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Unlocking Investment Potential in Africa: JICA’s approach
Joint DAC-IC Session 1.2OECD Global Forum on International Investment
Toru HommaAdvisor, Industrial Development Department /
Trade & Investment Advisor, Regional Strategy Unit for Africa
Japan International Cooperation Agency (JICA)
OECD, Paris, 7/12/2009
An Overview of JICA‟s approach for
(1) investment, (2) Africa
Contribution to “Investment for Development”
and “NEPAD-OECD Initiative”
Case studies on leveraging ODA to improve
investment climate / using the OECD PFI
Contents
3
The integration will enable New JICA to be more strategic, effective and responsive in implementing ODA.
Birth of New JICA in October 2008
Bilateral
ODA
ODA
Multilateral
ODA
Grant Aid*
Technical Cooperation
ODA Loans
Contribution to
International Agencies
MOFA
JICA
JBIC (ODA)
*Excluding those to remain under the auspices of MOFA for diplomatic reasons.
MOFA
New
JICA
Synergy & Impact
Greater effectiveness, efficiency and impact
with 3S (Speed Up, Scale up and Spread Out)
[US$ million]
1,016
11,1169,942
1,118
1,5961,486
7,440 8,402
Total
FY2008 FY2009
JICA‟s approach to trade and
investment promotionBusiness environment improvement for trade and investment
• Policy and regulation reform
• Intellectual property rights, standardisation and accreditation
• Infrastructure: economic infrastructure (transport and energy), customs system, multi-facility economic zone
Capacity development for trade promotion
• Capacity development of trade promotion agency
• Strengthening private sector’s competitiveness
• Capacity development on international rules (WTO/FTA/EPA)
Capacity development for investment promotion
• Capacity development of investment promotion agency
• Investment promotion information service and networking
•Private sector-led economic growth
•Response to Monterrey Consensus to achieve MDGs
Business environment improvement
Software: investment/trade policy & regulation reform, customs reform etc.
Hardware: supporting infrastructure (port, railway, industrial park etc.) by ODA
Industrial human resource development
PPP infrastructure
Infrastructure development and management (example - power: planning & distribution by ODA / IPP by Private etc.)
ODA funded port/water facility management
New Frontier CSR: community support, BHNs etc.
BOP business support: survey, Microfinance
Scale up of ODA project by private sector
JICA‟s approach: assisting private
sector to promote investment
Experience on practical linkages between ODA and private
investment in Asia, which led Asian economic growth and
poverty reduction --- to be shared in Africa
JICA Network: Offices in Africa
South Africa
Ethiopia
Botswana
Madagascar
Mozambique
Tanzania
Zimbabwe
Zambia Malawi
Kenya
Namibia
Djibouti
Uganda
RwandaGabon
Cameroon
Nigeria
Niger
Benin
Ghana
Côte d’Ivoire
Senegal
Burkina Faso
Sierra Leone
DRC
Sudan (Khartoum)
Sudan (Juba)Liberia
Burundi
Egypt
TunisiaMorocco
Total: 30 offices
1. Boosting Economic Growth
a. Development of regional infrastructure (transport, power)
Expansion of One Stop Border Post (OSBP)
b. Enhance capacity to increase food production and agricultural productivity (especially rice) through the promotion of CARD initiative
c. Trade, investment and tourism promotion / infrastructure development for PPP, human resource development
2. Ensuring Human Security
a. Assistance to achieve MDGs (school construction, infectious disease control, water supply)
b. Development assistance that contribute to regional stability and peace consolidation
3. Environment / Climate Change
Contribute to „Cool Earth Partnership‟ through effective project formulation and implementation
TICAD IV (May 2008)
Internationally agreed principles of cooperation to
Africa reflected in the Yokohama Declaration
Japan‟s commitment
ODA by Modality Average Annual Level
(2003-2007)
Targeted Amount in
2012 (Cumulative)
Grants (Bilateral) USD 0.7 billion USD 1.4 billion
ODA loan (Net) USD 80 million Over USD 160 million
Disbursement to AfDB USD 120 million USD 240 million
Total ODA to Africa USD 0.9 billion USD 1.8 billion
“Doubling total ODA to Africa by 2012”
0
0.5
1.0
1.5
2.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Disbursement to AfDBYen Loan (Net)Technical CooperationGrants
(billion USD)
Average
(2003-2007)
T/C & Grants
2012
Average
(2003-2007)
Yen Loan
West-Central Africa
Eastern Africa
Southern Africa
Loans Grant T/A
KENYA
Sondu-Miriu Hydropower Project II (On-going)
*L/A signed ’07,Jan
Olkaria IV Geothermal Power Plant Construction Project
(Candidate Project)
UGANDA
Bujagali Interconnection Project(ACFA) (On-going)
*L/A signed ’07,Oct
Construction of Ayago Hydropower Plant Project
(Candidate Project)
Rural Electrification Project Phase II (On-going)
SIERRA LEONE
Project for Urgent Improvement of Electric Power Supply
System in Freetown (On-going)
Project for the Rural Electrification in Cross River and Akwa
Iborn States (I-III) (On-going)
ZAMBIA
Increasing Access to Electricity Services Project （Co-financing
with WB）(On-going)
Electrification Development Master Plan (On-going)
GHANA
Rural Electrification (V) (On-going)
Human Resources Development Project for Disseminating PV
Systems (On-going)
Project of Reinforcement of Transmission and distribution
Facilitation in Oysterbay Station (On-going)
Technical Support Project for the Stable Power Supply
System (On-going)
Malawi
The Rural Electrification Promotion Project (MAREP Phase IV)
(On-going)
CAPE VERDE
Power Supply, Transmission and Distribution Lines Project in
Santiago Island（ACFA）(On-going) *L/A signed ’08,Mar
NIGERIGA
West Africa
Power Pool
Central Africa
Power Pool
Southern Africa
Power Pool
Eastern Africa
Power Pool
TANZANIA
*Only on-going/candidate projects are shown in this sheet
Regional Infrastructure Assistance case:
Japan’s Assistance for Energy Sector in Africa
SENEGAL
OMVG Power Generation &Transmission(Candidate Project)
MOZAMBIQUE
Mozambique-Malawi Transmission Line Project （Co-financing
with WB）(Candidate Project)
North-South Backbone Transmission Line Project（Co-financing
with WB）(Candidate Project)
Reinforcement for Iringa-Shinyanga 330 kV Transmission
Line Project （Co-financing with WB）(Candidate Project)
Thermal Power Development Project（Co-financing with
WB）(Candidate Project)
10
: Paved Road
: Missing Link
: On-going project: On-going project
(Japan’s Assistance): Candidate projects
(Japan’s Assistance）
Burundi
Mali
Sudan
Kenya
Guinea Burkina Faso
Ghana
Rep.
Congo
LiberiaCote
D’Ivoire
Tanzania
Sierra Leone
D.R.
Congo
Angola
Namibia
South Africa
BotswanaMozambique
Mauritius
Zambia
Nigeria
Niger
Ethiopia
Eritrea
DjiboutiGambia
Madagascar
EgyptLibya
Tunisia
Morocco
Algeria
Mauritania
Chad
Central
African R.
Gabon
Cameroon
Malawi
Rwanda
Lesotho
Swaziland
Somalia
TogoBenin
Western
Sahara
●OSBP (Chirundu)
GuineaBissau
Uganda
TAH: Trans African Highway
OSBP: One Stop Border Post
N’DJAMENA
WINDHOEK
WALVIS BAY
BEIRA
HARARE
NAKARA
DURBAN
LUSAKA
MOMBASA
LAGOS
Senegal
CAIROAGADIR
TAKORADI
LOBITO
JOHANNESBURG
LUANDA
NAMIBE
ADDIS ABABA
KHARTOUM
DAKAR
Map is edited based on NEPAD STAP and TAH
●OSBP (Namanga)
DAR ES SARAAM
Zimbabwe
MTWARA
Regional Infrastructure (transport)
11
JICA’s assistance to OSBP projects
KHARTOUM
Burundi
Mali
Sudan
Kenya
Guinea Burkina Faso
Ghana
Rep.
Congo
LiberiaCote D’Ivoire
Tanzania
Sierra Leone
D.R.
Congo
Angola
Namibia
South Africa
BotswanaMozambique
Mauritius
Zambia
Nigeria
Niger
Ethiopia
Eritrea
DjiboutiGambia
Madagascar
Zimbabwe
EgyptLibya
Tunisia
Morocco
Algeria
Mauritania
Chad
Central
African R.
Gabon
Cameroon
Malawi
Rwanda
Lesotho
Swaziland
Somalia
Togo
Benin
Western
Sahara
●Chirundu
Guinea
Bissau
Uganda
N’DJAMENA
WINDHOEK
WALVIS BAY
BEIRA
HARARE
NACALA
DURBAN
LUSAKA
MOMBASA
DAR ES SALAAM
LAGOS
Senegal
CAIROAGADIR
TAKORADI
LOBITO
MTWARA
JOHANNESBURG
LUANDA
NAMIBE
ADDIS ABABA
DAKAR
●Namanga
-Rusumo
●Mfun
●Malaba
-Kazungula
◇ On-going projects ◇
3
87
14
111 9
102
51718
12
1315
16
4
6
Construction and Technical support
Construction
Technical support
Technical support before TICAD IV
-Taveta
-Lungalunga/Horohoro
-Busia
-Isebania/Sirai
-Nemba-Kanyaru
-Mutukula
-Gatuna/Katuna
-Kobero
-Tunduma/Nakonde■Oshikango
■Wanela/Sesheke
●: On-going－: Candidate■: Completed
<Technical cooperation>
@Malaba, Namanga
“The Project on Capacity Building for the Customs Administrations of the Eastern African Region”
-Capacity building for Custom Administration
-Staff training
<Project Formulation>
@Chirundu
-Development of Legal Framework
-Border Staff training (overview of OSBP)
<Construction of Facility>
@Mfun
- Study, design and construction of OSBP with ODA loan/AfDB
Cross border Infrastructure assistance
Japan‟s contribution to
“Investment for Development Initiative” and
“NEPAD-OECD Africa Investment Initiative”
Contributed to the Taskforce Meetings which developed the PFI as the Co-Chair
Proposed the project to strengthen the NEPAD-OECD Africa Investment Initiative at the OECD Ministerial Meeting
Supporting the NEPAD-OECD Initiative, together with Belgium, Finland and the “Friends of the Initiative” donors, as the Vice Chair of the Steering Group
TICAD IV supports “promoting African efforts in investment policy reform using multilaterally-endorsed instruments such as the OECD PFI” and “Strengthen economic governance through the NEPAD-OECD Africa Investment Initiative.”
JICA‟s contribution to
“Investment for Development Initiative” and
“NEPAD-OECD Africa Investment Initiative”
Promoting usage of the PFI in its implementation of the ODA programmes
Assisting the implementation of the NEPAD-OECD Africa Investment Initiative utilising JICA‟s African country office network
Held back-to-back events at the Initiative‟s 2007 Lusaka and 2005 Entebbe Roundtables
Participated in the past roundtables as the speakers (including the latest Johannesburg meeting on energy infrastructure)
Experience and possible usages of PFI in
JICA as a bilateral development partner
The PFI as a tool for…
reviewing on current situation surrounding
investment support projects
assisting related ministry/agency‟s capacity building
benchmarking to evaluate progress of investment
support projects
identifying policy area to be highly supported … etc.
Being promoted inside JICA (video conference
seminar, mission, thematic issue guideline etc.)
Case 1: Utilising the PFI - Cambodia Investment Promotion Project
Project: The Study on Institutional Strengthening of Investment Promotion in Cambodia (2009-2010)
Cambodian Investment Board (CIB) of the Council for the Development of Cambodia (CDC)
Scope of Work: Current situation review, Comparative study with neighbouring countries, Investors analysis, Comparative advantage identification, Pilot projects, Recommendations, Seminar
Agreed to make the maximum use of PFI for overall analysis on investment promotion
Positioned PFI as an important analytical tool
Held preliminary discussions on PFI with OECD Investment Division in Paris
Case 1: Utilising the PFI - Cambodia Investment Promotion Project
Based on the 9 questions in the PFI Chapter 2 and 40 sub-questions set in the PFI User‟s Toolkit
Designed “Questionnaire for Directors, Managers and Staff of CIB (Awareness Survey)” based on PFI
“Became very persuasive questionnaires and convincing analysis by using internationally-recognised PFI”
Overall review is being prepared through a series of discussions as a part of the capacity building process
Case 2: Zambia Investment Promotion Project - Triangle of Hope
South-south (Asia-Africa) cooperation using Malaysian and other Asian experience and expertise on investment promotion, coordinated by Presidential Office
Objectives: Improvement of business climate conducive for investment (laws and regulations) and capacity development of the Government (in cooperation with private sector) in investment promotion. (Phase I:2006-2009, Phase II:2009-2012)
Promote knowledge-based/service sector, such as Education, Health and ICT as industry in order to reduce disadvantage of landlocked country (high transportation cost). Due to the reform of laws and regulation, the amount of investment into those sectors has been increased.
Through OJT on investment promotion, officials have been changing their mind towards client-oriented attitude.
Civil
Service
Private
Sector
Political Will
HOPE
Case 2: Zambia Investment Promotion Project - Triangle of Hope
Successes including Africa‟s almost first mobile phone factory (established March 2009) to which the Project contributed on its joint venture facilitation with Malaysian resources
Based on the recommendation by the Zambia-Japan joint evaluation team, Phase 2 considers to utilise the PFI as a benchmarking tool
Zambia Investment Seminar was held by the Project in cooperation with the NEPAD-OECD Initiative as its Lusaka Roundtable‟s back-to-back event (Nov 2007)
Active donor coordination
Private Companies
Government of Uganda
(Borrower)
Uganda Electricity Company
(Executing Agency)
Commercial Lenders
DFIs (IFC, AfDB, etc)
Bujagali Interconnection Project Bujagali Hydropower Project
SPC
IDA
MIGA
Shareholders’
Financing
Loans
Guarantee
Guarantee
Loan
(EPSA/ACFA)
Public Private
JBIC/AfDB
PPP
Loan (EPSA/NSL)
Case 3: PPP – Uganda Bujagali Energy
Commit JICA ODA loans up to
1 billion USD over the next 5 years
since 2005
Enhanced Private Sector Assistance for Africa (EPSA)
Concrete Commitment
EPSA
Enhanced Private Sector Assistance for Africa
JICA
ACFAAccelerated Co-financing
Scheme for Africa
AfDB/AfDF
Annual consultation on
Project Finding / Implementation
ODA Loans
Commission to
formulate, supervise etc.
Provide Loans and
supervise projects
Sovereign Guaranteed Projects
NSLNon-Sovereign Loan
JICA
AfDB
ODA Loans
Non-sovereign
Private Sector Projects
Provide Loans and
supervise projects
<Focus areas>
- Creating an Enabling Business Environment
- Strengthening Financial Systems
- Building Competitive Infrastructure
- Development of Micro-SMEs
- Promoting Trade and FDI
FAPAFund for Private Sector
Assistance
GoJ
FAPA(Secretariat within AfDB)
Technical Assistance
Lessons and Conclusions
Bilateral ODA‟s significant role to mobilise private investment in support of economic growth : Aid for investment
Nexus of infrastructure, investment and development assistance
Partnership among the Government, the private sector and the development partners
Usefulness of the PFI and the NEPAD-OECD Africa Investment Initiative for donor agencies: effective tools for implementing bilateral ODA and possible collaborations with the OECD
22
JICA‟s VISION
“Inclusive and Dynamic Development”
Thank you
Merci
