The president of the African Development Bank Group, Akinwumi Adesina, has called for a significant increase in Japanese investment in Africa, saying the continent is the world’s best investment destination now and in the future.

Adesina is leading a bank delegation on a five-day visit to Japan during which he will meet senior government officials, large Japanese companies, development partners and members of the African diplomatic corps in the country.

Delivering a lecture at the Japan-Africa Investment Ecosystem Co-Creation Forum in the capital, Tokyo, Adesina said Africa offers enormous investment opportunities and gave examples of Japanese companies that have been running profitable businesses on the continent for many years.

The forum was organised by Keizai Doyukai, a private, non-profit and nonpartisan organisation that brings together nearly 1 400 top executives of some 1 000 corporations.

Adesina pointed out that Japan’s foreign direct investment in Africa declined from US$10 billion in 2016 to just US$4,7 billion in 2020 during Covid-19 but recovered to US$6 billion in 2021.

Africa accounts for only 0,003% of Japan’s US$2 trillion global foreign direct investments.

In terms of trade, the volume of exports and imports between Africa and Japan remains lower than 2%. Adesina said there was every reason to change the trend.

He mentioned the state-owned Japan Bank for International Cooperation (JBIC), which, together with Total and other investors, including the African Development Bank, co-financed the US$24 billion Liquified Natural Gas project in Mozambique – which will make it the third largest in the world. Japan will buy 30% of its production.

JBIC and Mizuho Bank, along with the African Development Bank and nine other financial institutions, invested US$2,7 billion to build the Nacala corridor railway and port in Mozambique.

Adesina cited Japanese multinationals such as Toyota Tsusho, Mitsubishi Corporation, Hitachi and Komatsu, whose businesses make billions of dollars in profit every year.

“These companies will tell you investing in Africa pays!” said Adesina, “there is now a greater pulse and excitement for more Japanese investments in Africa.”

The Africa Development Bank chief said the successes of large Japanese companies operating in Africa are spurring a new generation of young Japanese to turn their eyes to venture capital and private equity funds to support small- and medium-sized enterprises.

Speaking during the forum, the vice chairperson of the Africa Project Team at Keizai Doyukai, Ken Shibusawa, said a new company, &Capital Inc, was formed early this year to promote Japanese investments in Africa.

While the number of Japanese companies in Africa increased from 520 in 2010 to 900 in 2020, Adesina called for more venture capital and private equity funds to tap into the continent’s huge potential.

He thanked the Japanese government for recognising Africa’s strategic importance and showing a strong political will to invest in Africa.

Japan’s prime minister Fumio Kishida announced during the TICAD 8 Summit in Tunis last year US$30 billion for Africa, including support for start-ups in Africa, green growth, and training of 300 000 professionals from Africa.

Adesina spelled out areas in Africa with enormous investment opportunities for Japanese investors.

“With appropriate skills, they will form the labour force for global industries as many countries face a rapidly ageing population,” said Adesina.

The recent establishment of the African Continental Free Trade Area makes Africa the largest free-trade zone in the world in terms of participating countries.

Manufacturing opportunities alone would reach US$1 trillion in 2025. And Africa’s consumer spending will reach US$6,7 trillion by 2030.

In addition, Africa has the world’s largest renewable energy sources, including solar, wind, hydropower, and geothermal.

The continent also holds the key for the world as it transitions towards electric vehicles with its abundant deposits of minerals and metals such as platinum, lithium, cobalt, copper and graphite.