Japan warns African countries on debt burden

TOKYO: The Japanese Foreign Affairs minister Taro Kono has urged African governments to watch their appetite for loans, advising that “sound debt management” is key for sustainable development of the continent by African themselves.

Mr Kono speaking Saturday at the opening of the Tokyo International Conference on African Development (TICAD) ministerial meeting in the Japanese capital, said international assistance should be provided in “accordance with international standards such as transparency, openness, and economic efficiency, in view of life-cycle costs as well as debt sustainability of recipient countries.”

“These principles are crucial components of Japan’s “Quality Infrastructure” initiative, based on which Japan is supporting enhanced connectivity throughout the entire African continent and beyond. In keeping with these ideas, Japan encourages African efforts toward economic transformation, as provided for in “Agenda 2063,” he added.

Several African countries including Uganda are mainly indebted to China, with the top recipients of Chinese loans/aid being Angola, Ethiopia, Sudan, Kenya, DR Congo, Congo-Brazaville, Nigeria, Ghana, Cameroon, and Equatorial Guinea.

Chinese President Xi Jinping at the just concluded seventh Forum on China-Africa Co-operation (FOCAC) summit held in Beijing offered to write off debts of some, especially poor African countries and further announced $60b (Shs224trillion) in new funding for Africa.

The Shs224trillion, Chinese state media reported, includes Shs56trillion ($15b) in grants, interest-free loans and concessional loans, Shs74trillion ($20b) of credit lines, Shs37trillion ($10b) for setting up of a special fund for development financing, and Shs18trillion ($5b) for a special fund for financing imports from Africa.

China has since overtaken the 22-member Paris Club (of mainly traditional creditors like US, UK, France, Germany, Denmark, and Italy) as the top source of lending and foreign direct investments for Africa. Some critics however argue that China is only entrapping Africa with its loans while fast exploiting its resources from minerals, oil and gas, to buying large tracts of land to grow food to feed its population back home.

Japan seeks share of Africa

TICAD, midwifed 25 years ago, is a forum for Japan— the world's third largest economy—to further cooperation with Africa.

At least 25 African Foreign Affairs ministers co-convened with the World Bank, African Union Commission, and United Nations. The meeting ends today.

Mr Kono reinforced the importance of free trade if Africa is to realise economic transformation, weighing-in on the increasing uncertainty surrounding the current international world order and widespread use of unilateral actions which he said is eroding multilateralism, particularly by the US President Donald Trump administration.

“Japan, however, remains determined to maintain and develop free and fair multilateral and plurilateral trading systems,” he added. “Our policies towards Africa have been shaped by our own experiences, which can be expressed in our belief that “the strength of a country lies in its people.”

Some analysts have warned that the ongoing tit-for-tat trade tariffs war between the United States and China could trigger some shockwaves for Africa, which is Beijing’s biggest trading partner. By end of last year, according to China’s ministry of Commerce, the China-Africa import-export trade had grown to Shs626trillion ($170b).

Mr Kono further commended African governments for taking a common stance against North Korea in line with the UN Security Council resolutions over its nuclear enrichments and missiles tests near shared waters with Japan.

“We hope to work continuously with Africa on these challenges to realize a better future for all,” he said.

The UN Under-Secretary-General and Special Adviser on Africa to the United Nations Secretary-General, Ms Bience Gawanas described TICAD strategies as aligned to the UN Sustainable Development Agenda (SDGs) and the African Union 2063 agenda which puts great focus on promoting private sector led role in Africa more than aid.