Japan will enhance its trade insurance offering to stimulate private sector investments in Africa, according to Prime Minister Shinzo Abe.
The move raises Japan’s competition with regional rival China, with both nations seeking to increase their presence and influence in resource-rich Africa.
“The Japanese government will do its utmost so that our private-sector investment in Africa, which came to US$20 billion over the past three years, will be expanded continuously,” Abe was quoted as saying by Reuters. He spoke at the Tokyo International Conference on African Development (TICAD), which was attended by several African leaders and delegates from the World Bank and other international organizations.
With the enhanced trade insurance coverage, it will now fully cover Japanese loans to African governments, affiliated institutions, or private sector entities importing Japanese goods for African infrastructure projects, according to government briefing materials and a state-run trade insurer.
However, Abe did not make any major funding announcements in the meeting that took place in Tokyo from August 28-30.
During the previous conference in 2016, Tokyo pledged US$30 billion in funding from the public and private sector, to assist infrastructure development, education, and healthcare efforts in Africa over the next three years.
Sub-Saharan Africa is one of the world’s new development frontiers, with foreign investment growing 13% to US$32 billion in 2018, going against a global downward trend and reversing two straight years of decline, according to data from the UN.
Observers have noted that Japan’s move seeks to counteract growing Chinese influence on the African continent. In September, Chinese President Xi Jinping pledged around US$60 billion in investments for Africa, as well as writing off the debt of several poorer nations. The latter seems to be in response to critics’ allegations that Beijing is seeking to ensnare smaller developing economies in a “debt trap”.
