Japan avails $600m loan for African support
A LOAN worth over US$600 million to execute concessional financing and grants for African countries has been signed by Japan International Cooperation Agency ( JICA) and the African Development Fund (ADF).
The financing targets countries facing economic challenges caused by Covid-19.
ADF is the concessional arm of the African Development Bank Group (AfDB).
The concessional donor loan will support the 15th replenishment of the ADF, approved in December 2019 by ADF donor countries.
As of February 2021, Japan’s total contribution to the initiative amounted to US$4.6 billion.
JICA president, Kitaoka Shinichi, said the Covid-19 crisis had accelerated global structural changes.
Mr Shinichi observed that Africa was still in the midst of this crisis, facing serious challenges from coronavirus variants and the cold storage requirements for vaccines.
“Only a united Africa can defeat this threat to humanity. We should not allow this virus to jeopardize the steady progress of freedoms, independence and democracy that African countries have made so far.
“I firmly believe that today’s contribution to ADF-15 will further boost our cooperation with African countries and strengthen our partnership with the AfDB group,” he said during a virtual signing ceremony.
Japanese Ambassador to Côte d’Ivoire, Kuramitsu Hideaki, whose country has been the fifth-largest contributor to the ADF in cumulative terms, said the loan formed part of Japan’s commitment to promote industrial human resource development.
Ambassador Hideaki said the loan was also part of the innovation, investment, and to invest in quality infrastructure to enhance connectivity, expressed at the TICAD 7 conference in August 2019.
“I sincerely hope that this loan in yen will allow the (African Development Fund) to execute concessional financing and grants for African countries facing emerging challenges caused by Covid-19 and contribute to the economic and social development of these countries,” he said.
ADF, Deputy Director-General, Mimura Atsushi, said the Fund was a key source of financing for Africa’s low-income countries heavily affected by Covid-19.
“The Yen Loan we are providing today has a higher grant-element compared to the Yen Loan provided for the last ADF replenishment, with a lower interest rate and longer maturity.
“Going forward, I would like to see our partnership further developed with the African Development Bank Group,” he said.
AfDB president, Akinwumi Adesina, highlighted the AfDB’s long-standing partnership with the Government of Japan, including the Enhanced Private Sector Assistance Initiative, which was launched in 2005.
Dr Adesina pointed out that Japan’s concessional donor loan was almost 10% of the total ADF-15 resources of US$7.5 billion.
“This is a continuation of the strong leadership role of Japan in providing concessional loans to the African Development Fund. Japan continues to add great value to the overall replenishment cycles of the African Development Fund,” he said.