TOKYO—Japan is set to announce a series of agreements with African countries to facilitate better access to their fuel and minerals amid intensifying competition with China to tap into the continent's natural resources.
The agreements will be reached during this weekend's African development conference, an event Japan hosts with heads of state from the continent every five years.
The focus of the event will be business and energy, as Japan looks, in particular, for new fuel sources to keep its economy running following a widespread nuclear-power shutdown following the 2011 Fukushima accident.
But Japan finds itself behind China in terms of building cooperative ties with African nations, as corporate Japan takes a hesitant stance on entry into the African market due to its sometimes harsh environment, political instability and risks of war and terrorism.
The Tokyo International Conference on African Development, the fifth meeting since its launch 20 years ago, will take place in Yokohama June 1-3, attended by 51 of the continent's 54 nations, including 40 heads of state.
Prime Minister Shinzo Abe will stay for the duration of the event and intends to meet all the visiting leaders as he tries to drive home the message that African leaders can count on his administration for developing long-term partnerships in contrast to the last six years of constantly changing prime ministers.
In 2011, Japanese direct investments in Africa stood at $460 million against China's $3.1 billion, while Japan's trade with Africa totaled only $30 billion, less than a fifth of China's $166 billion, according to the Japan External Trade Organization, a government-backed trade promotion body.
The number of Japanese living in Africa, meanwhile, totals only about 8,000, compared with China's 150,000.
Rather than try to compete with Beijing, several senior government officials said Tokyo may find it more advantageous to work with China on gaining access to resources and building cooperation with African nations.
"Working with China in Africa is very much a possibility in the future," said Katsumi Hirano, an expert of Africa for the government-affiliated Institute of Developing Economies.
Mr. Hirano believes such cooperation is especially likely in resource development, as natural gas has been discovered off the coasts of Mozambique, Tanzania and Kenya, all located on the continent's eastern seaboard, an area convenient for shipments to Asia.
But Japanese businesses remain cautious about investing in Africa. "We do not think we have to have an office in Africa," said Takashi Suzuki, who is responsible for overseas business development at Nippon Steel & Sumitomo Metal Corp., a major buyer of coal from Mozambique. Mr. Suzuki said his company is still looking into whether it actually needs a comprehensive African strategy.
A terrorist attack in Algeria in January, in which 10 Japanese were killed, including employees of plant engineer JGC Corp., has only added to the cautious mood.
Africa itself doesn't wish to be torn between some kind of resource competition between Japan and China, two of its largest aid donors.
"There's no point in Japan competing with China," said Stuart Comberbach, Zimbabwean ambassador to Japan. "Africa was a victim once before of big power rivalry, between the West and the East. We paid a heavy price for that in terms of proxy wars fought on our continent. We have no willingness at all to get involved in any kind of geo-strategic rivalry."
During the coming meeting, Japan will sign an investment accord with Mozambique and will likely agree to launch negotiations for such an accord with Kenya, Tanzania and Ghana, Japanese trade officials said. The agreement is aimed at preventing appropriations of assets and arbitrary changes in business rules.
To ease concerns about piracy along key shipping lanes connecting Japan and Africa, Tokyo will agree to train coast guard officials, and provide patrol boats, for east coast countries including Somalia, Djibouti and Kenya, they said.
Japan will also agree to help countries of the East African Community create a common customs infrastructure that makes cross-border shipments within the region easier while building a larger market for Japanese companies. The community comprises Kenya, Uganda, Tanzania, Rwanda and Burundi.
Write to Mitsuru Obe at mitsuru.obe@dowjones.com
30 May, 2013
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