Abe Offers $32 Billion to Africa as Japan Seeks Resources – by Isabel Reynolds & Takashi Hirokawa (Bloomberg News – June 1, 2013)

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Japanese Prime Minister Shinzo Abe pledged 3.2 trillion yen ($32 billion) to Africa as his government seeks to catch up with China in pursuing resources, markets and influence on the continent.

Abe announced the five-year commitment of public and private support in a speech today at theTokyo International Conference on African Development. Officials from about 50 nations are attending the meeting, held every five years, which is the biggest African development event outside the continent since it began in 1993.

Africa’s economic growth is luring Japanese exporters, while the government wants to tap the natural gas and oil there after the 2011 Fukushima disaster led to the closing of Japan’s nuclear plants. Chinese firms helped fuel $138.6 billion in China-Africa trade in 2011, almost five timesJapan’s commerce with the continent, according to the Foreign Ministry, citing International Monetary Fund data.

“China has become a far greater presence than Japan in Africa — it’s overwhelming,” said Kazuyoshi Aoki, a professor at Nihon University in Tokyo who specializes in African matters. “The difference lies in the level of determination. There’s a different perception of Africa’s importance.”

Encourage Investment

In his speech, Abe outlined policies to encourage investment by Japanese companies and support advances in health, education and agriculture. Today’s pledge compares with publicly funded assistance of about $9.2 billion from 2008-2012.

Abe hasn’t visited Africa since taking office in December, in contrast with Chinese President Xi Jinping, who stopped in Tanzania, the Congo Republic and South Africa in March as part of his first trip abroad less than a month into office.

While in Africa, Xi reiterated a pledge for $20 billion in loans over the next two years. China also paid for and built the African Union’s $200 million headquarters in Addis Ababa, Ethiopia that opened last year.
Most of Japan’s purchases from Africa consist of metals and fuels, including 10 percent of last year’s liquefied natural gas imports, according to Finance Ministry data compiled by Bloomberg. Japan exports mostly vehicles and machinery, according to the Japan External Trade Organization.

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