The entire event venue
On Thursday, December 19, 2024, the fourth edition of the Africa Conversation 2024 took place. With the theme “First Steps to Africa: Creating Opportunities for a Prosperous Future,” more than 243 participants from all over the world, including online attendees, attended the event. The event provided an opportunity to explore specific business opportunities in Africa. Entrepreneurs, investors, business people, and academics from both Africa and Japan spoke at the event. Actual success stories and strategies for overcoming challenges were shared, providing an opportunity for Japanese companies to overcome physical, psychological, and historical barriers and take the “first step” into the African market.
The event opened with a keynote speech by Professor Masahiro Okada of Keio University’s Graduate School of Business Administration, who shared the following three perspectives
1 . Africa has great potential for Japanese companies and they should actively participate
Africa has great potential for Japanese companies and they should actively participate in the African market 2. Reasons for and background of hesitation of Japanese companies to enter the African market
Reasons for and background to the hesitancy of Japanese companies to enter African markets 3 . Importance of fostering a more proactive risk-taking attitude
Professor Okada pointed out that while many African countries are experiencing strong economic growth, exceeding the global average growth rate of 3.8%, Japan’s Foreign Direct Investment (FDI) in Africa as of 2017 remained low at $8.7 million, only one-seventh of France and half of India. This figure is significantly low considering the size of Japan’s GDP and at the same time shows the untapped potential of the African market, he said. He also analyzed the situation as being due in part to the strong risk aversion of Japanese firms. In fact, Japanese companies rank last in return on assets (ROA) and 26th in risk tolerance out of 27 countries, and the uncertainty avoidance index for Japan is 88, much higher than the global average of 55. Professor Okada attributed the risk aversion of Japanese companies to the values of the country, the company, and the manager level:
1 . Developing entrepreneurs who are willing to take on the challenges of the African market
Develop entrepreneurs who are willing to take on the challenges of the African market 2 . Educate decision makers in large companies to be more interested in the African market and to be open to risk
Moderator Shuhei Ueno, Deputy Director of JICA’s Africa Department, then provided background for the event, emphasizing that further involvement of the private sector, both from within and outside Africa, is essential for Africa’s development. Referring to Professor Okada’s research, he noted that if many employees have experience with Africa through study abroad programs during their student years or corporate training, companies will be more likely to make the decision to expand into Africa. He also expressed his hope that this seminar will encourage many people to take the “first step” into Africa, and that Japanese companies will expand their presence in Africa.
Olatokunbo Ige, Founder and Executive Director of Afrika Nunya, spoke about the “uniqueness” of the African market, emphasizing that Africa is a diverse market consisting of 54 countries, each at a different stage of development and with different geographic characteristics. He cited specific examples such as the burgeoning youth population (which is expected to account for a quarter of the world’s population), abundant natural resources (oil, rare earths, etc.), adaptability to rapid technological development, and a growing number of unicorn companies as characteristics that support the potential of the African market. He also pointed to Africa’s increasingly important role in global governance, noting that intergenerational and intercultural partnerships are key to unlocking Africa’s full potential.
Meanwhile, ABE Initiative alumnus Mukahirwa Delphine, who works in Japan as a software developer for Rexbert Communications, discussed the potential that Japanese companies have in the African market, not limited to youth-oriented products. He argued that Japanese companies should not hesitate to expand into Africa because the African people are highly adaptable and receptive. She also emphasized the importance of “co-creation,” saying that through cooperation with local companies, products can be jointly developed to meet local needs. She noted that in the African business environment, while there may not be an immediate partner or market, this is rather an opportunity to gain a foothold, leverage Japanese technological capabilities, and work with local companies to create innovative solutions. He also noted that Japan’s infrastructure and financial resources have the potential to encourage creative ideas in Africa and grow together. He called on Japanese companies to explore Africa’s potential through strategic cooperation, concluding that with the right approach, countless opportunities and long-term benefits can be found.
Mr. Tomihisa Shirakawa, Deputy General Manager of the Financial Corporations Department of Sumitomo Mitsui Trust Bank, Limited, gave a presentation on issues identified through the Keio Executive MBA Project visit to Kenya. Specifically, he cited issues such as increased demand for housing due to rapid population growth, underdeveloped public transportation systems, and lack of commuting options. To address these issues, Mr. Shirakawa introduced a business plan to utilize security tokens as a new financing tool. The concept is to convert real estate and movable assets into small lots and sell them as digital securities to investors. Mr. Shirakawa stated that his visit to Africa allowed him to identify key challenges in the Kenyan real estate industry, reaffirm the strong connection between motorization and the use of security tokens (STOs), and recognize the growing awareness of IT technology.
Mr. Hayato Douji, President of the NPO CLOUDY and Representative Director of DOYA Corporation, spoke about the cultural richness of Africa and its business potential. He shared his experience of working with both NPOs and for-profit companies to address local issues such as poverty, educational disparity, and gender inequality. As a concrete example, he introduced an initiative to establish a public school that can be run by the local people themselves, in cooperation with the government, local authorities, and the community. The school aims to build a cycle of self-sufficiency by conducting agricultural activities on the school grounds to ensure sustainable operations. In addition, we introduced an initiative to provide local women with stable employment and skills for self-sufficiency by teaching them traditional African cloth-making techniques. The goal is to provide women with opportunities for self-reliance and economic stability. In these activities, he emphasized the importance of going to the field, seeing the actual situation firsthand, identifying the essence of the problem, considering what is really needed, and then fundamentally resolving the problem with cooperative and sustainable solutions. He also shared his own experience of learning the value of happiness from African people, who find happiness in their daily lives and share it with others. He encouraged the participants to experience Africa first hand.
Professor Masahiro Okada of Keio University’s Graduate School of Business Administration presented on his hopes for business strategy education for Africa, which is part of his Executive MBA course, and his efforts to promote “first steps” into Africa. Focusing on the challenges and opportunities of the African market, Professor Okada shared data from a recent survey of Japanese companies that showed that three-quarters of respondents were not positive about the African market. Many companies cited external factors as barriers to market entry, such as lack of local business operation know-how, difficulty in finding reliable partners, and lack of knowledge of partnership and M&A techniques with local companies. However, Professor Okada stressed that these challenges can only be overcome through direct experience in Africa. He explained that his program incorporates a mechanism for working students to conduct on-the-job training (field studies) in African countries in order to validate their own business models. Professor Okada expressed his hope that more Japanese companies will take the “first step” in their efforts on the African continent.
In addition, Mr. Tomihisa Shirakawa of Sumitomo Trust & Banking, who participated in the Africa visit curriculum in Professor Okada’s course, explained that although this visit was optional, about half of the students chose to participate with great enthusiasm.
In addition to these discussions, Mukahirwa Delfine and Olatokunbo Ige shared further insights into the potential for cooperation between Africa and Japan.
Delphine stressed the importance of addressing cultural and linguistic gaps and fostering a positive work environment. In particular, he touched on the impact of factors such as silence and noise in the workplace on concentration, noting that proper management of these factors can lead to better cooperation between African and Japanese companies. He cited his own experience when he started working for a Japanese company, where he was surprised by the quietness of the Japanese office environment and found it difficult to maintain focus in unfamiliar situations.
On the other hand, Olatokunbo pointed out that Japan and Africa have many things in common and areas that complement each other. In particular, she cited cultural similarities in the areas of cuisine and the arts, citing the example of a restaurant run by a friend of hers in Togo, where the cuisine of a Japanese chef has become popular among the locals. She also noted the willingness of African people to learn from the outside and to explore new things, emphasizing that this is the key to opening up possibilities for greater exchange and cooperation between the two regions. He also pointed out the business potential in the field of agriculture, such as the development of cold storage facilities, and expressed the view that young engineers from Japan and Africa could work together to combine traditional knowledge with innovative technology to co-create solutions that would benefit both sides. Finally, Mr. Olatokunbo emphasized the importance of being open to risk in business. He noted that risk is inevitable when doing business in any country, and having a strategy to effectively mitigate and manage risk appropriately is the key to success.
During the Q&A session, concerns were raised that the entry of foreign companies into African markets could lead to neocolonialism. In response, Professor Okada acknowledged that this issue is a historically sensitive topic, but stated that modern African countries recognize the value of foreign technology, know-how, and foreign investment for economic growth. Dr. Touji emphasized the need for a comprehensive approach to business, with full consideration of social impacts, through support of local communities and cooperation with governments.
When asked about the effectiveness of franchising as a risk mitigation measure when entering African markets, Professor Okada stated that the franchise system can be an effective way for companies to expand their business with relatively low risk.
In response to a question about how Japan’s attitude toward business risk differs from that of other G7 countries, Professor Okada pointed out that Japan had relied on a no-risk, high-return strategy during its period of rapid economic growth, and that risk aversion had further intensified after the Lehman Shock in 2008. He also noted that the Japanese people’s aversion to uncertainty may also be a factor.
In his closing remarks, Mr. Shuhei Ueno, Deputy Director of JICA’s Africa Division, concluded the event by expressing his hope that the insights gained from the discussions on the diverse possibilities of the African market, partnerships with Japan, the importance of local experience, and the fun of doing business based on problem solving will be put to good use at TICAD 9, which will be held in August 2025. He concluded the event.
© Source JICA
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