Zim firms to benefit from Japanese support
Zimbabwean companies are expected to benefit from the US$350 million loan facility, which was recently extended to the African Development Bank (AfDB) by the Japan International Cooperation Agency (JICA) to support private sector operations in Africa.
The loan comes under the Enhanced Private Sector Assistance (EPSA) initiative, which is a component of Japan’s Official Development Assistance to Africa.
The fifth version of EPSA, for an amount of US$4 billion, was signed by the Bank and JICA at the Eighth Tokyo International Conference on African Development (TICAD 8), held in Tunis last August.
Several local companies have previously benefited from AfDB loans. In 2020, the bank approved a US$8 million loan facility for Olivine Industry for the construction of tomato source and margarine lines.
The signing ceremony for the private sector concessional loan took place at JICA’s headquarters in Tokyo, recently between JICA President, Dr Tanaka Akihiko and Dr Akinwumi Adesina, president of the AfDB.
Dr Tanaka said the loan represented a crucial step in Japan’s efforts to work with the African Development Bank 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.
“The private sector in Africa is fundamental in creating jobs for the prosperity and progress of Africa. Although the private sector has been confronting unprecedented economic and social pressures, we are confident that the Bank’s Non-sovereign Operations supported through this concessional loan will play an essential role in addressing these pressing issues,” said Dr Tanaka.
Dr 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 African Development Bank 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.”
“Support young people to go into agriculture. Youth 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,” Dr Adesina said.
JICA and the African Development Bank signed the first private sector assistance loan in 2007. To date, the AfDB and the government of Japan have signed eight non-sovereign loans totaling 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.
Japan’s support to Africa channeled via the African Development Bank Group through EPSA, consists of three main components: a robust co-financing facility under the Accelerated Co-financing Framework Agreement; the Fund for African Private Sector Assistance, that has been critical in supplying technical assistance and expertise to project sponsors across Africa in various sectors, and the Private Sector Investment Finance.
The government of Japan is one of the AfDB’s biggest supporters. It contributed to the bank’s largest ever General Capital Increase in 2019. In December 2022 Japan provided US$534 million to the African Development Fund’s UJS$8,9 billion sixteenth replenishment.-ebusinessweekly
