In connection with the Tokyo International Conference on African Development, Japanese cumulative FDI in Africa increased from $3.9bn in 2007 to $10bn in 2016.
The big challenge will be diversifying the range of the country’s trade partners in Africa beyond the handful of countries that currently dominate Japanese trade relations with the continent – South Africa, Morocco, Kenya, Egypt, Ghana and Nigeria.
The two biggest sectors for Japanese investment in Africa are mining and hydrocarbons, particularly in Mozambique, where Mitsui & Co has invested billions of yen in coal and gas projects.
There has been a succession of big agribusiness investments by Japanese companies in Africa over the past few years, often by buying stakes in established operators. They have been attracted by Africa’s increasing population and particularly the growing number of middle class people.
In 2015, Mitsubishi bought a 20% stake in agri-trader Olam International. Japan’s Sanyo Foods took a 25.5% stake in Olam’s instant noodles business in 2013, then 25% equity in Olam’s packaged foods business for $187.5m the following year. Its packaged foods operations cover a wide range of goods, including fruit juices, biscuits, tomato puree and seasonings. The two companies are seeking to make use of their respective distribution networks.