Japan Strengthens Africa Ties with Nigeria Focus

Japan Partners with Nigeria

“We are partnering with businesses in Africa because it makes us happy a...”

Nigeria Selected as Japan's Key African Partner: Boosting Economic Cooperation and Trade through Bilateral Agreements.

The African Diaspora Network Japan (ADNJ) has pinpointed Nigeria as a strategic location for bolstering economic relationships between Japan and Africa. At the 2024 Osaka-Africa Business Forum held in Osaka, Japan on October 25, ADNJ leaders and speakers underscored Nigeria's potential as a prime entry point for companies seeking to tap into the African market.

During the “Let's Walk with Africa” summit, ADNJ encouraged Japanese businesses to leverage the African Continental Free Trade Area (AfCFTA) to establish a presence in Africa. By harnessing this vast market, Japanese companies can unlock new opportunities for growth and collaboration.

Nose Yukio, a small and medium enterprises advisor, highlighted Africa's vast market potential in her keynote address, citing the continent's rapidly growing population and abundant natural resources. “The African continent will make up a quarter of the global population by 2050,” she emphasized, underscoring the immense opportunities for businesses. Yukio noted that Africa's relatively untapped market presents a prime opportunity for new ventures to establish themselves.

Yukio advised attendees to explore untapped markets, particularly in Lagos, Nigeria, which is strategically located and boasts a large and growing population. To effectively navigate the African market, Yukio suggested dividing the continent into regions. For North Africa, she recommended Egypt as a prime destination due to its proximity to Europe via the Suez Canal, facilitating logistics and trade.

Some of the highlights of Nigeria's market potential include:

Large and Growing Population: Nigeria has over 200 million people, offering a vast consumer base.

Abundant Natural Resources: The country is rich in oil, minerals, and precious stones.

Economic Growth: Nigeria's GDP grew by 3.11% in the first quarter of 2022, with the services sector accounting for 52% of GDP.

Trade Opportunities: The United States and Nigeria have a bilateral Trade and Investment Framework Agreement (TIFA), and Nigeria is eligible for preferential trade benefits under the African Growth and Opportunity Act (AGOA).

Nose Yukio, advisor to small and medium enterprises, identified key regions and countries for Japanese businesses to explore in Africa. “In East Africa, it's Kenya, and in West Africa, it's Nigeria, particularly the port city of Lagos,” she stated.

Yukio offered strategic guidance for Japanese companies seeking success in Africa. “To succeed and not fail, look at the market for something needed, for example, automotive products, power generators, and water filters,” she emphasized. By focusing on essential, high-demand goods, companies can avoid common pitfalls encountered by international firms in Africa.

Yukio further advised Japanese companies to leverage local materials and Africa's competitive labor costs for local manufacturing, unlocking opportunities for sustainable growth.

In a separate discussion, 'Reconstructing the African Dialogue,' Japanese-Malian Professor Oussouby Sacko described Africa as “the last frontier of the global economy.” This characterization underscores the continent's vast potential for economic growth and development.

Professor Oussouby Sacko emphasized the importance of recognizing Africa's diversity and specific challenges, rather than viewing it as a single market, urging Japanese business leaders to adopt a nuanced approach. He noted that educational disparities could hinder trade partnerships between Japan and Africa, encouraging collaborative solutions to address this issue. Sacko stressed that “Africa needs to collaborate with Asia,” highlighting the benefits of enhanced cooperation.

An anonymous Japanese government representative reaffirmed the administration's commitment to fostering Japan-Africa partnerships, despite challenges like insecurity. This dedication is crucial as Africa's relationship with Asia has undergone significant changes in recent decades, evolving from minimal economic integration in the 1990s to robust trade partnerships today.

Experts like Amit Jain and Landry Signé suggest that Africa and Asia share similar economic and development challenges, offering opportunities for knowledge sharing and mutual growth. By acknowledging these challenges and collaborating on solutions, Japan and Africa can strengthen their partnerships and unlock new opportunities for economic growth and development.

Challenges and Opportunities:

Educational Disparities: Addressing regional inequalities in university access and education to foster a skilled workforce.

Diversifying Trade Partnerships: Exploring new areas of cooperation beyond traditional markets.

Security Concerns: Mitigating the impact of insecurity on trade and investment.

Asia-Africa Collaboration: Leveraging shared experiences and expertise to drive economic growth.

By recognizing these challenges and opportunities, Japanese business leaders and African partners can work together to create a more vibrant and sustainable economic relationship.

A Tokyo official expressed enthusiasm for partnering with African businesses, stating, “We are partnering with businesses in Africa because it makes us happy and helps us make money.” He added that Tokyo would continue to provide valuable information on opportunities across the continent.

The official commended the African Diaspora Network Japan (ADNJ) for shifting its focus towards tangible business collaborations. ADNJ's initiative to attract more African companies and entrepreneurs to Japan was particularly praised.

ADNJ President David Kpondehou expressed pride in the organization's efforts to alter perceptions and enhance cross-continental business interactions. “ADNJ is leading the way to change the narrative that Africans can travel on a business trip and come to Japan for days, he emphasized.