Japan emerges top Asian investor in Nigeria, African projects

CONTRARY to popular belief that China is the dominant Asian’s investor across the Africa continent especially Nigeria, a research by global law firm- Linklaters, has said that over two thirds of all Japanese-led deals over the past decade have focused on Nigeria, making the Far East Asian country the biggest Asian investor in Nigeria.

According to the research published on its website last week, Japan now ranks as the most active Asian project finance sponsor in Africa as a whole, spearheading 160 per cent rise by Asian funds in African project finance.

The Managing Partner of Linklaters’ Japan office said: “Japan has made slow but significant inroads in growing its influence across the continent. This underpins why many in the market are expecting African countries to remain significant investment destinations for Japanese capital over the next decade”

“Over the last 10 years, the level of project finance investments sponsored by Asian funds in Africa has increased by over 160 per cent the amount of fresh capital poured into the continents’ projects such as roads, water sanitation plants and oil and gas pipelines in the last year alone standing at $4.16 billion”, Linklaters said.

Maxwell added: “It’s no surprise to see Nigeria feature so prominently – the investment appetite is huge, with opportunities and a level of return on investment across the energy and infrastructure sectors to match.”

The report revealed that the surge was attributable to Japanese investors, who have ramped up their project finance commitments in Africa by a overwhelming 576 per cent culminating with $3.54 billion invested in last year alone as a result of a large focus on projects in Morocco.

According to report, China ranks as the second biggest Asian sponsor into Africa, committing in excess of $11.9billion of project financing over the past decade.

The report said that about half of China’s investment ($4.9billion) was focused on South Africa.

It added that it was closely followed by India which has bankrolled more than $10.5billion of project finance investments, half of which have been based in Mozambique where it stands as the country’s leading investor.

This information is coming after a recent pledge by representative of Japanese investors who is the Trade Commissioner and Managing Director of Japan External Trade Organisation (JETRO), George Sato that Japan would invest more in Nigeria after the 2015 general elections.

JETRO reported earlier this year in its fact sheet that the recent Ebola issue that hit the nation as well as the insurgency in the Northern part of the country dwindled the interest of Japanese investors into the country.

The publication revealed that Japan’s export to Nigeria was stagnating despite Nigeria’s economic growth stating that trade between Nigeria and Japan stood at $4.2 billion for the year 2013.