JAPAN ANNOUNCES NEW AFRICAN FREE TRADE AGREEMENT
- Michael Thervil
- Aug 21
- 3 min read
Written by Michael Thervil
[Japan African free trade agreement] Yesterday at the Tokyo International Conference On African Development (TICAD) Japanese Prime Minister Shigeru Ishiba announced that Japan would engage in a free trade partnership with Africa. To accomplish this, Japanese Prime Minister Shigeru Ishiba stated that Japan would foster an Economic Zone linking Japan to Africa through the Indian ocean. This free trade initiative entitled “The Indian Ocean Africa Economic Zone Initiative”, is an initiative that seeks to bolster the economies of participating African countries as well as allow Japan to diversify and shield itself from the Americans. The TICAS is a three-day conference that was held in Yokohama Japan this year and focused on the peace, stability, health, climate change, education, and of course economic relations between Japan and African countries. Roughly 50 African Leaders from 30 African nations along with heads of international organizations attended this year’s event.
Prime Minister Shigeru Ishiba has agreed to provide loans up to $5.5 billion dollars to the African development bank to address the debt of participating African nations. As a bonus in terms of aiding in the financial growth of Africa, Prime Minister Shigeru Ishiba also agreed to train 30,000 Africans in the sector of Artificial Intelligence over the next three years. The African nation of Kenya has already signed a yen-dominated deal, the amount of the loan is currently unknown. However, what is known is that with the aid of the Japanese extended loan, it would help African countries far exceed their financial growth forecast and in the case of Kenya, their financial growth forecast (GDP) with Japan’s loans is expected to exceed 5.6% which is up more than 4.7% from last year. It should be noted that Kenya also signed a loan dean with Nippon Export and Investment Insurance (NEXI) which would further enhance Kenya’s financial growth outlook.
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To be honest, up until 5 years ago, most of the world for the exception of China and Russia have cared less about Africa and this time with Japan throwing their investment hat in the ring, it’s safe to say that Japan has no more interest in Africa than what it can extract from them in the long run. Secondly, it can be said that the only reason why Japan is moving toward Africa in this manner is because they are looking to diversify their investment portfolio because of the high level of unpredictability from the Trump Administration.
As the largest American bond holder in the world, Japan is seeking the best way to offset that without being forced to dump American bonds in a fire sale while at the same time avoid having to face the predictable wrath of the American’s. Japan’s investment in Africa should be seen for what it is; and that’s a way to circumvent President Trump Reciprocal Tariffs. while it is true that Japan was coercion into buying and importing more American products like American cars by the Trump administration, Africa appears to be a great place to dump/redistribute those forced American goods as many American products like America cars have been found to be “unfit” for public use in Japan. In the end if Japan deploys this strategy, it will allow them to both offset American tariffs and that bad trade deal they just signed while recuperating some of their money back from reselling those products to the Africans.
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