Japanese ODA by Aid type(2007 constant prices)

Gross loans

Net loans

Grants

(billion $)

Debt forgiveness

Expected collaboration between private and public sector in Japan

• Japanese ODA wants yen-loan projects in bigger scale

• To share costs and risks of Africa business

• Infrastructure building based on demand of the private sector

• Project design on custom-made

• PPP based upon the above principles

People

Government Government

CSR

PPP

G-G

donor countryrecipient

tax, loyalty

PPP

Open direct channels to the peopleto strengthen our relations with Africa

business investor

IDE-JETRO projectsscientific design of effective CSR program

• With Toyota South Africa

anti-HIV/AIDS program in its factory

• With Sumitomo Corporation

effective utilization of Olyset-Net in Madagascar

• With Hernic Ferrochrome Ltd.

community-development program at the company’s surroundings

Development stages • Agricultural productivity increase will provide

abundant and cheap food

• Cheap food will keep labor cost low

• Low labor cost will attract investment in labor-intensive industries

• Expansion of labor-intensive industries will achieve full-employment

• Full-employment will result in wage increase

• Chemical fertilizer industry stands for this history

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1885 1900 10 20 30 40 50 60 70 80 90 2000

0

1000

2000

3000

4000

5000

6000

7000Rice yield per ha

Real economic growth rate

High economic growth period in Japan was coincident with the rapid improvement in rice yield

(kg/ha)

Industrial expenditures in general account of Japanese government (1955-1975)

Agriculture, Forestry, Fishery

Industry, Mining

Transportation, telecommunication

Abnormally low level of cereal yield in Africa(kg/ha)

Sub-Saharan Africa

Global average

Asia

Fertilizer input volumecorrelation with land productivity: 0.99 in Asia 0.94 in Latin America 0.86 in Sub-Saharan Africa

Sub-Saharan Africa

Latin America

South Asia

Southeast Asia

(kg/ha)

Price indices of chemical fertilizersAlmost prohibitive level in Africa Sub-Saharan Africa

Latin AmericaDeveloping Asia

‘Diminishing return’ has brought impoverishmentCereal production per farmer

(kg per farmer)

China

IndiaSub-Saharan Africa

Southeast Asia

1985 1990 1995 2000Sub-Saharan Africa 0.58 0.88 0.76 0.52 Zambia 0.44 0.79 - 0.39developing Asia 0.38 0.40 0.46 0.41 China - 0.08 0.33 0.25

1985 1990 1995 2000Sub-Saharan Africa 2.87 3.71 2.78 2.54 Zambia 0.98 3.02 - 1.54developing Asia 1.87 1.78 1.98 1.67 China - 1.14 1.70 1.29

Low productivity brings comparatively high food price in Africa

Index of cereal price

Index of meat price

1980 1985 1990 1995Sub-Saharan Africa 4,322 3,311 5,186 6,239 South Africa 6,120 4,466 7,708 10,093 Zambia 3,245 2,492 1,767 3,429Asia 1,048 896 1,386 2,009 China 548 286 319 504 Indonesia 838 1,011 715 1,458 Korea 2,837 3,476 9,353 16,435

High food price results in high wage:No comparative advantage in labor

Average wage (1990 constant dollars)

Agricultural development in Africa will become more than African Development matter

• Global grain market will be much tighter

• ‘Land Rush’ from the Middle East and East Asia

• Grain and food business will attract much more interest

• Exemplified by Zambeef

Disconnect between urban and ruralurbanization has brought food import

Cereal dependencyto import

Urbanization rate

Cereal dependencyincluding food aid

Import share in the world trade volume

Africa -wheat

Africa -rice

Japan -maize

Cereal import volume

East Asia

Africa

Sub-Saharan Africa

Japan

(million tonnes)

Agricultural trade of Zambia(shares in GDP)

import

export

Agricultural trade balanceshares in GDP

Sub-Saharan Africa Zambia

If food sufficiency rate exceeds 100% in Zambia,Disadvantage of land-locked will turn to be big advantage

Attract Japanese companies

• Build firm agriculture to establish stable society free from poverty, which make Zambia an advantageous country in the continent

• Become a gateway to the regional market, which make disadvantage as a land-locked to geographical advantage

• Japanese companies are now under push-out pressure because of shrinking domestic market

cement, building materials, education business, food manufacturing, etc.