Reconsidering Business Challenges in Africa: A Frontier Where Opportunities and Risks Coexist

Overview and Challenges of African Business The 9th Tokyo International Conference on African Development (TICAD9) is scheduled to be held in Yokohama in August 2025, drawing attention to economic partnerships with Africa. While Africa's growing population and projected high economic growth rates increase its appeal as a consumer market, numerous challenges persist. Intensifying Inflation and Corruption Although some African countries are rich in mineral resources such as oil, natural gas, and metals, foreign exchange earnings have declined since resource prices fell in the 2010s, leading many African countries to fall into debt crises due to excessive borrowing. Government expenditures have increased due to responses to COVID-19 and Russia's invasion of Ukraine, while government revenues have not grown. The corruption rate has increased from 19% in 2019 to 27.5% in 2024. In 2024, 15 African countries experienced inflation rates exceeding 10%, and corruption has become a serious problem. Room for Business Environment Improvement Frequent price volatility and coups, along with the presence of international refugees and domestic displaced persons in some countries, create challenging conditions. Fraud is also a significant concern requiring attention. Many challenges exist, such as difficulty in securing appointments with local companies or facing long delays even when appointments are made. This comprehensive analysis report on African business by JETRO, dated August 12, 2025, provides a thorough examination of challenges and opportunities for Japanese companies entering African markets ahead of TICAD9.