Summit explores Japan’s role in developing Africa’s ‘great economic potential’

The fourth Japan Summit, hosted by Brand South Africa in Sandton this week, highlighted the importance of trade between South Africa and Japan and the wealth of opportunities for businesses to drive growth in both countries.

Rosemary Padi is a homegrown entrepreneur hoping to expand her proudly South African company into Japan. (Image: Yamama Gemmer)

Brand South Africa reporter

Yamama Gemmer is a proudly South African company that produces a healthy ginger-based juice. Entrepreneur Rosemary Padi’s business has been built on a recipe passed down from her mother. Yamama Gemmer is what Saburo Yuzawa refers to as a “one-and-only product”.

Yuzawa is managing director and chief editor of the World Economic Review, published by Japan’s Institute for International Trade and Investment. He was speaking at the fourth Japan Summit held at the Sandton Convention Centre in Johannesburg on 31 January. The event, hosted by Brand South Africa and the Japan External Trade Organisation, or Jetro, brought together a range of speakers to discuss opportunities for Japanese and South African companies to do business with each other.

“South Africa has many ethnicities and cultures,” Yuzawa said. “Each ethnicity has its own uniqueness. A unique value that can be marketed.” He explained that this uniqueness allowed South African companies to develop “one-and-only” products.

Yunus Hoosen, head of the Department of Trade and Industry’s Invest SA initiative, told delegates that Japan is South Africa’s fifth-largest import partner (valued at R39.8-billion), and sixth-largest export partner (R50.9-billion). The DTI has a Japanese desk to help South African and Japanese companies access each other’s markets.

Hoosen’s talk centred on the establishment of the Invest SA One Stop Shop. Although we do well in global business rankings, he said, we “score poorly on ease of doing business. Our One Stop Shop will help companies navigate permits, licences, and the red tape new investors face.”

Growing trade ties between Africa and Asia

As global economic dynamics shift, Hoosen suggested, Africa’s one billion people will become a major market for Japan. The Asian country will in turn become even more important for African companies. There are a diverse range of opportunities for investment and technology exchanges, such as in petrochemicals, electronics, green and renewable industries, and e-commerce.

Shigeyuki Hiroki, Japan’s ambassador to South Africa, said our country remained an attractive investment destination for Japanese corporations. In the last 12 months they have invested R36-billion in South Africa, creating 150 000 jobs. Our infrastructure and talent, Hiroki said, made South Africa a perfect base for Japanese companies eager to invest into Africa.

Powering Africa

In his keynote address Eskom chairman Dr Ben Ngubane said Eskom’s growth, and success, meant economic growth for sub-Saharan Africa. “A reliable high-voltage superhighway grid through Africa is Eskom’s dream.”

The current fact of 632-million Africans without access to electricity was a drag on the continent’s economic growth, Ngubane said. But Eskom’s build programme added a  further 3105 megawatts to South Africa’s grid in just the last six months. This has allowed the utility to increase cross border sales by 25%. The increased capacity will benefit not only the South African economy but those of our neighbours and the broader regional economy.

For Ngubane, Japan’s role in Africa is unambiguous: it needs to be a source of funding and expertise. “Funding is necessary. Especially from investors who understand that benefits will come over the long term.”

Learning from the Japanese Miracle

Dr Danisa Baloyi, president of the Black Business Council, expanded on this point by highlighting the opportunity that a Japanese-South African trade relationship offers South African entrepreneurs. The Japanese Miracle – its rise from the ashes of defeat in World War Two to become an industrial powerhouse – was built on innovation and the nurturing of small and medium-sized companies.

“SMEs can benefit from this relationship,” Baloyi said. “Japanese companies can help with skills development. We encourage entrepreneurs and Japanese business to build alliances.”

The Japan External Trade Organisation holds trade fairs and exhibitions across Africa to encourage businesses – especially small businesses – to do business with Japan. (Image: Jetro)

The Japanese Miracle was built on government policies that were not simply export-driven. Very early on the Japanese government encouraged the import of American technology, not just finished goods. They understood that technology, not their limited raw materials, would become the basis of economic development.

Post-war Japanese governments also made it easier for small business to operate by offering them financial help, incentives to build products for export, and extending offers of mentorship and help for SME management and owners.

Japan offers South African and African businesses expertise and markets, while Japanese companies see Africa as a market with unlimited potential. It is vital that this relationship is built on and strengthened. Jetro exists to ensure that this is exactly what happens.

As Takashi Yao, of the Marubeni Corporation, explained during his closing remarks: “We provide opportunities for our members and South African businesses. Our aim is to develop Africa’s great potential. To work towards our mutual goal of development.”

He used a Japanese proverb to explain how Jetro sees the relationship between South Africa and Japan: Onaji tekki kara taberu – “Eating from the same iron pot”. He was expressing the idea that there is strength and community between South Africa, Africa and Japan because we are all working toward the same goal – prosperity and economic growth.

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