When it comes to investments in Africa, China has been the most aggressive. Turns out, Japan is now challenging China by making assertive investments in Africa. Japan has extended its investments in Africa in 2014, including financial aids, mortgages and commercial projects.
Between 2008-12, Japan’s investments in Africa were a mere $9 billion but it has now been estimated to increase to $32 billion. Japanese investments in Africa are spread across energy, ports and roads, farming and other infrastructural projects. Up until now, Africa turned to China for profitable investments who continues to be the biggest resource for investments in Africa.
Japan Surges Investments in Africa, Challenging China
According to financial analysts, Japan is making aggressive moves and increasing African investments as a step towards challenging the dominance China shares over foreign investments in Africa. Both the nations are aware of the abundance of natural resources in Africa and working towards expanding opportunities. This is also a power play in terms of political, geopolitical and trade alliances with Africa. While China holds the majority at present, Japan has the upper hand in terms of the quality it provides, unlike China that runs on a government based model.
China has been able to make such large African investments because of the many projects supported by the state. Chinese run businesses have also been creating large job opportunities for people in Africa. It has contributed to the growth of the economy in Africa with not just jobs and capital investment but also a complete managerial and entrepreneurial wave.
Are India’s Investments in Africa Surging too?
In 2016 PM Modi and his Japanese counterpart officially announced the African-Asian Growth Corridor. Investments in Africa by India have grown both in terms of the public and the private sector over the last decade. The majority of the Indian investments in Africa are aimed towards Mauritius. Public sector investments are aimed towards natural resources of energy; however private sector investments have expanded to manufacturing too. Although currently India and Africa do not share a very strong investments relationship, the potential between the two countries is immense and slated to grow even more in the coming decade.