AfDB, Japan sign US$350m for Africa’s private sector

The African Development Bank (AfDB) and the Japan International Cooperation Agency (Jica) this week signed a US$350 million loan to finance the bank’s support for private sector operations in Africa.

The loan comes under the Enhanced Private Sector Assistance initiative, which is a component of Japan’s official development assistance to Africa.

Jica president Tanaka Akihiko said the loan represented a crucial step in Japan’s efforts to work with the AfDB to support Africa as it faces the challenge of navigating multiple compounded crises including issues of debt sustainability and the impact of the war in Ukraine.

AfDB president Akinwumi Adesina thanked the government of Japan as well as Jica, for their continued support to the bank and Africa.

He invited Jica to collaborate with the AfDB Group in other critical areas, such as refining the food and agriculture delivery compacts developed by African countries during a January food summit held in Senegal to tackle the continent’s food insecurity.

“Jica’s support would be crucial in the implementation of the Special Agro-processing Industrial Zones, which will be the biggest game changer of Africa’s agriculture. It will transform rural economies, reduce food loses, process and add value to crops produced in rural areas and create jobs,” Adesina said.

“Support young people to go into agriculture. Youths are Africa’s best asset, but they lack access to finance.

The bank is establishing youth entrepreneurship investment banks to provide young people with financial and technical support throughout the business cycle,” Adesina said.

Tanaka agreed with the areas highlighted by the AfDB chief, saying on the need to create jobs for young people: “It is silly not to take advantage of active youths in Africa. In Africa, you have an abundance of youths but in Japan, we have an abundance of an old population.”

Tanaka said it was important to explore ways of promoting interaction between Japan’s university students and those of Africa to foster exchanges of knowledge and skills.

Jica and the AfDB signed the first private sector assistance loan in 2007 and to date, the bank and the government of Japan have signed eight non-sovereign loans totalling US$1,85 billion.

The loans have so far contributed to support 51 projects, mainly credit lines and equity to regional development finance institutions, private equity funds and project finance for infrastructure public-private partnerships.

It contributed to the bank’s largest ever General Capital Increase in 2019. In December 2022 Japan provided US$534 million to the AfDB’s US$8,9 billion sixteenth replenishment.

– AfDB News