Solving Africa's development challenges will require a huge boost to capital investment. Some 454bn is needed to secure universal energy access by 2030, according to the African Development Bank AfDB. Achieving all the UN Sustainable Development Goals will require 4 trillion, the Bank believes. And the continent faces a 277bn annual bill for adapting to climate change.
The continent's ongoing hunt for the funds needed to tackle this litany of challenges has been made harder by US disengagement from the continent. As Africa looks for alternative sources of capital, there is certainly scope for it to make better use of its own financial resources, but there is also a need to find new overseas partners. And one country that is becoming more important for African financial institutions is Japan.
The Japan-Africa match is a potentially promising one. Africa needs billions of dollars of capital investment. Japanese financial institutions have some of the largest balance sheets in the world and have been looking for better way to invest their cash reserves to enhance returns.
Of course, consummating the partnership is far from straightforward, given differences in geography, language and culture. But there is no doubt that African institutions are ramping up efforts to entice Japanese capital. The AfDB, for example, has maintained an office in Tokyo since 2012, while a host of other multilateral development banks and private investment firms have been increasing efforts to engage with Japanese investors. TICAD 9 will provide another opportunity to strengthen ties and move the relationship forward.
Building relationshipsOne of the major players to make headway in the Japanese market is the Africa Finance Corporation. In recent years, the AFC has secured two "Samurai loan" facilities - a yen-denominated syndicated loan that allows non-Japanese entities to borrow from Japanese financial institutions. Most recently, in 2022, it raised 382m and 1bn 6m through a dual-currency lending facility.