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Thursday, June 20, 2024

Japan lifts African Development Fund with $700m

The Japan International Cooperation Agency (JICA) has signed a loan agreement with the African Development Fund (ADF) designed to provide an Official Development Assistance (ODA) loan to the tune of  ¥73.601 billion (approx. $700.9 million). The loan is part of Japan’s contribution to the African Development Fund’s Fourteenth Replenishment (ADF-14). This is the first JICA loan provided to the ADF, a part of the African Development Bank (AfDB) Group.

Japan’s Ambassador to Côte d’Ivoire, Hiroshi Kawamura (left), with President of the African Development Bank (AfDB) Group, Akinwumi Adesina, during the signing of the loan agreement in Abidjan, Côte d’Ivoire

The loan will provide the ADF with resources to support recipient countries during the ADF-14 period (January 1, 2017 to December 31, 2019), and contribute to economic growth as well as poverty alleviation in Africa’s least developed countries.

President of the AfDB Group, Akinwumi Adesina, acknowledged the landmark event and expressed the bank’s gratitude and appreciation to the Government of Japan.

Signing the Notes of Exchange, Adesina said, “Thanks to Japan and its Government for keeping a promise. One often hears about many international pledges of development cooperation remaining unfilled. I would like to commend the full accomplishment of Japan’s commitments to Africa’s development. With its $700-million loan, which came on top of $328 million in the form of a grant, Japan has significantly contributed to the ADF commitment capacity for the period 2017-2019.”

Adesina stated that Japan was a longstanding development partner for Africa, with a significant portion of its aid commitments to the continent channeled through the AfDB. “Japan is the second-largest contributor to the ADF in cumulative terms, and it has increased its contributions significantly over time.”

Also speaking on the occasion, Japan’s Ambassador to Côte d’Ivoire, Hiroshi Kawamura, said he was glad to sign the accord to bolster Africa’s socio-economic development. “Our contributions to the ADF-14 replenishment will allow the Government of Japan to increase its contributions to 7.3%, against 6.7% for the ADF-13,” he stated.

Kawamura added: “We hope the loans and grants will be used effectively to improve economic and social conditions of less privileged people in Africa. Also, the reason of our meeting today would further contribute to accelerating the Tokyo International Conference on African Development (TICAD).”

The Japan International Cooperation Agency (JICA) Chief Representative in Côte d’Ivoire, Tsutomu Iimura, said his institution fully adheres to the AfDB’s High 5s. “There is no limit in the potential collaboration and synergies between the two institutions.” Iimura expressed the hope that JICA’s projects and contributions to ADF-14 would bolster the bank’s capacity to carry out the objectives of the High 5s in countries where support is most needed.

Co-signing the accord for the AfDB, Acting Vice-President for Finance, Hassatou N’Sele, thanked the Japanese Government and its people for “exceptional support” to the ADF-14 replenishment, noting that, “These investments by Japan will make a difference in the lives of many Africans. Japan is one of the African Development Bank’s most privileged partners. Your various financial instruments will help us meet our development goals”.

The African Development Fund is part of the AfDB Group and provides support primarily to least developed and poor countries in the form of very long-term, low-interest financing. In contrast, the AfDB, which is the other arm of the AfDB Group, provides financing to middle-income countries in Africa.

Since its inception in 1972, the ADF has conventionally received subscriptions in the form of grants from donor countries, including Japan, as a source of funding to achieve its development mandate. During the negotiations of its fourteenth replenishment, the ADF offered donor countries the opportunity to include concessional loans within subscriptions to the Fund for the very first time.

JICA also provides private sector development support through projects under Enhanced Private Sector Assistance for Africa (EPSA), which the Government of Japan and the AfDB launched as a strategy for support in Africa in July 2005. It is JICA’s policy to maintain its relationship with the AfDB Group as an important development partner contributing to economic growth and poverty alleviation in Africa.

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