The African Development Bank (AfDB) and the Japan International Cooperation Agency (JICA) have signed a JPY 44,100,000,000 (350 million dollars) loan agreement to pay for the Bank’s support of African private sector operations.
According to a statement issued by the bank on Thursday in Abuja, the loan is under the Enhanced Private Sector Assistance (EPSA) initiative, a component of Japan’s Official Development Assistance to Africa.
The Fifth Version of the Four Billion Dollar EPSA was signed in August 2022 in Tunis, Tunisia, at the Eighth Tokyo International Conference on African Development (TICAD 8).
JICA President Dr. Tanaka Akihiko and AfDB President Dr. Akinwumi Adesina signed the private sector concessional loan agreement at the JICA offices in Tokyo. According to NAN, Adesina is in Japan to speak with senior government officials, important Japanese firms, development partners, legislators, and the African diplomatic community on business opportunities in Africa.
According to the JICA president, the loan marked a significant turning point in Japan’s attempts to work with the AfDB to promote Africa.
According to Tanaka, Africa must address a variety of interconnected issues, including the sustainability of its debt and the consequences of the conflict in Ukraine.
He asserted that the private sector is crucial for job development in order for Africa to prosper and advance. We are optimistic that the Bank’s Non-sovereign Operations, funded by this concessional loan, will be essential in addressing these pressing issues despite the significant economic and social obstacles the private sector has faced.
The JICA president said, “It is silly not to take advantage of active youth in Africa,” referring to the need to provide jobs for young people.
In contrast to Africa, which has a large youth population, Japan has a large elderly population.
In order to foster the interchange of information and talent, according to Tanaka, it is crucial to look into ways to improve communication between university students from Africa and Japan.
He agreed that JICA and AfDB should keep talking so they may explore some of the issues the AfDB president mentioned.
In addition to digitizing primary healthcare operations, he claimed that this involved founding the African Pharmaceutical Technology Foundation in Kigali, the nation of Rwanda’s capital.
The AfDB president praised JICA and the Japanese government for continuing to assist the Bank and Africa.
Adesina urged JICA to collaborate with AfDB in other key areas, like enhancing the food and farm delivery compacts created by African countries, during a food summit held in January in Senegal to alleviate the continent’s food insecurity.
The Special Agro-processing Industrial Zones will revolutionize African agriculture, and JICA’s assistance will be crucial to their implementation. According to Adesina, it will alter rural economies, reduce food losses, process and add value to the local crops, and create jobs.
The head of the AfDB urged JICA to help young people who wish to work in agriculture since, despite being Africa’s greatest resource, young people lack access to funding.
He states that “The Bank is establishing youth entrepreneurship investment banks to provide young people with financial and technical support throughout the business cycle.”
JICA and AfDB agreed on the first loan for financing the private sector in 2007.
Eight non-sovereign loans totaling $1.85 billion have already been negotiated between the Bank and the Japanese government.
The loans have so far been used for 51 projects, the majority of which entailed project financing for infrastructure P3s, private equity funds, credit lines, and equity to RDF providers.
The main channels through which Japan gives aid to Africa are the AfDB and EPSA.
The Japanese government is one of the Bank’s biggest supporters.
It supported the bank’s largest-ever general capital increase in 2019.
In December 2022, Japan contributed 534 million dollars to the fund’s 16.9 billion replenishment.