African countries have been urged to review unfavourable investment policies, including double taxation, to attract more investments on the continent.
Kataumi Hirano, the vice-president of the Institute of Developing Economies and Japan External Trade Organisation, said it is crucial for African states, including Rwanda, to put in place mechanisms that minimise risk and enhance investor protection to boost foreign direct investments (FDIs) on the continent.
He advised the continent to be wary of bad trade treaties, saying these could affect the continent’s economies, especially in the current global commodity price decline.
Hirano was addressing African reporters yesterday in Tokyo, Japan a head of the sixth Tokyo International Conference on Africa Development (TICADVI) due to take place in Nairobi, Kenya in August. This is the first time Africa will be hosting the event, which is expected to bring together over 6,000 trade experts, investors and policy-makers from Africa and Japan. Hirano said African leaders and trade experts should use the forthcoming TICADVI as an opportunity to discuss mechanisms and strategies to promote investments on the continent for sustainable and inclusive growth.
He noted that investing in skills development and value-addition will keep economies, like Rwanda, more competitive despite a fall in international commodity prices.
“Economies like Rwanda should continue investing in productive industries, human resources and value-addition to boost exports and stay buoyant. This will equally require increasing investments in these sectors to remain competitive,” Hirano said. He rooted for agro-processing, arguing that this will help cushion African countries against the effect of drop in commodity prices, especially minerals.
He said African economies can defy the odds facing the global economy by trading in finished products, and not raw materials. “However, for this to happen, there is need for all stakeholders to collectively seek ways of increasing competitiveness of agricultural products by improving quality and production capacity. This will ensure economic sustainability and inclusive growth on the continent,” he said.
Noria Maruyama, the director general in charge of African affairs at the Japanese Ministry of Foreign Affairs, Japan, however said African countries need to create an enabling environment to attract global businesses for this to happen.
Meanwhile, the last TICAD summit held in Japan in 2013 focused on the importance of the private sector in Africa’s development. As part of the deal, the government of Japan is currently assisting and encouraging Japanese companies to invest more in Africa, according to Eguchi Hideo, the director general for Africa at the Japan International Co-operation Agency (JICA).
TICAD was launched in 1993 by Japan to promote political dialogue between Africa and its development partners, and to mobilise support for African development initiatives.