While many western investors still debate Africa’s prospects, Japanese financial services companies, corporations, and institutional investors are starting to make moves southward. Drawing on decades of patient capital deployment and their steadily built track record in emerging markets, Japanese institutions are forming partnerships with African governments, businesses and fund managers to establish what could become an important investment bridge. Our participation in TICAD 9 in Yokohama from 20-22 August 2025 provided inspiring insights and confirmed that Africa presents a good fit for Japanese capital looking to expand into new markets.    

The quiet revolution: Japan’s Africa awakening

In the boardrooms of Tokyo’s financial district, a quiet revolution might be happening. Major Japanese institutions – including large banks, insurance companies and leading logistics companies – are allocating new capital commitments to Africa. This story isn’t just about supporting emerging markets. Instead, it’s about a strategic alignment of African needs and opportunities and Japanese industrial and financial prowess, playing out on a continent that could well mirror Japan’s own economic development trajectory.  

 Japan’s foreign direct investment in Africa has grown steadily over the last decades, evolving from traditional commodity plays to more sophisticated financial services, technology, and infrastructure partnerships. As one senior executive at a major Japanese institutional investor explained during our meeting: “Africa isn’t just an investment destination for us – it mirrors our own transformation from post-war reconstruction to where we are today.” That mirror image runs deeper than economics. In both Japan and Africa, businesses are built on trusted relationships. Both countries realise that this requires a long-term mindset, a deep understanding of mutual values and the importance of patient capital, and establishing sustainable institutions rather than chasing quick returns.

The cultural advantage: Why Japanese capital works in Africa

Like investors worldwide, Japanese investors also seek the optimal balance between risk and return. However, they bring a fundamentally different approach to African markets, seeking long-term development opportunities based on their own development experience and successful offshore investments across Southeast Asia.

In Africa, where personal relationships and trust are paramount, the Japanese approach of multi-generational partnerships could create a strong competitive advantage. As the Japanese prime minister shared in his opening statement for TIDAC 9’s private sector program, it is not about extracting value quickly. ‘We are here to build something that will benefit our economies for the next 50 years,” he explained. 

 The Japanese concept of “ikigai”—finding purpose in long-term value creation—aligns with Africa’s development needs. Japanese investors are comfortable with longer investment cycles that allow African companies to scale profitably and sustainably. Decades of investing throughout Asian financial crises have given Japanese institutions deep understanding of the fragility of developing markets and how to apply a sophisticated risk management approach that suits African markets’ volatility. However, it’s fair to say that with this investment tenure, Japanese investors also expect top quartile market-rate financial returns.     

Japan’s impressive post-war practice of absorbing, adapting, and improving foreign technology could well provide a good playbook for African markets. It could prove especially successful when combined with Africa’s rich cultural diversity and a smart, sustainable approach to using the continent’s abundant natural resources, something Japan lacked when it was transforming itself into global economic force.

Financial services: Japan’s entry point in Africa

Japanese financial institutions are finding opportunities in Africa’s financial services sector, which accounted for 59% of total venture capital funding in 2024, totaling USD 1.4 billion across 116 deals (AVCA Venture Capital in Africa report, 2024). Japanese banks are exploring partnerships with digital African banks to bring their operational expertise to markets hungry for financial inclusion. Based on our experience in the financial inclusion sector, we can only underscore the vastness of this opportunity, with hundreds of millions of Africans still unbanked.     

At TICAD 9 we were also pleased to note that large Japanese insurance companies see Africa as the next frontier for micro insurance, SME financing, last-mile distribution and agricultural risk products. Some leading Japanese companies like SoftBank are investing heavily in African payment infrastructure, allowing them to leverage operational excellence and risk management capabilities while joint ventures and equal partnerships allow African partners to provide local market knowledge, regulatory relationships and access to end-user communities.  

Presence on the ground  

Many private-sector Japanese logistics and infrastructure businesses already have an established presence on the continent, often thanks to partnerships and focused on growing their core operational activities in new African geographies. But rather than approaching Africa as production center or commodity resource, Japanese investments are motivated by the ability to build integrated value chains that position Africa as both a market and a manufacturing or servicing hub for their clients on the continent and beyond. 

This is especially relevant for sectors where the Japanese have traditionally been strong, such as the automotive and mobility industries. Goodwell is proud to co-invest with Japanese investors in MAX – a leading Nigerian mobility provider that’s working to expand the adoption of electric motorbikes. Japanese investors are relaying their OEM presence and are showing a growing interest in EV infrastructure and battery technology, while doubling down on Africa’s energy transformation with new commitments to African wind and solar projects.

TICAD 9 also demonstrated deepening cooperation between governments, which will provide the foundation for stronger private-sector partnerships. Running since 1993, TIDAC itself (the Tokyo International Conference on African Development) has played a crucial role in establishing unique institutional relationships between Japan and African governments. While primarily a diplomatic foundation, it increasingly provides Japanese investors and companies and their African counterparts an excellent opportunity to share learnings, ambitions and business opportunities during its exhibition and conference.

It no doubt makes sense for Japanese investors want to expand their (financial) involvement in Africa, given the demographic dividend, increasing urbanisation, and technology leapfrogging that is occurring there. The TICAD exhibition clearly confirmed the established involvement of infrastructure and logistics players, while providing insight into sectors seeking their first connections with prospective clients or partners in Africa, particularly in the areas of climate technology, healthcare innovation, financial infrastructure and agritech.   

This also implies an active involvement in running the business, and therefore representation in portfolio companies and Japanese boots on the ground. This type of cooperation reduces the perception of risk and operational complexity, while creating trusting, long-term relationship that are at the core of any partnership with a Japanese company.   

Strategic alliance model

Japanese investors are taking a sophisticated approach to African venture capital by forming deep partnerships with local fund managers rather than trying to build proprietary operations from scratch. Japanese institutions are creating co-investment platforms that combine Japanese capital with African market expertise and aim to solidify the partnership through a significant GP stake and operational fund support. As one senior Japanese institutional investor explains: “We don’t want to be foreign investors in Africa. We want to be African investors with Japanese backing.” Again, mutual understanding, patience, and trust are key to such partnerships.  

In summary, we found that Japanese investment rationale is supported by compelling fundamentals that resonate with their investment criteria and are strongly grounded in the conviction that sustainable progress and value can only be achieved through long-standing cooperation and partnerships based on having skin in the game. We’re looking forward to seeing how this mindset can translate into inclusive gains for Japanese investors and businesses, and their African partners. 

If you would like to know more about what we do and the other insights we gained in Japan, please get in touch by email (contact@goodwell.nl) or leave a comment on our LinkedIn page.