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Speech Transcripts

August 26, 2016

Opening Remarks at TICAD VI side event "Africa's Transformation through Industrial Policies and Implementing the Agenda 2063"

Hilton Nairobi, Kenya

It is a great pleasure and honor to be here this afternoon with our distinguished guests, passionate leaders, practitioners, and academics. I would like to express my sincere gratitude to our co-hosts here today, Miss Helen Clark from UNDP, Dr. Akinwumi Adesina from the African Development Bank, and Professor Joseph Stiglitz from the Columbia University. I would also like to welcome and thank the panelists and the all guests in the audience.

Let me first start by sharing the history of JICA's involvement in this important endeavor and what brings us to host this event here at TICAID VI. In 2008, back when it was still TICAD IV, the Japan International Cooperation Agency, JICA, and Professor Stiglitz began a joint research initiative on the significance of industrialization and its impact on the global economy. We are happy to say that after eight years, we are now on our fourth phase of our research. Our first phase started by covering economic growth in Africa, and the second phase, on the concept of industrial policy and economic transformation. Today, we are excited to launch our publication called, "Industrial Policy and Economic Transformation in Africa" that demonstrates the outcome of our second phase of research.

Today's event is called "Africa's Transformation through Industrial Policies and Implementing the Agenda 2063." This event echoes the theme of our publication, as well as recent international discussions on African development. The recent economic growth in Africa heavily relies on natural resources, but it is vulnerable to external risks, like financial crises and fluctuating commodity prices. Industrialization and economic transformation not only strengthen the economy, but it also addresses today's many challenges in Africa. These challenges include a rapidly growing population, especially among youth, that is expected to only accelerate in the coming years. Additionally, the largest proportion of African workers currently depends on informal sectors and less-productive forms of agriculture and mining that do not create more jobs. To the contrary, manufacturing, a promising sector that can create reliable jobs, is actually decreasing as a proportion of GDP.

We know that industrialization is the key to job creation, poverty reduction, and economic stabilization in Africa. We know that this can lead to sustainable and inclusive growth. But what we need to know more is how to actually go about doing this. The AU Agenda 2063, the SDGs Goal 9, and even this TICAD VI Conference stress the importance of industrialization. But are we all ready to implement this concept? And who should be responsible to push industrialization forward? It is up to the will of the people and government of each country. They are the ones who need to take charge and provide the determination and perseverance to bring about truly effective, lasting industrialization to their countries.

I'd like to use modern Japan as one example of the many countries that aimed to transform its economy to prosper. During the Meiji period, roughly the 1860s to the early 1900s, we emphasized mineral and agricultural exports. Rice, green tea, and copper were among the early target commodities. But these efforts to industrialize did not succeed right away. The rice couldn't keep up with international competitors, and green tea couldn't overcome the popular demand for black tea. We tried again with silk and daily necessities like umbrellas and shoes. Eventually, these commodities slowly developed new markets and business partners over the globe, and later created a boom for light manufacturing in Japan. Government policies also provided support by facilitating an environment for dynamic private sector growth.

Given our own history, one of JICA's most important pillars for our aid strategy in Africa is to promote "Economic Transformation through Industrialization." Recognizing the importance of industrial policies, JICA supports Africa's industrialization from many dimensions. These dimensions include the development of human resources and infrastructure, and the improvement of existing institutions and systems.

One example of JICA's assistance to African countries is its promotion of Japan's "KAIZEN" approach as a mechanism for private sector strengthening in developing countries. KAIZEN was an approach developed in Japan in the course of economic development, which focuses on regular improvement of basic management and organizational capabilities. These improvements are realized with only minimal capital investment, and with the practical collaboration of both managers and workers. Nowadays, KAIZEN is a phrase recognized worldwide as a key to achieving high quality, productive manufacturing. Through JICA's projects, the Japanese philosophy of KAIZEN has been shared with 8 countries in Africa: Egypt, Tunisia, Ethiopia, Kenya, Zambia, Tanzania, Ghana and Cameroon. In these countries, JICA has worked with both the government and the private sector to nurture KAIZEN trainers and consultants. In Ethiopia and Zambia, even Institutes for KAIZEN were established to accelerate their efforts. In Ethiopia, 249 private companies have been trained in KAIZEN, and the productivity of their companies increased by an average of 37.2% within a period of 6 months according to the Ethiopia KAIZEN Institute.

Last year, I visited a shoe company in Ethiopia that started to implement KAIZEN methods. Whenever I tell this story, people are always surprised by how effective this method can be. The Peacock Shoe Factory that I visited was a mid-sized business of 300 workers. They used to produce 600 pairs of shoes a day. However, after introducing KAIZEN, without any additional investment or increase in staff, the daily production of shoes increased by 200 pairs in only 5 months. The most inspiring part was that this was not a one-off occurrence. The factory workers continued to build on these endeavors, and they were able to increase their productivity even further. By 2015, the same factory produced 1,500 pairs of shoes a day – this is 2.5 times what they used to produce 2 years ago in 2013. Through these endeavors, the Peacock Shoe Factory has also increased its exports overseas, and has delivered their products to consumers in European countries such as Italy.

While direct support for industrialization is needed, we must also not forget about the importance of other sectors, like agriculture and education. Without ensuring development in these sectors, we cannot hope for success in the industrial sector. That is why JICA also extends support to agriculture; we provide food sufficiency through the Coalition for African Rice Development, CARD, Initiative. In only ten years, the CARD initiative is aiming to double the amount of rice production in Africa from 14 million tons to 28 million tons. And we are proud to say it's truly happening. This increase in production is expected to accelerate the supply of affordable food domestically. The reduced cost for food will be especially beneficial to protect workers whose wages may stumble during the initial stages of industrialization. It is clear that we need a highly productive agroindustry to perpetuate industrialization and serve as a basis for sustainable development.

Additionally, Japan has supported the education sector over many years. Our areas of support include elementary education, vocational education, and we have also recently initiated support to the development of human resources in the business and industrial sectors. African Business Education, or ABE Initiative, is an initiative which provides opportunities for students from Africa to receive a Master's degree at Japanese universities. As part of this initiative, the students are provided with an internship at leading Japanese companies, which is mutually beneficial for both Africa and Japan. Through both JICA's agriculture and education initiatives, Japan has demonstrated its commitment to support industrialization in Africa from an array of sectors. I am convinced that these endeavors will increase Africa's industrial capacity and enhance its potential to successfully industrialize.

In light of these concepts, today's program starts with keynote speeches from our excellent co-hosts, followed by a thought-provoking panel discussion and questions from our audience. We will also be sharing some information about the latest findings from JICA and the Initiative for Policy Dialogue's joint research efforts. This will include details from phase 3 of our research, focusing on global industrial policies, and phase 4, on Africa's quality growth.

Most importantly, today we are here to learn from each other and get inspired about the future of industrialization in Africa. So, I would like to close my remarks by once again expressing my excitement for a lively, fruitful discussion. With that, I would like to hand over the stage to our distinguished speakers.

Thank you.

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