Bric trade with Africa overtakes Japan
Brazil, Russia, India and China (Bric) have overtaken Japan in terms of their trade with Africa, according to a report issued from the Standard Bank.
The report says that while Japan-Africa trade relations have displayed growth momentum, they have been unable to keep pace with the huge rise in Africas trade relations with the emerging world.
As such, while Japan-Africa trade roughly doubled between 2001 and 2009, China-Africa trade expanded by almost 1,000%, India-Africa trade rose by 525%, Brazil-Africa trade by 224% and Russia-Africa trade by 262%. Indeed by 2009 Chinas trade with Africa was five times that of Japan and Africa.
Japan is lagging the Brics in Africa for two key reasons, says the report.
Firstly, the Brics have a deeper understanding of operating within challenging emerging market environments. Secondly, Bric enterprises are, more often than not, provided superior support from their respective governments in securing deeper access to African markets.
This advantage is most clear in the Chinese context, where Chinese state capital chanelled to Africa to support development strategies, largely in the infrastructure space, abundantly enhances the ability of Chinese companies to engage more wholesomely in high-growth African economies. As such, and in contrast to Japan, Chinese aid to Africa has a more direct impact on the ability of its domestic corporations to profitably engage Africa.
To address this the report says the Japanese authorities and private institutions need to re-engage with Africa.
Africa offers much of what Japan and its key advanced economy partners lack: a large and growing population, rising prosperity which is fuelling the swelling of urban nodes and an increasingly affluent middle class, and abundant natural resources to fuel industrial expansion, the report says.
Conversely, Africa lacks much of what Japan is able to offer: capital and expertise to upgrade the continents infrastructure stock, and manufactured goods, particularly in the automotive sector, to provide immediate nourishment for the demands of Africas consumer class. While perhaps some way off, raising consumer markets will eventually reflect in demand for Japanese manufactured goods.
The marriage seems neat, but Japan is finding the commercial terrain in Africa far more competitive with the inspired engagement of the Bric economies across the continent.
Bric trade with Africa overtakes Japan | News | Fund Strategy
