Japan Pledges $32bn in Africa Aid, Seeks to Balance China’s Influence in the Region

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Africa will become the global engine of growth in the coming decade said Japan Prime Minister Shinzo Abe on Monday at the end of a three-day African development conference in Yokohama, as he unveiled a $32 billion investment package aimed at accelerating growth, sustainable development as well as poverty reduction on the continent.

Eager to match China’s influence in Africa, Japan on Monday pledged to increase its aid to the continent over the next five years to 3.2 trillion yen ($32 billion), which includes spending in the public and private sectors to create jobs and develop infrastructure.

"Africa will be a growth centre over the next couple of decades until the middle of this century... now is the time for us to invest in Africa," Abe said at the end of the conference which brought together delegations from 51 African nations as well as representatives from the United Nations and World Bank.

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Resource-poor Japan has long been keen on Africa's vast natural resources, even more so since dependence on oil and gas imports surged after the March 2011 Fukushima nuclear disaster shut almost all of Japan's nuclear reactors.

But Tokyo, Abe said, will not simply bring natural resources from Africa to Japan. “We want to realise industrialisation in Africa that will generate employment and growth."

Japanese officials also stressed the need to transform their country's relationship with Africa from one of donor-recipient to that of business partnership, as Tokyo's firms seek to tap a burgeoning market.

Among other measures, Japan will invite a thousand people from Africa to study and work as interns at Japanese companies.

"We hope to further support and continue to expand together with Africa. We hope to develop a win-win situation in our relationship,'' Abe said.

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While Abe did not mention China specifically in his remarks, correspondents point out that Japan is eager to catch up to rival China, which has invested heavily in the resource-rich continent.

In a commentary, the state-owned China Daily said:

Japan has been adopting dollar diplomacy since the Abe administration took office in late December. The country has been busy announcing development aid programs for Myanmar, India and Africa ... It is not difficult to discern the motivations behind Japan's increased aid to Africa.

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Despite relatively longstanding relations, Japan has been eclipsed by China in bilateral trade and investment in Africa.

In 2011, Japanese direct investments in Africa stood at $460 million, compared with China's $3.1 billion, while Japan's trade with Africa totalled $30 billion, less than a fifth of China's $166 billion, according to the Japan External Trade Organisation and China's government data.

Aides added that the total was meant to match, and in some ways exceed, China's expanded economic assistance to the region, which they estimated would total $20 billion in low-rate loans over the next three years. Independent experts say that it is hard to verify China's aid claims, which may overstate the amount of direct assistance, as opposed to financial investment.

Related: China Pledges $20bn in Loans to Africa

Related: China Sent $75 Billion In Secret Aid To Africa Over Last Decade: Study