‘Journal of Africa’ publishes ICA paper on infrastructure financing trends and the implications for Japan

6 April 2017

The Spring 2017 edition of the influential ‘Journal of Africa’, produced by the Africa Society of Japan, carries a paper “アフリカにおけるインフラ事業・資金調達トレンド：日本への示唆 "Infrastructure Financing Trends in Africa: Implications for Japan” written by the ICA Secretariat about infrastructure financing trends in Africa and the possible implications for Japan’s support for the continent’s infrastructure development.

Written by Dr Katsuya Kasai, Senior Infrastructure Liaison Officer of the ICA Secretariat, the paper draws on material from the ICA’s flagship annual report “Infrastructure Financing Trends in Africa - 2015” and the Japan International Cooperation Agency (JICA), and makes recommendations about future support from the Government of Japan for Africa’s infrastructure development.

After summarising infrastructure financing trends*, and highlighting that a large financing deficit remains between financing needs and current investment levels, the paper focusses on the importance of investing in quality infrastructure as the best way to ensure development is both sustainable and effective. The Government of Japan has been taking the initiative in this area by establishing the “Principles for Promoting Quality Infrastructure Investment” at the G7 Ise-Shima Summit in May 2016, and by committing (at TICAD VI in August 2016 in Kenya) $10bn in finance from both the public and private sectors for quality infrastructure in Africa.

The author concludes the paper by recommending that the Government of Japan should:

• Continue to fund high-quality projects which enable robust economic development in the medium and long-term, with appropriate life cycle costs (LCCs), while in turn contributing to enhancing the quality of Africa’s infrastructure;
• Implement technical cooperation projects or capacity development programmes on important aspects of quality infrastructure, e.g. LCCs, maintenance, procurement, safeguarding, Public-Private Partnerships (PPPs); and
• Promote technical cooperation projects which help African countries improve their business environment, in order for private firms to smoothly and confidently embark on PPP projects.

*The ‘Journal of Africa’ paper summarises the following as key infrastructure financing trends:

1. Total commitments to Africa infrastructure from all sources in 2015 was $83.4 billion;
2. 34.1% was committed by African governments (a reduction of 18% compared to the previous year, primarily due to low crude oil price;
3. 25.0% was committed by China, a sharp rise on 2014;
4. 23.8% was committed by ICA members, an increase of 5.4% on 2014;
5. 8.9% was committed by the private sector, predominantly in the energy sector;
6. Total commitments to infrastructure development in Africa have remained at roughly the same levels for the past six years; and
7. Therefore, this still leaves a significant financing deficit given Africa’s infrastructure needs.

Category: General News