From Africa Recovery, Vol.12#2 (November 1998), page 23 (box within article on Tokyo conference)

Asian business eyes African opportunities

"Our investment climate is as good as in other parts of the world," Malawi Finance Minister Cassim Chilumpha told a group of more than 50 businessmen from Japan and other Asian countries, during a "business dialogue" held on the last day of the Second Tokyo International Conference on African Development (TICAD-II). He cited the high rates of return on foreign investments in Africa, the commitment of many African governments to sound economic policies, and the political stability that prevails in Southern Africa and some other parts of the continent. Despite such positive signs, Mr. Chilumpha said, "we haven't seen foreign direct investment coming in to support these efforts" on a sufficient scale.

There is considerable potential in Africa, however, affirmed Mr. Shigeji Ueshima, President of the giant Mitsui corporation and co-chair of the committee for the Middle East and Africa of Keidanren (Japan Federation of Economic Organizations), the association of leading Japanese enterprises. Currently, he noted, Africa accounts for only 1 per cent of Japanese foreign investment, compared with 22 per cent in Asia. In looking at new opportunities in Africa, Mr. Ueshima said, Japanese investors are most influenced by peace and political stability. "Private business investment flows to peaceful countries, and away from conflict."

Generally agreeing with Mr. Ueshima's emphasis, other business executives cited additional considerations. Mr. Motoyuki Oka, Managing Director of Japan's Sumitomo trading corporation, which is involved in exporting African products to the US and other markets, mentioned physical infrastructure and skills. Mr. Leopoldo Clemente, President of Clemente Holdings of the Philippines, said that specific incentives matter less to investors than do the overall growth and openness of an economy, which influence the stability of profit rates.

An official of the Malaysian Industrial Development Authority stressed the importance of external perceptions: while many African countries may be at peace and offer good conditions for foreign investors, the tendency of the major media is to focus on disaster and conflict, painting the whole continent with the same brush. "Bad news is free," he noted. "Good news you have to pay for." To attract investors, African countries therefore need to more aggressively project the continent's "good news."

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