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Opinion

Japan Inc should invest in Africa, healthier and wealthier than ever

Companies are punching below their weight and missing opportunities

Dr Ngozi Okonjo-Iweala (left) is Board Chair of Gavi, the Vaccine Alliance, and Nana Akufo-Addo (right) is President of the Republic of Ghana.

With rich mineral resources, vast oil and gas reserves and a combined GDP of $3 trillion, Africa is widely regarded as the continent with the greatest potential for rapid growth. By 2030, its 1.2 billion population is forecast to have a spending power of $2.5 trillion.

For Japanese businesses, whose own domestic consumer markets are shrinking and which face higher or more complex barriers in the U.S. and China, the message is simple: Africa is open for business. Why, then, is Japanese business not seizing this opportunity?

Despite having one of the largest economies in the world, Japan's $10 billion of investment in Africa is dwarfed by many other countries, with the U.S. investing seven times more and the U.K. and France six times more. In no uncertain terms, Japanese businesses are punching below their weight.

More Japanese businesses and entrepreneurs need to follow the pioneering example of Hideyo Noguchi, the Japanese scientist who a century ago traveled to both our countries -- Nigeria and Ghana -- to work on yellow fever.

Africa is now a continent in the process of transformation. Africa has never been healthier, wealthier or a better destination for investment. Not only is Africa home to five of the 10 fastest-growing economies in the world but, within five years, the economies of 20 African nations are expected to continue growing at a rate of 5% or higher, well above the global average.

This is being driven not just by the continent's natural resources, but also by its people. Huge improvements in the provision of health care and education have created a burgeoning middle class, which already makes up a third of the continent's population, and has helped massively boost consumer spending.

For Japanese investment, which has traditionally concentrated on mineral extraction and motor vehicle export, mainly in South Africa, the time has now come to broaden their focus -- not just to other trading partners, but also to new sectors like infrastructure, services industries, consumer markets and new industries.

Investment in such areas encourages sustainable growth and, ultimately, leads to a virtuous cycle that is mutually beneficial to both trading partners. One example of this is technology and innovation, which are already challenging the idea that Africa is so far behind the rest of the world it will never catch up.

The proliferation of mobile phones is just one example, where new paradigms in technology have enabled Africa to leapfrog obstacles that have historically held it back.

This has not only revolutionized telecommunications in Africa, but spawned a broad range of digital and online services, from mobile payments to digital health and education, all of which are helping to shape positively Africa's future.

Similarly, in Ghana, with support from Gavi, the Vaccine Alliance, we now have the largest autonomous drone delivery service in the world.

Launched earlier this year, this nationwide service will eventually have 30 drones operating 24 hours a day, delivering vaccines and other vital medical supply to 20,000 health centers across the country, serving 12 million people out of a population of 30 million.

Developed by California-based Zipline and with support from the UPS Foundation, the fact that this is happening in Africa is a testament to how things have changed. By ensuring that even the most vulnerable children in the most remote parts of the country will now have access to immunization is ensuring that things will continue to change for the better.

Such feats would not be possible without a pioneering spirit of enterprise, echoing that of Hideyo Noguchi a century ago, or without an understanding of modern Africa and its potential.

Currently around 800 Japanese corporations are operating in the continent. Initiatives like the Africa-Asia Growth Corridor aim to encourage more. But it won't happen unless Japan sees Africa for what it truly is -- a land of opportunities.

Nana Akufo-Addo is President of the Republic of Ghana. Dr. Ngozi Okonjo-Iweala is Board Chair of Gavi, the Vaccine Alliance.

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