physical, psychological, and historical divides.
The seminar opened with a lecture by Dr. Masahiro Okada, Professor of Strategy of the Graduate School of Business at Keio University, who shared three key points of concern regarding the theme of the event, "The First Step into Africa: Igniting Opportunities for a Prosperous Future":
- Japanese firms have significant opportunities to engage more actively in Africa and should pursue this potential.
- Reasons behind the lack of awareness and hesitation among Japanese companies to enter the African market.
- Need for Japanese companies to adopt a more risk-taking mentality, as greater willingness to take risks is crucial for advancing into the African market.
Dr. Okada pointed out while Africa’s strong economic growth with many countries exceeding the global average growth rate of 3.8%, Japan’s foreign direct investment (FDI) in Africa remains limited, amounting to just $ 8.7 million in 2017, less than one-seventh of France’s and half of India’s. Dr. Okada emphasized that this disproportionately low FDI, provided Japan’s high GDP, reflects untapped opportunities for growth and investment in the region.
He also attributed Japanese companies’ reluctance to invest in Africa may stem from their risk-averse nature, with Japanese firms ranking lowest in return on assets (ROA) among the 27 countries and ranked 26th in risk-taking. This aversion, shaped by national, corporate, and individual managerial factors, is reflected in an exceptionally high uncertainty avoidance index of 88, far abovethe global average of 55.
To address this issue, Dr. Okada proposed two potential solutions:
- Encouraging entrepreneurs eager to engage in business ventures in Africa.
- Educating decision-makers in large Japanese corporations to foster interest in the African market and improve their risk tolerance.
Subsequently, Mr. Shuhei Ueno, Deputy Director General of the African Department at JICA, opened the panel discussion by explaining the context of the event’s theme. He highlighted the critical need for greater private sector involvement, both within Africa and from external stakeholders. He introduced Professor Okada's paper that if many employees are involved in Africa in some way, whether it is through travel as a student or training as an employee, the company will be more likely to make a decision to go into Africa. He hoped that today's seminar would encourage many people to take “a step” into Africa, and that this would lead to the expansion of Japanese companies into Africa.
Ms. Olatokunbo Ige, the Founder and Executive Director of Afrika Nunya, emphasized the "uniqueness" of the African market, characterized by the immense diversity across its 54 countries, each offering distinctive opportunities shaped by varying stages of development and varied geographical landscape. She highlighted Africa’s rapidly growing young population, projected to comprise a quarter of the global population, its untapped natural resources ranging from oil and gas to rare earth minerals, and its capacity for rapid technological adaptation, evidenced by the rise of multiple unicorn companies.
She also pointed out Africa’s growing influence in global governance, describing the continent as a formidable force in global politics and economics. She advocated the regional opportunities and collaboration through intergenerational and cross-cultural dynamics to unlock the continent's full potential.
Ms. Mukahirwa Delphine, a Software Developer at Rexvirt Communications Inc., and an alumni of ABE initiative (African Business Education Initiative for Youth), outlined Africa's vast opportunities for Japanese companies, extending beyond youth-focused products. She encouraged Japanese businesses to overcome hesitation about entering Africa, noting the adaptability and receptiveness of its people, and mentioned that local business can help tailor Japanese products to meet local needs. Ms. Delphine also highlighted co-creation as a significant benefit for Japanese companies in Africa. She addressed that while the business landscape may lack immediate partners or markets, this opens opportunities to establish a foothold, apply Japan’s technological strengths, and work with local businesses to create innovative solutions. She added that Japan’s infrastructure and financial resources can support Africa’s creative ideas, enabling shared progress. She concluded by encouraging Japanese companies to explore Africa’s latent potential through strategic collaboration, adding that with the right approach, companies can find countless opportunities and long-term benefits.
Mr. Tomihisa Shirakawa, the Deputy General Manager of Financial Institutions Department at Sumitomo Mitsui Trust Bank, Limited, in his presentation, discussed challenges in Kenya identified through the Keio EMBA project: the increased demand for housing due to rapid population growth; underdeveloped public transportation and means of commuting to work. He introduced a business plan leveraging security token as a new funding option aimed to address these issues. The concept involves downsizing real and movable property and selling them to investors through digital securities. His findings during his visits to Africa include 1) intense urbanization progress in the local area, with 90% of the housing available for rent, 2) high interest rates on bank loans, which have led to a preference for cash on hand, asset sales, and advances over bank loans, and 3) little positive stance on blockchain technology.
Mr. Yuto Doya, the Founder of NPO CLOUDY/ CEO of DOYA Co., Ltd., reflected on Africa’s cultural richness and business potential, sharing his experiences addressing real-world challenges like poverty, education gaps, and gender inequality. He explained that his business ideas are inspired by the insights he gained from addressing pressing challenges faced by local communities in Africa. Mr. Doya highlighted his NPO’s initiatives, including the creation of self-sustainable public schools in partnership with local governments and communities, integrating agricultural activities to foster local ownership. He also introduced a program empowering women by training them in African fabric production, equipping them with skills for self-reliance and stable employment. Mr. Doya concluded by emphasizing the importance of solving fundamental problems through collaborative, sustainable solutions and encouraged attendees to experience Africa firsthand, noting the profound lessons of the value of community, happiness in simplicity, and shared joy.
Dr. Masahiro Okada, Professor of Strategy, Graduate School of Business, Keio University, delivered the presentation on his expectation on teaching business strategies for Africa as part of his EMBA course, and his way to promote the “first step”. Highlighting the challenges and potential opportunities, Dr. Okada shared data revealing that three-fourths of respondents in a recent survey were reluctant to engage in business in Africa. He noted that many companies often cite the external factors as barriers to entry but emphasized that such challenges can only be addressed by firsthand experience in Africa. Dr. Okada expressed hope for increased participation by Japanese companies in taking the “first step” into the continent. Regarding the format of Africa visits in the curriculum of Dr. Okada’s course, Mr. Shirakawa explained that participation is an elective, but about half of the students enthusiastically chose to join.
In addition to these discussions, Ms. Delphine and Ms. Olatokunbo shared complementary insights into potential business collaborations between Africa and Japan. Ms. Delphine emphasized the importance of fostering positive working environments and bridging cultural and linguistic gaps, such as learning English, to ensure successful engagement. Ms. Olatokunbo highlighted the need for adaptability and encouraged finding common ground between Japan and Africa. She expressed optimism about young Japanese engineers collaborating with African counterparts to innovate and create new opportunities.
During the Q&A session, concerns were raised about the potential for foreign entrepreneurs in Africa to contribute to neo-colonialism. Dr. Okada acknowledged the historical sensitivity of the issue but highlighted that modern African nations recognize the value of foreign investment for economic growth in Africa. Mr. Doya added that businesses must consider social impact, such as supporting the local community, and collaborating with governments to create inclusive solutions. Dr. Okada addressed the feasibility of franchising to mitigate risks when entering African markets, pointing out that franchising could be an effective approach, providing a lower-risk pathway for companies to expand.
Regarding Japan’s approach to business risks compared to other G7 countries, Dr. Okada explained that Japan’s cautious stance can be attributed to its historical reliance on high-growth, low-risk economic strategies, a mindset that became particularly entrenched following the 2008 financial crisis. He also noted that cultural factors likely contribute, as there is a strong preference in Japan for avoiding unnecessary risks.
In his closing remarks, Mr. Shuhei Ueno emphasized JICA and UNDP’s commitment to leveraging the lessons from this seminar to inform discussions at TICAD 9 to be organized in August 2025.
The event highlighted the essential role of collaboration, adaptability, and cultural understanding in building successful business partnerships between Japan and Africa.
