.jpg)
The Japanese government is planning a trade insurance scheme to cover infrastructure-related exports and loans to African economies, as it looks to match the massive inroads achieved by China.
The insurance will be coursed through a partnership between the state-owned Nippon Export and Investment Insurance (NEXI); Kenya-based African Trade Insurance Agency; and the Saudi Arabia-based Islamic Development Bank, Nikkei reported.
Japan’s minister of economy, trade and industry, Hiroshige Seko, is expected to make the official announcement as soon as May 09.
The move looks to encourage Japanese firms to invest in Africa, which is considered the last frontier of global economic development, the report said. Additionally, Tokyo does not want Japanese companies to be left behind in the projected rapid growth in the region, especially with Beijing pouring massive investments into the continent through its Belt and Road Initiative.
In a scenario where an African government imports heavy equipment from Japan using a loan from a Japanese bank, NEXI will provide cover for 85% of the amount, with the other two agencies covering the rest. Meanwhile, NEXI will insure 90% of construction projects’ funding, with the other two partners sharing the remaining 10%.
To catch up with China’s advanced presence in the region, Japan will step up its cooperation with the African Trade Insurance Agency, which is funded by the African Development Bank, as well as various African governments. The Islamic Development Bank is backed by Saudi Arabia, Iran, and the United Arab Emirates, and is an expert in African affairs.
