Japan, African Development Bank to Co-Finance $5 Billion Investment into Africa

L-R: Japan’s Vice-Minister of Finance for International Affairs, Masato Kanda; African Development Bank President, Akinwumi Adesina; Japan International Cooperation Agency President, Akihiko TANAKA.

The fifth phase of the Enhanced Private Sector Assistance for Africa initiative (EPSA 5), which will commence next year and run until 2025, will be able to provide support of up to $5-billion to the continent’s private sector. EPSA is a partnership between the Government of Japan and the African Development Bank (AfDB).

The EPSA initiative was originally announced in 2005, and EPSA 1 started in 2007, being succeeded by EPSA 2 in 2012, followed by EPSA  3 in 2017 and then EPSA 4 in 2020. EPSA 4, which concludes this year, was assigned funding of $3.5-billion.

The announcement of this latest tranche in the EPSA initiative was made at the eighth Tokyo International Conference on African Development, in Tunisia. The $5-billion is subdivided into $4-billion being provided under the current ‘window’, plus up to $1-billion more being allocated under a new ‘special window’.

The special window is being created by Japan to support those countries which are increasing their debt transparency and sustainability, among other reforms, which will steadily and significantly improve their debt situations.

Further, EPSA 5 adds a new, fourth, priority area for financial support: agriculture and nutrition. This is because of the importance of food security. (The three already existing priority areas are electricity, connectivity and health.)

“Under the severe situation caused by multiple crises, enhancing resilience and promoting human security are critical components of Japan’s support for Africa,” affirmed Japan International Cooperation Agency (JICA) president Dr Akihiko Tanaka.

“EPSA is an essential element of our partnership with the African Development Bank to tackle social and economic challenges facing the continent. JICA commits to work with EPSA to create a bright and prosperous future.”

“EPSA 5 is the kind of cooperation Africa and the world needs,” highlighted AfDB president Dr Akinwumi Adesina. “Escalating climate change impacts, the Covid-19 pandemic, and the war in Ukraine mean that we must do even more than we already have done, to mobilise the private sector and create job opportunities in Africa. The newly signed initiative will positively impact millions of lives across Africa.”

August 30, 2022